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  1. 1. Team Details: Aman Gupta IIT Kanpur Kishlay Kumar IIT Kanpur Prabhat Yadav IIT Kanpur Vikash Shankar IIT Kanpur Kanhaiya Lal Chaurasiya IIT Kanpur TEAM PRAYAS
  2. 2. Organized Sector Unorganized Sector Agricultural Worker Construction Worker Manufacturing and Community Service Where India Stands? 28.90% 27.40% 21.80% 18.60% 14.80% 12.200% 10.40% 4.70% 3.60% 1.80% Sweden Germany UK Japan USA Brazil Russia Srilanka China India Fig 1: Expenditure on Unorganized Sector (World Labour Report 2000) ILO Direction ~ 5% B U T
  3. 3. What it means? • The overall security for a person in the family, workplace and society. • A system to meet the basic needs as well as contingencies of life in order to maintain an adequate standard of living. • Minimum social security package comprises life and disability insurance, health and maternity benefit and old age pension for all unorganised workers/ occupational groups irrespective of whether they belong to APL/BPL category. But in India • Majority of workers in the unorganized sector are not in a good financial condition. • At any time catastrophic spending or loss (such as death of working member, loss of working assets) push them below poverty line and in privation. • They are neither motivated nor supported to complain against any injustice or exploitation being done to them. Unorganized Workers •Work for longer hours in harsh working conditions. •No access to an adequate level of health benefits. •Violation of right to minimum wages rules. Migrant Workers •Squatter settlements of them are regarded illegal by the municipal corporation; leads to eviction of migrants. •This is blatant violation of their right to shelter as well as human rights of migrants in cities. Women in Informal sector •Unequal payment as compare to their male counterpart. •Various forms of harassments at the workplace.
  4. 4. • Poor Implementation & Delivery System • Inefficacy in Schemes and Laws • Funding Problems Lack of awareness about the schemes to the stakeholders. Non- Recognition of the workers due to non availability of the documents. Unable to provide minimum social security to all the workers. Shortage of manpower in delivering the schemes resulting in inefficacy. Lack of research and development, innovations and consensus of the stakeholders. Complicacies in the registration process due to inefficient system. Inefficiency in streamlining of funding due to inefficient monitoring system. Lack of coordination among different schemes leading higher expenditure on supply side. RestrictiveLaborRegulations •Labor regulation in India is archaic and has become increasingly restrictive. •With about 47 union laws and 157 state regulations that overlap, budding entrepreneurs face regulatory confusion and are forced to remain small and informal to avoid the mess. •Workers also end up with low-quality livelihoods and limited social security coverage.
  5. 5. Aggregators and WFCs ROLE • Contracting of Service Providers and Insurance Companies . • Target Beneficiaries • Awareness Creation • Mobilization for Enrolment • Grievance Redressal , strictly observing the complaints filed by workers. ROLE • Defining scheme • Provide Clarity on Roles and Responsibilities and act as a Point of Convergence. • working with the various stakeholders (government, industry, and academic representatives) to design and enforce the implementation. • Monitoring ,evaluation & Record Keeping. • Financial Management: Managing national level social security fund. • Research and Development. NSSA (National Social Security Administration) owns the scheme at national level,controlling vehicle and not an operating vehicle, a single trust for unorganised sector that owns the scheme at national level. It comprises of ministers relevant to various schemes chaired by PM. ROLE • Its responsibilities will be on the lines of the state level administration. • Monitoring and Ensuring implementation of social security package • Liaise with and facilitate the functioning of WFC and address grievances and complaints DSSC (District-level Social Security Committee) Includes representatives of workers, civil society organizations and government representatives. SSSA (State Social Security Administration) autonomous body, similar to NSSA, at the state level that works with the state govt., the NSSA, aggregators . “We recommend a single window architecture, governed by a single entity, will help eliminate the inefficiencies associated with multiple purchase points.”
  6. 6. Spreading Awareness among Workers Maximum awareness can be created while surveying each household. Awareness programs may be organized at the place of work itself (e.g. construction work sites, market places in the case of street vendors etc.), these programmes will be organised by the facilitation centre under the jurisdiction of which lies the area. Care will be taken so that the timing of the awareness programmes does not conflict with the worker’s working time. Lunch intervals and holidays can be utilised for increasing awareness Diversified means for awareness-building like electronic media ,newspapers wall writings hoardings in regional languages etc. for spreading awareness can be proved very useful. The workers will be encouraged to go the nearest WFC and get themselves registered . Identification Workers in the unorganised sectors may be mentally not inclined to undergo the hassles for availing the benefits of the schemes, being poor, illiterate and belonging to lower strata of the society may not have the mental and physical courage to demand for their entitlements. This situation leads to the need for persuading, encouraging and providing legal aid and assistance to such people. It’s the job of aggregators and WFC to arrange a proper team to survey the households and collect all relevant data of households depending on the unorganised sector for their livelihood, within the jurisdiction of that WFC. For the purpose of survey help of NGO’s can be taken, facilitation centres can hire some school or college students or people from local areas, who are willing to do such works, for the purpose and should divide the work to avoid imposing pressure on the students and affecting their studies. Surveys will be conducted in the phased manner gradually covering the entire area under the jurisdiction of that Workers’ facilitation centre (WFC). The job of persuasion and encouragement will be done while surveying and at awareness programs .
  7. 7. Worker’s registration at WFC Updation of member wise contribution details to fund manager Aggregators will go to doorsteps and collect contributions. Money submitted to WFC Smart card and amount details will be captured in POS and receipt will be issued. Money Deposition into fund manger A/C in Bank/Post Office. •Link between workers and schemes. •Equipped and funded to take undertake registration, information dissemination, education and delivery of essential social security packages as well as handling grievances •Spreading awareness among the workers and enrolling them as beneficiaries of the schemes. •Monetary transactions under various schemes will be done through WFC. •To collect information and statistics by conducting surveys at regular intervals. •Proper mechanism of grievance redressal - Workers have to file complaints against exploitation, unethical payments etc. •To constitute employment exchange for workers. - In changing economy widespread employments are available, WFC will try to get someone a better job. •Marketing linkages to the workers especially-craftsmen, pottery makers, artisans, weavers, sculptors etc.
  8. 8. Registration • Workers get themselves registered at near-by WFC. • Once surveyed workers will not be asked for documents such as birth certificates, identity proofs etc. • Workers will be provided with bio- metric enabled smart card containing their fingerprints and photographs as their identity proof containing a unique identification number. Same identity card will be valid in every state (this will be helpful especially for migrant workers, who represent almost 20% of the unorganised sector). • Migrant workers will be registered at their native place and the home state will take the responsibility of providing social security to them. Aggregators • It will comprise various SHGs, NGOs, public sector insurance companies , registered workers unions, civil society organizations, different educational institutions and any other category as identified by NSSA. ROLE • Management of WFC at block level. Reaching doorsteps each households for survey and collecting relevant information about households and spreading awareness. • Try to unionize the working class wherein union leader will be the facilitator and union office would be facilitation centre to educate working class about their rights, duties and availability of various government welfare schemes . • This approach will lead to formation of Trade Unions in association with SHGs of Unorganized Workers, where worker would get platform to raise their voices and regain dignity.
  9. 9. The current coverage provided for natural death under current life insurance schemes is ` 30,000 which according to the “human capital calculations” does not provide adequate cover for even a 50 year old in the lowest income quintile. Each Individual will be informed that life insurance cover under social security ensures only a minimum human capital cover. It must be the duty of the facilitators to inform the beneficiary about the value of her/his human capital. By two approaches:- • The actuarially fair premium-Based on market mortality rates laid out by IRDA, the actuarially fair premium for AABY-JBY is `86. . • The market price for life insurance- Based on price points provided by the financial services firm, price for an actual life and accident cover similar to that by AABY-JBY is ` 123. As the claims ratio indicates, premium appears too high for the extent of cover provided.Hence, there is a need of opening up the product premium for competitive bidding from life insurance companies in the market, similar to the model currently followed by Rashtriya Swasthya Bima Yojana (RSBY) for health insurance. Fig 2: Incidence ratio 1 for AABY/JBY (As per actuarial table published by IRDA) Fig 3: Claims ratio 2 for AABY/JBY (Andhra Pradesh)
  10. 10. We recommend that the current RSBY scheme should extend its benefit to unorganized sector. HealthCare Health Insurance companies have to enrol all the workers registered at WFC, they don’t have to bother about reaching households, as Insurance companies have an incentive to target healthier families, as they are less likely to make claims, and have less incentive to reach out to the remote household. Health facility must be offered through the Unorganized-Worker-Smart Card Platform. The hospitals and medical facilities will be located closer to citizens who lack access . “An analysis of the RAS45 reveals that there is severe inequity in the geographical distribution of hospitals in each district and that beneficiaries are therefore expending additional cost and time in accessing medical services – 52% of beneficiaries spend money out-of-pocket on transportation in order to access medical services under RAS..“ Catastrophic care insurance schemes for households below the poverty line. - Following the lead of Andhra Pradesh and Tamil Nadu, we recommend that all state governments take the lead in providing tertiary insurance cover for their citizens. - A combination of secondary and tertiary care will enable complete health insurance coverage for households. Developing preventive hospitalization for Cardiovascular Disease in RSBY – “According to the World Health Organization (WHO), cardiovascular disease (CVD) will be the largest cause of death and disability in India by 2020. Diabetes, high cholesterol, and hypertension along with obesity (measured with the help of body-mass-index) are the main drivers of CVD risk.” However, CVD is an ailment that can be identified and prevented by using cost-effective techniques as highlighted in the NAC report on universal health cover37 and proved by many studies.
  11. 11. • Pension schemes and maternity benefits schemes facility must be offered through the Unorganized-Worker-Smart Card Platform( as in RSBY scheme). • Many workers, being poor and illiterate are unable to think about their old age, they don’t bother about getting themselves enrolled as a beneficiary, also they find the procedures very complicated. We have placed our suggestions keeping these things in notice. • As per the report of CRIISP notes there is strong economic logic to extend the matching contribution from GOI for perpetuity. Any contribution from the government lends immense credibility to the scheme and serves as an incentive for those hesitant to contribute. • There will be provision for Catastrophic loss (apart from physical loss) insurance policies for all unorganized workers. • Labor laws should move from concurrent list to state list- - Individual states are better at tweaking labor laws to balance flexibility and security with respect to their political economy. - States should allow flexible labor laws to give choices and opportunities for employees by allowing, for instance flexibility in working hours, night shifts for women, etc. Completing Social Security Package • The proposed system may pose some initial challenges - The whole system may take extra expenditure initially (which is fixed cost ), which might cause inability to depreciate the dereliction nature of government, in our developing economy, towards the people of unorganized sector. But, once established its widespread benefits and sustainability will outweigh its cost. -In the vast geographically diverse extent of India, it may be a challenging task to establish the system through out the country. • Traditional mindset of Indian people (like suppressed thinking of workers and poor ) may cause hindrance in functioning of the system. • System irregularities, like corruption, carelessness in taking responsibilities, are ubiquitous. Challenges
  12. 12. • 1: Incident ratio is defined as the ratio of total claims in a year to total number of policies issued in that year. • 2: Claims ratio is defined as the ratio of total value of claims settled in a year to the total value of premiums received. • AABY – Aam Aadmi Bima Yojna • APL – Above Poverty Line • BPL – Below Poverty Line • CRIISP – Committee to Review Implementation of Informal Sector Pension • CVD – Cardiovascular Disease • DSSC – District-level Social Security Committee • GOI – Government Of India • ILO – International Labour Organisation • IRDA – Insurance Regulatory and Development Authority • JBY – Janshree Bima Yojna • NSSA – National Social Security Administration • RAS – Rajiv Aarogyashree Scheme • RSBY – Rashtriya Swasthya Bima Yojna • SHG – Self-Help Group • SSSA – State Social Security Administration • WHO – World Health Organisation
  13. 13. • As per actuarial table published by IRDA. Source: Mortality_Tables_(2006-08)_ult%20.pdf . • In the absence of data on yearly renewal rates of AABY, the analysis assumes a renewal rate of 70%. (The only available data source for AABY renewal rates is data from the Andhra Pradesh government. The aggregate renewal rate for Andhra Pradesh as on July 2, 2013 is 71.4%. Source: ). • World Health Organization. (“The World Health Report 2002 - Reducing Risks and Promoting Healthy Life” 2002) . • . • insuranceschemeAndhrapradesh?utm_source=slideshow02&utm_medium=ssemail&utm_campaign=s hare_slideshow_loggedout •