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  1. 1. Protecting the vulnerable: Providing social welfare to informal sector workers “ The Virtually Unidentified Sector “ Team Details Rapid Squirrels Vikas Mishra | Akanshi Bhargava |Sparsh Banga |Dhruv Gupta | Opender Garg
  2. 2. Informal Sector: 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 sector.
  3. 3. 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 security challenging. 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 exploitable. Identification Social and Financial Security Regulation Opportunity, Skills and Awareness 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 Solutions Limited. Overview of the Problems and Solutions… Proposed SolutionsExisting Problems Major Challenges
  4. 4. 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. Aadhaar NGO Aadhar Kiosks Aadhar Volunteers Banks Banks Aadhar CentresRegister for Aadhar Account • Bank Account Details • Mobile No. • Aadhar ID • Age and Biometric Details • Employment Status • Income Details • Social Benefits received from employer ( If Any) • Bank Account Details • Mobile No. Update Details • Check for Social Security Benefits received. • Complain or seek assistance USSD/ SMS Aadhar Call Centre Aadhar Website Aadhar Implementation Model Registration Centres Update Centres
  5. 5. 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 State Board. • 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 recruitment. Education Loan Facility Social and Financial Security HELP 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. Income Range (Rs.) Premium Proportion Govt. : Workers 0-2000 95% : 5 % 2001- 4000 90% : 10 % 4001 - 6000 75% : 25 % 6001 - 10000 60 % : 40 %
  6. 6. 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 requirement. 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.
  7. 7. 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.
  8. 8. Implementation and Regulation of Social Security Schemes Government Regulating Authority 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. Volunteers and NGOs 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. . Association of Unorganized workforce 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 Responsible for maintaining and allocating budget for different social security schemes National Social Security Commission for Regulation and Management Commission for Finance and Budget Management Ministry of Social Security for Unorganized Sector
  9. 9. 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 training program. 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
  10. 10. • 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. Impact Implementation Risk
  11. 11. Funding • 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.
  12. 12. Reference • National Commission for Enterprises in the Unorganized sector. (2009). The Challenge of Employment in India. Retrieved from http://dcmsme.gov.in/The_Challenge_of_Employment_in_India_(Vol.%20II).pdf • Bhalla, S. (2003). The Restructuring of the Unorganized Sector in India. Retrieved from http://planningcommission.nic.in/reports/sereport/ser/restruc/stdy_rsturc_ch1.pdf • 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. Retrieved from http://www.epw.in/system/files/pdf/2009_44/11/A_Critique_of_the_Unorganised_Workers _Social_Security_Act.pdf