Protecting The Vulnerable
Providing social welfare to informal sector
A new integrated model to ensure holistic
development of the informal sector
TEAM CO-ORDINATOR : VRINDA KAPOOR
Contact : email@example.com
A vast majority of Indians earn their living through working in
unorganized sector but the present status of social protection is
Output & Employment :
Nearly 92% of India’s workforce falls in unorganized sector
Entire farm sector falls under informal sector
Only one-fifth of non-farm workers in organized segment
In the non-farm sectors, as income increases, share of
informal sector declines
Informal sector accounts for 40% of total industrial output
and 35% of total exports.
Compared to employment, the output contribution of
informal sector is low.
Suggests the sector is not efficient and must be finding
difficult to survive tough competition with organized sector
Social Protection :
The NSS data from 1999-00, 2004-05 & 2009-10
employment surveys show that
(a) Share of informal sector in non-farm sector has
(b) Percentage of workers with access to social
security has declined
According to the NCEUS, only about 7% of the
total workforce in India has any form of social
Major areas of vulnerability are:
i) illness requiring hospitalization,
ii) untimely death of bread winner,
iv) maternity episodes,
v) Retirement from work.
Present schemes lack in design and implementation
Reach needs to be increased
ACCIDENT & LIFE INSURANCE
OLD AGE PENSIONS
The above solution can be summarised by
the following flowchart :
MAKE UID’S &
CHILD CARE SCHEMES
SKILL TRAINING PROGRAMMES
ORGANISATION INTO ENTERPRISES
S. No. STAKEHOLDER INCENTIVE RECRUITMENT
1. CENTRAL GOVERNMENT The government is able to ensure access to
health care and insurance to workers in the
A core committee of
officers to look into the
efficient working of the
2. STATE GOVERNMENT The state and local governments also get
funds from the central government per person
enrolled. So, they are also provided with a
strong incentive to enroll as many people as
Needs to set up a
committee of around 50
people to help insurers
identify workers in the
unorganised sector and
look after the day-to-day
functioning of the system.
3. INSURER Paid premium for each person enrolled.
Motivation to enroll as many households
from the unorganized sector as possible,
resulting in better coverage of beneficiaries.
Needs to recruit insurance
officers to identify and
4. HOSPITALS Paid per beneficiary treated. So, public and
private hospitals have incentive to treat
beneficiaries as the money from insurer
directly flows to them.
Can make do with the
staff already hired by
5. GRADUATE STUDENTS Graduate students are easily tapped in the
training programme as they get an
opportunity to build their resume and gain
Once the enrolment of all
workers are done, the
Govt. needs to hire
approx. 50,000 students to
6. RETIRED PROFESSIONALS Retired officials have a lot of spare time and
they want to use their spare time a productive
The number will be lower
than the number of
graduate students but
should be around 20,000-
1. Incentive driven
scheme (incentives to all
• The funds allocated to state govts. ensure political will to implement the scheme
wand enroll as many as possible.
• Incentives to various stakeholders decreases the possibility of corruption in the
3. Use of UIDs(Paperless
and cashless scheme)
• Biometric cards ensure that only enrolled person can use it. So, the services cant
be misused by any other person.
• Portability: People can go to any impaneled hospital or bank all over India and get
the benefit just by the use of their UID. This helps the migrants as they are not
asked for fresh documents at different places.
• Paperless and cashless scheme implying illiterates will find no problems.
4. Use of advanced
technology and central
• Fights inconsistency problems : A single database for whole country. So, a person
enrolling in many districts can be identified by the database with the biometric
details fed into the central database.
• Ensures monitoring and effective performance
• Ensures convergence in various benefits : Various benefits provided using the
same scheme ensures convergence, not found in current social policy.
IMPACT AND REACH
2. Decentralized scheme • Ensures maximum enrollment of people
5. Child Care Schemes and
• Flexibility to women: can take up formal jobs
• Skill training can enhance employment opportunities and increase income
CHALLENGES AND MITIGATIONS
CORRUPTION : The insurer may try to enroll
illegitimate people in order to gain more funds .
1. Central Officer : An employee from the Central
Government can be posted in all districts and
verify the legitimacy of enrolled people.
2. RWA: RWAs can also be given the responsibility of
verifying the legitimacy.
TIMELY PAYMENTS : The Central government or
the insurer may get very late in making payments to
the hospitals/banks because of which hospitals/banks
can refuse the services to the targeted people..
1. A legal contract to be signed between all the
stakeholders where a time limit for payment is also
2. In case the payment is delayed, heavy penalty
imposed on the defaulter . The hurt stakeholder can also
take the defaulter to court .
3. Complaint boxes :If any person is denied any service
he/she is eligible for, he can register a complaint from
any nearby Help Center (via a toll free call)
LOW INTEREST BY TARGET GROUP : The
illiterate and unorganised people may not be able to
weigh the benefits and not show keen interest in the
1. Awareness campaigns : By affiliated NGOs and
2. A help desk by NGOs at the UID Center to help
people in all possible ways , including registering
LOW VOLUNTEER TURN-UP 1. Nominal payments based on contribution to the
2.Awareness campaigns in colleges & public places
•Bhalla, S. (2003) : The Restructuring of the Unorganized Sector in India.
•Srivastava, R. (2012): Gender and Economic Policy Discussion Forum
‘Engendering Social protection for Informal sector workers’