Context

  • The universal social security will cover loss of income; death and disability; illness and medical bills; and unemployment benefits for all.

The scheme

  • The Union government plans to introduce a universal social security network for workers in both the informal and formal sectors.
  • The scheme will be rolled out in a phased manner.
  • The scheme was launched after demonetization.
  • The Ministry had started an enrollment campaign, starting from January 1 till June 30th.
  • The government brought in an amnesty scheme for employers who were earlier not part of the Provident Fund regime.

The exercise

  • During the exercise, the workers employed from April 2009 to December 2016 were also included.
  • More than 1.3 crore new workers were brought under the Employees’ Provident Fund (EPF) regime.
  • 20 lakh new employees were included as part of the amnesty scheme and 80 lakh contract labourers.
  • It included construction workers and those engaged by the public sector units at the Centre and the States.
  • The Labour Minister said the EPF security network currently covered 4.8 crore contributory members and had a corpus of over Rs. 10.43 lakh crore.
  • There was no superannuation fund in the country and EPF alone was the support for the employees who were retiring or getting terminated.
  • The law might confine to wages of those who had got a ceiling of Rs. 15,000, for that EPFO eligibility would be there.

The need of the hour

  • The government will meet the cost of the programme for the poor.
  • Universal Social Security coverage is for both informal and formal sector work-force.
  • An all-inclusive universal social security cover will be available soon for over 45 crore workers in the country, covering all potential risks, along the lines of systems prevalent in the West.
  • Under the proposal firmed up by the labour ministry, the social security contributions will be mandatory but the deduction could be lower than those made currently, all of which adds up to about 30% of income.
  • This lower limit will ensure that there is no major dent in the take-home salary of those whose income is low.
  • While the social security covers for people the below poverty line (BPL) would be paid from the taxpayers’ fund, those above the poverty line would have to suffice for themselves.
  • Going forward, the policy could introduce differential rates based on certain income slabs.
  • The deductions under the universal social security cover could be substantially lowered for people below the fixed income slab while those above the set income bracket may continue to pay at the existing rate.
  • India’s total workforce currently stands at 450 million, out of which a little over 10% are in the organized sector.
  • Every year, more than 10 million people are added to the country’s workforce. Most won’t get the minimum wage and will lack any kind of social security.
  • The new policy will be part of the social security code, one of four codes that the labour ministry is finalizing and will subsume 17 existing items of legislation governing social security coverage in the country.

Benefits

  • Since labour and social security are concurrent subjects intended to build decentralized state departments to run the scheme under an independent department for social security at the Centre.
  • Benefits include monetary allowances for preventive medical care,
  • sickness unemployment, old age, employment injury, maternity, invalidity
  • The benefits are to include all the branches under the International Labour Organization’s Social Security Minimum Standards) Convention, 1952 (No 102).
  • These cover preventive and general practitioner care, benefits for sickness, unemployment, old age, employment injury, maternity,
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