Social security is the protection that a society provides to
individuals and households to ensure access to health care and to
guarantee income security, particularly in cases of
• maternity or
•loss of a breadwinner.
THE MAIN OBJECTIVES
• To increase the productivity of industrial workers.
• To improve health and control sickness of industrial workers.
• To prevent occupational diseases and take the remedial measures.
• To remove mental and physical hazards to prevent industrial
• To take care of old age and the other consequences resulting there
• To ensure that various legislations are implemented properly to
achieve the above objectives.
Workforce In India
• As per the 2001 census, the total work force in our country is
402 million, of which 313 million are main workers and 89
million are marginal workers. Out of the 313 million main
workers, about 285 million is in the unorganised
sector, accounting 91 percent (Economic Survey: 2005-06).
• As per the NSSO estimates for the year 2004-05,India
population of 1093 million, with a workforce of about
million. Of these, about 7 per cent belong to organised
the rest 93 per cent of the workforce include those
employed and employed in unorgnaised sector
• According to Arjun Sengupta report on the
‘Conditions of Work and Promotion of Livelihood in
the Unorganised Sector’, an overwhelming 836
million people in India live on a per capita
consumption of less than Rs 20 a day.
• The middle class from 162 million(15.5%) to
• The extreme poor have also benefited (274 to 237
million) – 43 million of them to be precise.
• Their per capita consumption has gone up from Rs 9
to Rs 12
*Report is based on government data for the period between 1993-94 and
Estmd contribution to employment
No. of persons (in millions)
Mining & Quarrying
Electricity, Gas And Water
Trade, Hotels And Restaurants
Transport, Storage & Communication
Year: 1999/00 (Total labour force: 406 million)
Part of the workforce who have not been able to organize in
pursuit of a common objective because of constraints such as
casual nature of employment
ignorance and illiteracy
small size of establishments with low capital investment per
superior strength of the employer
”The unorganized Sector consists of all private enterprises having
less than ten total workers, operating on a proprietary or
partnership basis.” - by National Commission on Enterprises in the
Unorganized Sector(NCEUS) in 2004
Characteristics of Unorganised Labour
• The unorganised labour is overwhelming in terms of its number range and
therefore, they are omnipresent throughout India.
• As the unorganised sector suffers from cycles of excessive seasonality of
employment, majority of the unorganised workers does not have stable
and durable avenues of employment.
• The workplace is scattered and fragmented. The workers do the same
kind of job(s) in different habitations and may not work and live together
in compact geographical areas.
• In rural areas, the unorganised labour force is highly stratified on caste
and community considerations.
• The unorganised workers are subject to exploitation significantly by the
rest of the society. The unorganised workers receive poor working
conditions, especially wages such below that in the formal sector, even for
closely comparable jobs i.e., where labour productivity are no different.
• The unorganised workers do not receive sufficient attention from the
Trends in Employment in Organised and
Unorganised Sectors in India
Source: Ministry of Labour and Employment, Director General of Employment
and Training and Economic Survey (various years)
The Social Security Laws in India
Workmen’s Compensation Act, 1923 This Act takes care of disablement and death
due to employment injury.
The maximum amount of compensation for
disablement is Rs.5.48 lakhs and for death is
Rs. 4.56 lakhs
Maternity Benefit Act, 1961
Under this Act female workers are entitled
for paid holidays in certain establishments
for a certain period before and after
childbirth and provides for maternity and
Payment of Gratuity Act,
16 September 1972
The gratuity is payable in the contingency of
superannuation, retirement, resignation, death
or disablement due to accident or disease
subject to completion of 5 years continuous
Under the Scheme Gratuity is payable @ 15
day‘ wages for every completed year of service
subject to monetary ceiling of Rs.3.50 lakh
Social Security Laws in India
THE EMPLOYEES’ PROVIDENT FUND
1st November 1952
The Employees’ Deposit Linked Insurance
1st August 1976
1st March 1971
The basic rate of provident fund
contribution is 10% of basic wage/salary
and the higher rate is 12%.
8.33% of wages is diverted to pension
The Scheme is financed with the
contribution from the employer of the
establishment @ 0.50% of the wages of
the employees. Central Government also
used to contribute to the fund @0.25% of
The employees share of contribution @
1.16% of their wage with an equal amount
of employers share. The Central Govt. also
contribute @ 1.16%.
Social Security Laws in India
The Employees’ Pension Scheme, 1995
• The pension scheme is compulsory for all members of the family pension
• On completion of 33 years contributory service, 50% of pay is payable as
pension. The minimum pension for the widow is Rs.450/- per month and
maximum may go up to Rs.2, 500/- per month payable as normal
members pension on completion of 33 years service.
• In addition to widow pension the family is also entitled to children pension
@ 25% of widow pension payable up to two children till they attain the
age of 25 years.
• The Scheme is financed by diverting employers share of PF contribution @
8.33% of wage to the pension fund and The Central govt. also contributes
to the pension fund @ 1.16% of the wage.
Social Security Laws in India
Employees’ State Insurance Scheme
The Employees’ State Insurance Act, 1948 applies to non-seasonal power using
factories employing 10 or more persons and non-power using factories and
certain other specified establishments employing 20 or more persons for
Employees contribute @ 1.75% of their wages, while the employers contribute
@ 4.75% of the wages of insurable workers.
The Scheme provides the following benefits:
a. Sickness benefit including medical care.
b. Disablement benefit (which includes temporary and permanent
c. Maternity benefit.
d. Dependants benefit in case of death due to employment injury.
In case of maternity, the insured woman is entitled to maternity benefit @
full wage for 12 weeks
In case of disablement caused due to injuries sustained in the course of and
out of employment, the Insured worker is entitled to receive wages @ about
70% of normal wages from the ESIC for the entire period during which he/she
is undergoing treatment and is unable to attend to his or her duties.
Labour laws in India
• FACTORIES ACT, 1948
1. Factories Act includes
Hours Of Adults,
Leave With wages.
2. The main objective of Factories Act, 1948 is to ensure
adequate safety measures and to promote the health
and safety and welfare of the workers employed in
factories. The act also makes provisions regarding
employment of women and young persons(including
children & adolescents), annual leave with wages etc.
Summary and Conclusion
• The analysis of information available from the Census and National
Sample Survey Organisation revealed that the unorganised workers
account for about 93 per cent of the total workforce and there is a
steady growth in it over years.
• In this context, it is argued that the major security needs of the
unorganised workers are food security, nutritional security, health
security, housing security,employment security, income security, life
and accident security, and old age security.
• Convergence of various Social Security Schemes for the organized
and unorganised sector avoids duplication of benefits (both EPFO
and ESIC provide disablement and death benefits). This will also
result in reduction of administrative costs since both the
organizations have vast infrastructure which can be utilized if some
of the functions are combined.
• In sum,the study calls for a Comprehensive, Universal and
Integrated Social Security System for the unorganised workers in