A task force on social security set up in 1997, has said that an unemployment insurance scheme should be the most important component of social security. It also suggests that the existing schemes on social security be merged and framed as a statutory law, called the Social Security Act.
The task force submitted its report to labour minister Satyanarayan Jatia, on Monday. It was chaired by S K Wadhawan.
The report says that current schemes run by different social security institutions targeting the same group of employees had created avoidable duplication. All the system has succeeded in creating is vast paperwork.
If there was an integrated scheme of social security, there would have been saving both for institutions and employers.
It says a separate department for social security should be created in the labour ministry to extend social protection to all sections of the working population.
The report makes concrete proposals for various social security schemes run by both the central and the state government and suggests ways of integration. On Employee State Insurance Corporation (ESIC), the report admits that ESI schemes have failed miserably in providing medical assistance to the needy. Therefore, the administration of medical care should be restructured. Specifically, state government which run ESI institutions have no time, money or manpower to run ESI dispensaries and hospitals. So these should be given over to the ESI corporation which should be responsible for running them.
On Employees' Provident Fund (EPF), the report recommends more intensive coverage. It suggests that the facility for sundry withdrawals from EPF reduces the scheme to the status of a savings fund account. Instead of this, one third of the accumulated sum should be permitted for withdrawal five years before retirement. The report says the EPF should not compromise with the security and safety of the fund - therefore, it rejects the suggestion that part of the funds be invested in the private sector, unless there is a guarantee on returns and interest from the government.
On Employees' Pension Scheme (EPS) it suggests that instead of defining pensionable salary as monthly average salary in the final year of employment, it should be the average salary for five years which should be used to calculate pensionable salary. No exemption from EPS should be permitted, the report says.
