Protecting the vulnerable:
Providing social welfare to informal sector workers
“ The Virtually Unidentified Sector “
Vikas Mishra | Akanshi Bhargava |Sparsh Banga |Dhruv Gupta | Opender Garg
Who are they ?
Over 92% of India's working
population which has no
social security , no financial
security, no housing facility,
work for long hours and
face high exploitation.
India's unorganized sector
created 57% of the India’s
Net Domestic Product in
2006, about 9 fold less per
worker than the organized
Identifying the unorganized workforce is extremely
complex as they operate outside the tax ambit.
There is no consensus nationally on the classification
of the unorganized sector.
There is a lack of convergence of related or similar
social security schemes.
Financial exclusion of the informal workers from the
institutional banking system makes delivery of social
Informal workers are disparate and fragmented
which makes enforcement and provisions by
centralized schemes difficult to administer.
Most of the unorganized workforce is highly
unskilled, illiterate and unaware of the social security
schemes which makes them vulnerable and
Unique identification and compulsory
registration of every individual using the
principle of Aadhar ACCOUNT.
Comprehensive Social Security schemes such
as HELP, IPS and Financial Institution
exclusively for unorganized sector.
Formation of separate Ministry of Social
Security for unorganized sector to make policy
formulation, implementation and analysis of
social security an easier task.
Creating Opportunity, spreading awareness
and enhancing skill sets through skill
enhancement programme and Artisan
Overview of the Problems and Solutions…
Proposed SolutionsExisting Problems Major Challenges
Identifying the vulnerable and providing benefits through Aadhar Account
• Aadhar Number needs to be modified into Aadhar account.
• It should be made mandatory and legal responsibility of every citizen of India to register and UPDATE EMPLOYMENT DETAILS
to receive and check Social Security Benefits provided by the government of India
• Aadhar Account will be used by the government to:
• Classify and organize the workers under different associations such as Association for Construction Workers etc. on the
basis of their income and employment.
• Transfer social Security benefits directly in the bank account linked with Aadhar account and the workers will be
notified by SMS, Aadhar Call Centres and AadharWebsite
• Aadhaar Volunteers and NGOs will help in spreading awareness about benefits of Aadhar account and assisting the workers
to update their employment details and benefits from appropriate social security schemes.
• Bank Account Details
• Mobile No.
• Aadhar ID
• Age and Biometric
• Employment Status
• Income Details
• Social Benefits received from
employer ( If Any)
• Bank Account Details
• Mobile No.
• Check for Social
• Complain or seek
Aadhar Implementation Model
Registration Centres Update Centres
HEALTH – EDUCATION - LIFE - PENSION
Health Insurance Life Insurance
Old Age Pension
Each worker will be entitled to
hospitalization for himself and his
family members, costing Rs.25,000 a
year in designated hospitals or clinics,
public or private, recognized by the
• Natural Death: Rs. 50,000/-
• Death or total disability due to
accident: Rs. 1,00,000/-
• Partial Permanent Disability due
to accident: Rs. 40,000/
Old age Pension: Monthly pension of
Rs. 1,000 from 60 years.
Post 65 years the person will get an
additional medical benefit of Rs. 200.
The workers can avail education
loan from any of the nationalized
banks. The payment of the loan
EMIs and interest begins after the
Education Loan Facility
Social and Financial Security
Help is a comprehensive social
security scheme for low income
unorganized workers. Under this
scheme the workers are made
financially secured. The insurance
premium is jointly paid by
government and individuals at
below mentioned proportion.
Govt. : Workers
0-2000 95% : 5 %
2001- 4000 90% : 10 %
4001 - 6000 75% : 25 %
6001 - 10000 60 % : 40 %
Social and Financial Security
Promoting Self Help GroupsProviding Micro Credit Facility
Financial Institution under RBI for unorganized sector
The institution will provide credit facility to the
workers of unorganized sector at low interest rates
and flexible time span with less collateral
The institution with the help of NGOs and Volunteers will be
responsible for spreading awareness among the workers
about the habit of saving and pooling money in the form of
Self Help Groups.
IPS is the unique web based initiative which will offer farmers all the information, products and services they need to
enhance farm productivity, improve farm-gate price realization and cut transaction costs.
Farmers can access latest local and global information on weather, scientific farming practices as well as market prices at
the village itself through this web portal -in regional languages.
IPS will facilitate supply of high quality farm inputs as well as purchase of commodities at their doorstep.
Information and Purchase scheme (IPS) : Opportunity to unorganized agricultural sector workers
A financial Institution should be exclusively established under RBI to provide financial security to the unorganized workers.
Social Security Law
Due to lack of convergence of related or similar social security schemes there is a need to merge the
existing Acts to form a social security law which targets all the sections of unorganized sector and is
uniform in all the states of the country.
There is need of following amendments and additions in the Social Security Law:
• Revival of Janta Cloth Scheme: Since the Handloom sector is one of the largest employment providing
sector, Janta Handloom Cloth Scheme needs to be revived for the workers in handloom industry.
• Housing Facility: All the companies with more than 30 employees in service sector and 50 in
manufacturing and construction sector need to provide housing facility to their workers.
• Nationalization of Ration Cards: Ration cards should be nationalized i.e. people can avail ration from any
PDS shop all over India.
• Minimizing Bribes: To control the problem of bribing and help the unorganized sector workers get the
benefit of social security schemes the officer-in-charge of the Government Regulating Authority who is
authorized to check the implementation of schemes in companies must be given incentives in the form
7%-12% of the Challan (Fine) Amount.
Implementation and Regulation of Social Security Schemes
Responsible for monitoring and checking the implementation of the
scheme. Its main role is to prevent malpractices such as bribery and find
solutions to loopholes in the system.
Responsible for spreading awareness about the benefits of Aadhar
account and various social security schemes. They are also responsible
to help the workers to reach their association for their demands or
complaints against non-availability of social security benefit or
exploitation. The undergraduate students can be provided at least 15
days internship for the same.
Using the employment details from the Aadhar account the workers will
be grouped under different Association such as Association for
Construction Workers etc.
The workers can seek assistance and support regarding any social
security benefits or complain against exploitation to the regional head of
their Association. Hence Association is liable to help the workers to
attain their social security rights and prevent exploitation
National Social Security Commission for
Regulation and Management
Commission for Finance and Budget
Ministry of Social Security for Unorganized Sector
Building Skillsets and Creating Opportunity
With the help of NGOs and Volunteers the government will provide skill enhancement program to the
unorganized sector workers in various fields such as IT, Business Development and Artistic Creativity.
Various incentives such as travelling allowance etc. can be provided to the workers to attract them for the
After successful completion of the program the workers will be offered a certificate of merit and insurance
backed credit facility to start their own business.
Artisan Solutions Limited (ASL) : ASL is an innovative step to provide financial security to the Artisans.
The government will have tie ups with different domestic and foreign companies which have huge demand
for artistic products. The government will sell the good quality artistic products to the domestic and foreign
companies/buyers. Hence government will act as a medium between these companies and artisans,
therefore increasing the efficiency, productivity and income of the artisans.
Skill Enhancement Program
Business Development and MarketingIT Artistic Creativity
• Due to lack of awareness it could be difficult getting correct and updated information about income and employment
at initial stage, but with active media participation, awareness programmes by NGOs and volunteers this problem
could be easily solved.
• Arranging funds for different programmes could be a difficult task..
On the basis of its detailed assessment, the recommended Programme, in our view, not only provides a minimum
standard for conditions of work and social security but also provides a measure of livelihood opportunities to the 92
percent of the unorganized workers in this country. We believe that these measures are within the administrative and
fiscal capacity of the Government, and if implemented within a short period of time, will have a significant impact on the
lives of the working poor.
• Aadhar Account will help the government to easily identify and classify the informal sector workers according to their
income and employment.
• One of the major problems faced by low income unorganized people is financing the medical ailments, higher
education and old age needs. Therefore HELP scheme will solve all the stated problems.
• Under association of unorganized sector the workers can easily raise their voice against exploitation by the employers
and seek help from the regional head of their association.
• Activities of the employer will be checked by the regulating authority which can protect the rights of the workers.
• The schemes would be financed through the National Social Security and
Welfare Fund (NSSWF).
• The schemes can be financed in following ways:
• Grants and loans from the Central Government
• Contributions from workers, employers and state governments
• Any tax or cess that the Central Government may impose for the purpose of providing
social security for unorganized workers.
• Any tax or cess that the Central Government may impose on commodities and/or
services in lieu of the employers' contributions.
However, the share of contribution of the BPL workers, if any, would be borne by the
Central Government. The government's cost may be entirely borne by the Central
Government or it may be shared between the Centre and States.
• National Commission for Enterprises in the Unorganized sector. (2009). The Challenge of
Employment in India. Retrieved from
• Bhalla, S. (2003). The Restructuring of the Unorganized Sector in India.
• Kulshreshtha, A.C. (2011). Measuring the Unorganized Sector in India.
Retrieved from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1837193
• Goswami, Paromita. (2009). A Critique of the Unorganized Workers’ Social security Act.
Economic and Political Weekly.