Social Security for Unorganised Sector Workers

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Social Security for Unorganised Sector Workers

By | August 2010
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Social Security for Unorganised Workers
The National Commission for Enterprises in the Unorganised Sector was set up by the UPA Government under the Chairmanship of Arjun Sengupta in September 2004. The Commission prepared two draft bills: (1) Unorganised Sector Workers Social Security Bill, 2005, and (2) Unorganised Sector Workers (conditions of work and livelihood promotion) Bill, 2005. According to the draft bill, it will cover all workers in the unorganised sector with a monthly income of Rs.5,000 and below. This category includes self-employed workers (including marginal and small farmers), wage workers including agricultural labourers, and home-based workers. It also includes informal workers under the organised sector. It is estimated that around 30 crore workers are eligible under this scheme. The Bill indicates that there will be a national minimum social security for all eligible workers covering four things: (a) health insurance; (b) maternity benefits; (c) life insurance; and (d) old age pension. Every unorganised sector worker is eligible for registration. The registered worker will get a unique social security card. The existing welfare programmes will continue as before. A National Social Security Fund will be created. The scheme will be financed from the contributions at Re.1 a day by workers, employers (wherever identified), and the Government (that is, Rs.3 per worker a day or Rs.1,095 a year). The Government contribution will be divided between Central Government and State Government in the ratio of 3:1 respectively (75 paise per worker by the Centre and 25 paise per worker by the State Governments). Similar to the Employment Guarantee Scheme, the National Commission estimated the costs of the minimum social security scheme. If all the 30 crore workers are covered, the contributions would work out to Rs.32,850 crore. The share of the Central Government will be Rs.17,548 crore and that of the State Governments Rs.5,010 crore. This adds up to a...
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