Social security for unorganised sector

The National Commission for Enterprises in the Unorganised Sector (NCEUS) has suggested setting up a social security fund for workers in the unorganised sector.

The commission has already submitted the report to Prime Minister Manmohan Singh. The commission is also planning to suggest a provision for unemployment insurance.

NCEUS was set up two years ago under the chairmanship of economist and member of Parliament, Arjun Sengupta.

Member-secretary of NCEUS, V K Malhotra said that the social security fund would be utilised for creating provident fund, old age pension, health insurance for the unorganised sector work force.

He was in Kolkata recently to participate on a meeting on access to finance to unorganised enterprises, organised by Small Industries Service Institute (SISI).

"We have suggested that the respective state governments, workers and the central government should contribute to this fund. Later, employers will be asked to join," he said.

Malhotra pointed out that to begin with it is difficult to involve employers in the fund because in unorganised sectors like household servants, drivers or shop employees, it is difficult to identify the employer.

"We have so far identified only 17 per cent of them. It is also difficult to convince them to contribute to the fund," he said.

Malhotra said that the commission has made it clear that to enhance productivity in the unorganised sector, the social security net has to be strengthened.

Besides, workers in the unorganised sector, the commission is preparing a report on credit access for the micro and tiny enterprises in the country. There are 1.15 crore such enterprises in the sector.

"A majority of bank loans directed at the SME sector is going to SMEs with a turnover of more than Rs 5 crore. The tiny and micro enterprises in the Rs 20-25 lakh turnover category hardly get any funding. We are preparing a status report on this which will be submitted to the government by September 2007," he said.

The commission is currently discussing the issue with stake holders like the Reserve Bank of India, the Union finance and labour ministries, SME organisations, state governments and NGOs.