Improving Social Security in Unorganized Sector

Bharat Dogra

One of the biggest challenges in India is to improve the social security in the unorganized sector where farmers, workers, artisans and others have hardly any social security at present. Perhaps the most effective way of meeting this challenge is to have a scheme of universal or near-universal pensions so that all the elderly citizens can get a pension which is the equivalent of at least half of the minimum wage rate.

 At the level of the existing rates approximately this means providing a monthly pension of about Rs. 2550 or so to about 105 million elderly citizens. Of course those already receiving a higher pension or those who are from very rich households can be kept out of this scheme. 80 per cent coverage can be achieved on the basis of an annual budget of Rs. 2.5 lakh crore or so.

 This burden can be shared by the Union government and various state governments on the basis of some formula on which common agreement can be reached. This may be difficult, but this is possible.

Compared to this the present annual budget of the Indira Gandhi National Old Age Pension Scheme is Rs. 6130 crore while the annual budget for the Indira Gandhi National Widow Pension Scheme is Rs. 2221 crore. Clearly this is extremely low compared to the real needs yet there has been absolutely no increase in this year’s Union budget.

Hence there is clear need for mobilization of citizens including elderly citizens for a universal scheme of pensions ensuring at least Rs. 2500 per month to all elderly citizens. In addition there should be a provision for linking this to inflation so that along with the pension for government employees this pension for can also increase with inflation.

The government has been publicizing some insurance schemes for improving social security in the unorganized sector but the actual allocations for these have not been adequate. An allocation of Rs. 209 crore for swavalamban scheme was made in the Union budget for financial year 2016-17 but in the revised estimates  for this year this allocation was reduced to zero.

 In the budget for the same year an allocation of Rs. 450 crore was made for government’s contribution to the Aam Aadmi Bima Yojana but in the revised estimates this was reduced to just Rs. 100 crore. An allocation of Rs. 200 crore was made for Atal  Pension Yojana but in the revised estimates this was reduced to just Rs. 40 crore.

Clearly social security has been badly neglected in the unorganized sector and this neglect needs to be remedied with a sense of urgency in the near future.

 Organisations like the national level Pension Parishad which have been campaigning for universal pensions and related demands should get wider support of citizens.  

Frontier
May 08, 2017