This document discusses alternative social protection mechanisms for India's large unorganized sector. It analyzes the demographics of formal and informal employment in India. Existing social security schemes mainly cover only 8% of the workforce in the organized sector. It recommends a national social security policy and authority to oversee three categories of workers: 1) formal sector, 2) below poverty line, 3) informal/self-employed. Specific recommendations include reforms to existing schemes, streamlining social assistance, and a contributory national pension scheme for the large informal sector workforce.

1. Alternative Mechanism of
Social Protection
for
Unorganised Sector in India
1. Sharad Singh, Regional Provident Fund Commissioner
2. Meraj Ashraf, Deputy Director
National Academy for Training and Research in Social Security
New Delhi, India

2. Content
1. Scenario Mapping
(a) Demography
(b) Existing Social Security Arrangements in India
- Social Security Schemes for the Organized
Sector
- Social Security Schemes for the Unorganized
Sector-Public & Private Initiatives
2. Problems in Universalisation of Social Security
3. Recommendations

3. Workers in Formal and Informal Sectors
(in million)
Category Agriculture Non-agriculture
Total
Formal 4.88 51.57 56.45
Informal 232.80 107.52 340.32
Total 237.67 159.09 396.76

4. Age Pyramid for INDIA, 2001
80+
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
0-4
Male Female

5. Age Pyramid for INDIA, 2051
80+
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
0-4
Male Female

6. Risk Covered under Social Security
Statutes
Disablement
- Workmen’s Compensation Act, 1923
- Employees’ State Insurance Act, 1948
Death
- Workmen’s Compensation Act, 1923
- Employees’ State Insurance Act, 1948
Maternity
- Maternity Benefit Act, 1961
- Employees’ State Insurance Act, 1948

7. Risk Covered under Social Security
Statutes- contd.
Medical,Unemployment Bene fit and Disable Pension
- Employees’ State Insurance Act, 1948
Old-age Income Security and Pension
- Coal Mines P. F. & Bonus Scheme Act, 1948
- Employees’ P. F. & Miscellaneous Act, 1952
- Assam Tea Plantations P. F. Scheme Act, 1955
- Seamen’s Provident Fund Scheme Act, 1955
Funeral
- Employees’ State Insurance Act, 1948

8. All these statutes provide social security
coverage to 8% of the workforce only because
of threshold and eligibility criteria.

9. Initiatives for Informal Sector- Public
1. National Social Assistance Programmes (1995)
2. Central Welfare Funds
3. Public Distribution System
4. Varishta Pension Bima (2003)
5. Janshree Bima Yojana (2000)
6. Universal Health Insurance Scheme (UHIS), 2004
7. National Rural Employment Guarantee Scheme, 2005

10. Initiatives for Informal Sector- Private
- Civil Society organisations (NGO) and Cooperatives
- Coverage about 5 million
- Not more than 2-3% of the total workforce in the informal
sector
- Mostly self contributory
- Predominantly health-related and maternity risk coverage
through insurance companies

11. Important Private Initiatives
1. SEWA-Women working in informal sector employment-
Healthcare and insurance benefits
2. Co-operative Development Foundation-life insurance
3. NIDAN- life insurance
4. YESHASVINI- medical benefits
5. SPARC- medical and disability benefits for slum dwellers
6. ASSEFA – life insurance
7. ACCORD- life, health and property insurance
8. SIFFS –health and life insurance

12. Constraints & Strategic Issues
• Multiplicity of Statutes and implementing agencies
• Overlapping of benefits
• Absence of urgency and priority
• Inadequacy of provisioning
• Inefficient existing delivery systems
• Fiscal crunch

13. Recommendations
Policy and Specific

14. Policy Recommendations
• National Social Security Policy
• Establishment of National Social Security Authority
• Reducing Multiplicity of Social Security Agencies and
Overlapping of Programme Benefits

15. Category-wise distribution of the workforce
‘CATEGORY ONE’- 10%
- People who are working in the formal sector and are availing the
benefits of statutory social insurance schemes
‘CATEGORY TWO’- 30%
- People who are living below poverty line and include old age,
widows, orphans and persons with disability
‘CATEGORY THREE’- 60%
- People who are economically active and working in informal, self-employment
and small business sector

16. For Category One
Reforms in existing social security programmes regarding-
• Reduction in threshold criteria
• Creating synergy between various social security
institutions
• Capacity Building

17. For Category Two
• Reforms in social assistance programmes
• Cost effective social assistance
• Streamline and simplify the eligibility criteria
• Civil society organisations to be associated in creating
awareness and in the process of identification and
registration of beneficiaries
• Linking up of social assistance programmes with other
anti-poverty programmes
• Convergence and synergy of programmes and
implementing agencies

18. For Category Three
- Workers including self-employed persons are willing and
capable to subscribe to special insurance schemes if they
feel that they will get value for money
- Employment security, health care, and pension are the
three main concerns of workers- Studies
- Social insurance schemes- specific to the needs and paying
capacity
- Convenience of access and transaction, and trustworthiness
of the implementing agency are the crucial factors

19. Contributory National Pension Scheme for
‘Category Three’
- Amount of contribution should be flexible
- Programmes should be implemented by a public agency
- Member/subscribers should be provided a permanent
account number in which the contribution will be
deposited
- There should be a built in provision of family pension and
disablement pension through a component of insurance

20. Contributory National Pension Scheme for
‘Category Three’
- Government can subsidise the administrative cost of the
programme
- Government may institute a mechanism to provide
assurance of a minimum return on the accumulations
- Convenience of access through network of public sector
banks and post offices for collection of contribution and
payment of benefits
- NGOs need to be involved creating awareness, enrolling
subscribers, facilitating filing of benefit applications and
redressing grievances.
Thanks!