India is perhaps the
only major democratic country which doesn't have a stated minimum social security cover for its
citizens. This is despite the fact that alongwith fast economic growth, the
country is also witnessing an increase in economic insecurity and
vulnerability, resulting mainly from the growing economic disparities and the
breakdown of the traditional joint family system and a supportive
socio-cultural-moral structure. In the
days of yore when economy moved slowly (and the state wasn't the over-lord of all that it could get into), family members, relatives and the community at large used to
furnish an umbrella of shared social responsibility for those facing bad times.
But in an age when GDP is the God, it
is perhaps too much to expect that feelings like sympathy, pity, sense of
responsibility and care won’t get monetized too.
The False Start
Given the record of indifference that successive governments have shown
to the cause of social security, many of us would be surprised to learn that
India was the first Asian country to start Social Security program for its
citizens though for a small section only. The Employees' Compensation Act,
which was enacted in 1923, was the first legislation to provide payment of
compensation to the workman or his/her family in cases of employment related
injuries resulting in death or disability. Immediately after independence, the government came up with The
Employees’ State Insurance Act, 1948 which was aimed at providing medical services, continuing cash benefits
due to employment injury or death, cash sickness benefits during periods of
wage loss, and cash maternity benefits to around 2.5 million factory workers
throughout the country. Another major legislation was The
Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 which aimed
to promote savings for old age as well as ensure terminal benefits,
superannuation pension, and family pension in case of death during service. But
after this promising start, things bogged down (as they usually do in our
country), and today India spends just 1.4 % of its GDP on providing
social security cover (to only a small percentage of its population) which is
among the lowest in Asia, far lower than what China, Sri Lanka, or even Nepal spend.
Even though the constitution describes the country, inter alia, as a socialist republic, the successive left leaning governments didn't make any effort to follow the erstwhile countries of the socialist system which were committed to providing comprehensive social security to their citizens even at low levels of economic growth. Nor was there any question of following the capitalist countries where social security is the primary instrument of public policy aimed at maintaining the living standards of all citizens absorbing over half the total government expenditure, and in most cases more than 20% of GDP.
Social security in the Constitution
Social Security is listed in the
Concurrent List (List III in the Seventh Schedule of the Constitution of
India). The following social security issues are mentioned:
Item23:
Social Security and insurance, employment and unemployment.
Item24: Welfare
of Labour including conditions of work, provident funds, employers’ liability,
workmen’s compensation, invalidity and old age pension and maternity
benefits.
Social
Security also finds mention under the directive principles of state policy. Article
41 of the Constitution asks the state to “within the limits of its economic
capacity and development make effective provision for securing the right to
work, to education and to public assistance in cases of unemployment, old age,
sickness and disablement, and in other cases of undeserved want”. Similarly,
Article 42 enjoins the state to “make provision for securing just and humane
conditions of work and for maternity relief”.
Government of
India’s vision about social security is summed up in the following quotes from
the Ministry of Labour website:
1. Social Security is a comprehensive
approach designed to prevent deprivation, assure the individual of a basic
minimum income for himself and his dependents and to protect the individual
from any uncertainties.
2. The State bears the primary
responsibility for developing appropriate system for providing protection and
assistance to its workforce.
3. Social Security is increasingly
viewed as an integral part of the development process. It helps to create
a more positive attitude to the challenge of globalization and the consequent
structural and technological changes.
It is hardly a surprise to see that the vision is yet to be converted
into reality. Citizens have little choice in the matter since these issues find
mention in the Directive Principles which make them unenforceable, and in the
Concurrent List, which turns these issues into shared responsibilities between
the Central government and the State governments (effectively making these
nobody’s responsibility). Also, it is a matter of priorities that any state
sets for itself and India presumably has other priorities.
The Conceptual Basis of Social Security
International Labour
Organisation (ILO) explains social security in the following way,
“The expression has acquired a wider interpretation in some countries than in
others but basically it can be taken to mean the protection which society
provides for its members, through a series of public measures, against the
economic distress that otherwise would be caused by the stoppage or substantial
reduction in earnings resulting from sickness, maternity, employment injury,
unemployment, invalidity, old age and death; the provision of medical care, and
the provisions of subsidies for families with children.”
This definition is based on the experiences of the developed
countries and implicitly assumes that most citizens are generally employed with
enough earning to meet their basic needs. In most of developing countries, this
view is unjustified. The general view is that this definition focuses on
contingencies rather than deficiencies, and therefore, it is inadequate and too
narrow for the reality facing developing countries.
According to Jean Dreze and Amartya Sen, “The basic idea of
social security is to use social means to prevent deprivation and vulnerability
to deprivation”. In their view, income is one of the most visible and crucial
factors restricting the basic capabilities of citizens in developing countries.
Therefore, social security has to address both deprivation as well as
vulnerability to deprivation. As a further elaboration of the concept, they
distinguish between two distinct aspects of social security, viz., protection and promotion. “The former is concerned with the task of preventing a
decline in the living standards as might occur, in say, an economic recession,
or most drastically a famine. The latter refers to the enhancement of general
standards and to the expansion of basic capabilities of the population, and
will primarily have to be seen as a long term challenge”.
When Social Security Meets the Indian Reality
It is indeed
paradoxical that in a country where three quarters of the population is
estimated to be poor (as per UN definition with less than $2 a day earning)
having nothing to fall back upon in case of accident or misfortune, most of the
social security measures are aimed at only a small and relatively well off
fraction of population. Many of us would remember
the ridiculous debate about the poverty line estimated by Tendulkar committee
(30% of population earning upto Rs. 32 in urban areas and Rs. 26 in rural
areas). The crucial question that remained unaddressed during the debate was
how these people protect themselves against old age, illness, droughts,
famines, accidents, deaths, and floods which are regular happenings in their
lives. Some of them do get benefitted by the govt. funded pension schemes for
senior citizens and widows, but the amount of monthly pension is pitifully low
(less than Rs. 1000 p.m. in most cases) and prone to usual leakages.
Even the job-linked social
security schemes are not available for everyone in the country. The National Commission
for Enterprises in the Unorganized Sector (NCEUS) set up in 2004 to look into
livelihood conditions and social security for unorganized workers, found that
it is only those working in the organized or formal sector, (around six per
cent of India’s workforce as per NSSO survey 2004-05), who enjoy social
security, with nearly 94 % (433 million) working in the unorganized sector
enjoyed almost no social security cover at all. The Commission also found that
there had been almost no growth in formal employment since 1991 (static around
26 million) and the entire growth in employment was in the unorganized sector
(from 287 million to 433 million). Another finding of NCEUS that 79 percent of
workers in the unorganized sector had an income of less than rupees twenty a
day (in 2004), clearly shows the downside of the
liberalization-globalization-privatization processes. The NCEUS proposed
legislation for a national minimum security package for unorganized sector
workers, social insurance, social assistance for life and health cover, old age
benefits to all workers within a period of five years financed by the Centre
and state governments, employers (where identifiable) and workers at a cost of
less than 0.5 percent of Gross Domestic Product after five years. As can be
surmised, the UPA government discarded the Commission’s recommendations for
statutory backing to social security. NCEUS had proposed for setting up of
National and State Social Security Advisory Boards but only 14 States set these
up.
So far, the NDA
government too has not yet indicated any support to the idea of legally guaranteed social protection for
all though it is proposing to issue a smart card--U-WIN (Unorganized Sector
Identification Number), to every worker in the unorganized sector with a unique
identification number for accessing social schemes. But what the associated
benefits will be and what their legal status is going to be is not yet certain.
Pioneers of the Cost-less Social Security
The
NDA government has recently launched three social
security schemes with much fanfare-- Pradhan
Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana
(PMSBY) and Atal Pension
Yojana (APY), and going by the structure
of the schemes, this new government can be
called the pioneers of unfunded social
security that costs the government exchequer nothing. And yet, the government had no qualms in naming these schemes after the PM.
The Pradhan Mantri
Jeevan Jyoti Bima Yojana (PMJJBY), will offer a renewable one-year life cover (covering death due to
any reason) of Rs.2 lakh to all savings bank account holders in the age
group of 18-50 years for an annual premium ofRs.330. The Pradhan Mantri
Suraksha Bima Yojana (PMSBY) will offer a renewable one-year accidental death-cum-disability
cover of Rs.2 lakh for partial/permanent disability to all savings bank
account holders in the age group of 18-70 years for a premium of Rs.12 per
annum. The Atal Pension Yojana (APY) will focus on the unorganized sector and
provide subscribers (who shouldn’t be Income Tax payees) a fixed minimum
pension of Rs.1,000, Rs.2,000, Rs.3,000, Rs.4,000 or Rs.5,000 per month from the age of 60 years, depending
on the contribution option exercised (on entry at an age between 18 and 40
years).
The critics have rightly criticized the schemes as old wine in new
bottle and have expressed skepticism about the success of these schemes. Given
that nearly 1/3rd of the 15 million savings accounts opened under
Jan Dhan scheme don’t have any credit balance, it is perhaps highly optimistic
to expect those earning less than Rs. 100 a day to pay a premium of Rs. 330 for
(PMJJBY) or start subscribing to APY. Over and above these affordability issues
are the massive barriers put up by the IAS led Indian Bureaucratic System (IBS). Newspapers are full of reports that many people
had to pay sums ranging from Rs. 100 to Rs. 500 just for opening accounts under
the Jan Dhan Yojana or for even getting Aadhar Cards.
PM Modi, while launching the three schemes in Kolkata on May 9th
, 2015, said, “The poor do not want sahara. We need to change how we think. The poor need shakti”. These are noble thoughts indeed
but highly detached from reality. The poor may not want sahara but whether they want insurance and pension or not or can even
afford these, given their more urgent needs, wants and demands, is a crucial
question that is yet to be tested. Wouldn’t it have been better if the
government had combined PMJJBY and PMSBY into one, and provided budgetary
support for the entire amount of the premium? Even if the entire adult
population were covered, the cost would have been in the region of Rs. 15000
cr, certainly a manageable figure for a $ 2 trillion economy. If, instead of
handing over the project to insurance companies, the government decides to run
the insurance schemes by itself, the costs can further come down.
Yet it can’t be denied that it is the first time in India
that the government has come up with a framework for protection against vulnerabilities that is available for everyone
at costs which are not very high. However, the record-sheet of this government
regarding promotional action against
deprivation and vulnerabilities is blank as yet. It has drastically reduced
allotments for MNREGA and several other similar schemes aimed at enhancing
living standards and capabilities by providing employment, nutrition, education
and medical support, citing wastefulness and leakage. Statistics support the
view that after the “aggressive espousal of costly welfare programs”
such as MNREGA by the then government from 2011, the tempo of poverty reduction
decelerated compared to the period
2005-2011 when reform process was going on, and therefore there is some
merit in what the government is doing. But the government has yet to come up
with alternative long-term solutions for poverty reduction that can satisfy its
critics. Mere talk of Make in India is not going to provide jobs or earnings to
the vast population of the country.
Conclusion
The oft-repeated
excuse of the inability of the Indian state to
meet the fiscal requirements for expanding social security coverage is no more
acceptable. Nor can the government wash its hands from providing budgetary
support for social security to the vast population suffering from deprivation
and vulnerabilities. They have to set their priorities in sync with the guiding principle of Antyodaya and
bring back the last man in the queue
as the focal point of their policies. The new government has already spent one
year in office and it is high time that it comes up with new thinking on how to
provide a rights based-social security framework to all citizens. They have raised the expectations of
the voters and they are not going to be satisfied with numerical or positioning juggleries
anymore.
Published in Current Affairs Survey July 2015
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