Social Security System in India

7/25/2019 Social Security System in India

http://slidepdf.com/reader/full/social-security-system-in-india 1/43

I

Labour Market Trends inIndia



Labour Force, Workforce andLabour Force, Workforce and

Unemployed (UPSS)Unemployed (UPSS)



II

Social Security in India!ack"round

i l i idi



State Market Member#based

$r"anisation

Pri%ate&ouse'olds

Instruments Social insurance,social assistance,transfers,provident funds

Insurance policyor contract

Mutualarrangements,voluntary work

Gift exchange,state contingentloans,remittances,transfers

Mode ofoperation

Top-down Individualistic Mainly bottom-up ottom-up

Incentives !ule of law,regulations

Maximisation ofpro"t and#orutility, pricesignals and

$uantityad%ustment

alancedreciprocity, self-interest,voluntarism,

solidarity

social norms andvalues, altruisticbehaviour,charity, self-

interest

Sanctions &xclusion ofpeople fromprogrammes'withdrawal ofprogrammes

(evel ofpremium, limitsupply ofinsurance

Social pressure,exclusion fromthe organisation

Social pressure,inherent familycontract

)lassi"cation )entral' local *ro"t oriented"rms' private

+*s'cooperatives'

amily' kinship'neighbourhood

Social Security providingoc a ecur ty prov ngorganisationsorganisations



Social Security in IndiaSocial Security in India

It is the sum of all governmentregulations and provisions that aim at.// en'ancin" t'e peoples li%in"conditions, includinglegislation#acts#laws, regulation, andplanning in the "elds of old age, wage,unemployment, and social exclusion,sickness and health care, and// income security measures suchas food security, employment,education and health, housing, socialinsurance, and social assistance0



Social Security. !ole of the StateSocial Security. !ole of the State

In the Indian context, the State bearst'e primary responsibility forde%elopin" appropriate systemsfor pro%idin" social protection

and assistance to its orkforce0 The matters relating to Social

Security are listed in the *irecti%e

Principles of State Policy and thesub%ects in the +oncurrent List ofthe )onstitution of India0



Indian +onstitution SocialIndian +onstitution Social

SecuritySecurity

+oncurrent List 1(ist III in theSeventh Schedule of the )onstitution ofIndia2

- Item -o. /0. Social Security andinsurance, employment andunemployment0

- Item -o. /1. 3elfare of labourincluding conditions of work, providentfunds, employers4 liability, workmen4scompensation, invalidity and old age

pension and maternity bene"ts0



Indian )onstitution 5 SocialIndian )onstitution 5 Social

SecuritySecurity

Part I2 *irecti%e Principles ofState Policy

- 3rticle 14. !ight to work, to education and to

public assistance in certain cases

The State shall, within the limits of its economiccapacity and development, make e6ective provisionfor securing the right to work, to education and topublic assistance in cases of unemployment, old age,sickness and disablement, and in other cases of

undeserved want0

3rticle 1/. *rovision for %ust and humane

conditions of work and maternity relief

The State shall make provision for securing %ust and

humane conditions of work and for maternity relief0



Social Security in India. 7 *olicy verviewSocial Security in India. 7 *olicy verview 7 critical part of the public policy and its development agenda0

Since independence 189:;2, India extended social protection

measures to orkers in t'e or"anised sectors 1almost 9<=of industries were state owned shortly after independence20

or workers in unorganised sector, the emphasis was on

promotional measures through special programmes and lateron through social assistance pro"rammes.

Post 4554 economic reforms paved the way for a beginningof debate, formulation, and visioning of viable social securityprogrammes in India0

>arious e6orts of the Government of India, in recent years, suchas

◦ designing of new right based social security schemes,

◦ recasting of earlier schemes,

◦ introduction of innovative methods towards e6ective identi"cation andenrolment of bene"ciaries, and

◦ enactment of a comprehensive legislations for social protection ofunorgani?ed sector workers



III

Types of Social SecurityPro"rammes in India



Types of social security programs Types of social security programs

in Indiain India

)ontributory Schemes

3elfare Schemes

Social 7ssistance*romotional Social Security



)ontributory Schemes)ontributory Schemes

Generally statutory, administered bythe governments 1except insuranceschemes20

7ccident insurance, medical facilities,old age pension, gratuity, providentfund, maternity bene"ts, incomesecurity, and unemploymentallowance0

Many of these are operated by boardsat the state level0



3elfare schemes3elfare schemes

The central government imposes acess on employers for workersengaged in, for example, lime-

stone, dolomite, iron ore,manganese, chrome, and micamines, the beedi industry, and the

"lm making and the theatreindustry0



Social 7ssistanceSocial 7ssistance

)entrally sponsored schemes like

the +ational Social 7ssistance

*rogramme with its threecomponents of old age pensionscheme, national family bene"t

scheme, and national maternitybene"t scheme0



*romotional Schemes*romotional Schemes

+ationwide programmes such as thepublic distribution system, theIntegrated )hild @evelopment

*rogramme, the Mid @ay Mealprogramme in primary schools, thesupplementary +utrition *rogrammes,the rural employment programmes

1+ational !ural (ivelihood Mission2,Mahatma Gandhi +ational !ural&mployment Guarantee Scheme0



India4s Social Security System. 7nIndia4s Social Security System. 7n

verviewverview

EPFOSchemes

Civil ServiceSchemes

Public SectorEnterprises(Usually DBSchemes)

Schemes forUnorganie! Sector

" # O s $ F a m

i l y $ a n ! C o m m u n i t y

% e l f a r e B o ! i e s

S t a t e & s s i s t a n c e S c h e m e s

" a t i o n a l & s s i s t a n c e S c h e m e s

P e n s i o n p r o ! u c t s o f ' i f e ( n s u r a n c e C o m p a n i e s

' o c a l B o ! i e s

S t a t e # o v e r n m e n t

C e n t r a l # o v e r n m e n t

E D ' (

E P S ) D B

E P F ) D C

S m a l l s a v i n g s s c h e m e s

India’s Social Security System

" C P S ) D B

# P F ) D C

# S

# S

# S

" C P S ) D B

" C P S ) D B

# P F ) D C

# P F ) D C

*oluntary +a,&!vantage!Schemes

OccupationalPensionSchemes(tra!itionallyDB butsignificant shift

to DC)

# r o u p ( n s u r a n c e



Legends:

DB Defined Benefit

DC Defined Contribution

EDLI Employees’ Deposit Linked Insurance SchemeEP Employees’ Pro!ident und

EPS Employees’ Pension Scheme

"P "o!ernment Pro!ident und

"S "ratuity Scheme

#CPS #e$ Ci!il ser!ice Pension Scheme

#"% #on&"o!ernment %rgani'ations

India4s Social Security System. 7nIndia4s Social Security System. 7n

verviewverview



2

Social Security in $r"anisedSector



Social Security. rganisedSocial Security. rganised

SectorSector In India, the or"ani6ed sector, which accounts

for about A percent of the total workforce,bene"t from a fair minimum standard of socialsecurity0

The principal social security laws enacted inIndia for organised sector workforce are.&mployees State Insurance 7ct, 89:B,&mployees *rovident unds 5 Miscellaneous

*rovisions 7ct, 89CD,&mployees )ompensation 7ct, 89DE,Maternity ene"ts 7ct, 89A8 and

*ayment of Gratuity 7ct,89;D0 These legislations provide social security

bene"ts like medical facilities, employmentin%ury# maternity bene"ts, insurance, pensionand gratuity etc to industrial and factory

workers0

mp oyees a e nsurancemp oyees a e nsurance



mp oyees a e nsurancemp oyees a e nsuranceSchemeScheme&mployees State Insurance 7ct, 89:B

7im

◦ medical care services 1medical care is alsoprovided to families of the insured persons2 and

◦ cash bene"ts0

)overage◦ 7pplies to factories employing 8< or more persons0

◦ &mployees of factories and establishments coveredunder the 7ct drawing monthly wages upto!s08C,<<<#- per month0

◦ &xtended to provide health care to workers in theunorganised sector 1eedi workers, cine workers 5non-coal mine workers20

◦ 7s on E8st March D<88, the scheme applied to <0::million employers employing 80CC crore insured

persons at ;9< centres0



&mployees State Insurance&mployees State Insurance

SchemeScheme)ontribution

◦ &mployers - :0;C percent of wages of the covered

employees0

◦ &mployees- 80;C percent of their wages0

7gency

◦ State governments except for @elhi, +oida and Model

Fospitals wherein &SI) is directly providing medicalservices0

@elivery. Medical )are

◦ service 1direct2 system- 8:A hospitals' :D annexes'8:<D dispensaries and 9E ISM nits

◦ panel 1indirect2 system- 8::; panel doctors0

@elivery. )ash bene"ts

◦ +etwork of A8< ranch Hces 5 8B; *ay Hcesrelated Sickness, *ermanent @isablement 5 @eath

bene"ts0

7mployees Pro%ident Fund7mployees Pro%ident Fund



7mployees Pro%ident Fund7mployees Pro%ident Fund

$r"anisation$r"anisation&mployees *rovident unds 5 Miscellaneous

*rovisions 7ct, 89CD 1w0e0f0 8:th March, 89CD20

7im.

◦ To provide social and economic security toindustrial and other workers covered under the7ct and their dependants in case of their

premature death0)overage.

◦ &very establishment speci"ed in the schedule-I tothe 7ct and employin" /8 or more persons0

Three schemes under the 7ct.◦ &mployees4 *rovident und Scheme, 89CD

◦ &mployees4 *ension Scheme, 899C and

◦ &mployees4 @eposit linked Insurance Scheme,

89;A



7mployees Pro%ident Fund Sc'eme,459/

)ame into force from 8st +ovember, 89CD0

7im

◦ inancial security for the employees in an establishment byproviding a system of compulsory savings0

ene"ts

◦ &mployees *rovident und Scheme takes care of followingneeds of the members.

(i)!etirement (ii)Medical )are (iii)Fousing (i%) amilyobligation

(%) &ducation of )hildren (%i) inancing of Insurance *olices

)overage

◦ 8BD speci"ed industries#classes of establishments0

◦ A,8C,9<D establishments 5 factories with a membership ofC<0B million as on E8st March, D<8<0

)ontribution7s per amendment-dated DDnd September, 899; in the 7ct, boththe employees and employer contribute to the fund at the rateof 8D= of the basic wages, dearness allowance and retaining

allowance, if any, payable to employees per month0



&mployees4 *ension&mployees4 *ension

Scheme, 899CScheme, 899C

)ame into force from 8Ath +ovember, 899C0

7im

◦ conceived as a ene"t de"ned Social Insurance Scheme

formulated following actuarial principles for ensuring long term"nancial sustenance0

)overage.

◦ all the new members of *rovident und and the existing

members who were contributing to the &mployees amily*ension Scheme-89;80

ene"ts.

◦ Member pension including disablement pension, widow pension,children pension, orphan pension, dependent parent pension,

nominee pension

)ontribution

◦ +o separate contribution

◦ @erives its "nancial resource by partial diversion from the*rovident und contribution, the rate being B0EE= of the wages

and the )entral Government contributes at the rate of 808A= on

wages at the end of the year0



&mployees4 @eposit linked Insurance&mployees4 @eposit linked Insurance

SchemeScheme)ame into force from 8st august, 89;A0

ene"t◦ n death while in service, *rovident und accumulations

plus an additional amount e$ual to the average balance

in the provident und account of the deceased duringthe preceding one year is paid to the family0

◦ Maximum amount of bene"t payable is !s0 8,E<, <<<0)overage

◦ 7ll employees who are members of the provident undin exempted as well as un-exempted establishments0

◦

A< million members across the country0)ontribution

◦ &mployees are not re$uired to pay any contribution0

◦ &mployers contribute to the insurance fund at the rateof <0C= of the pay of the members



&mployees )ompensation&mployees )ompensation

7ct, 89DE7ct, 89DE)ame into force from 8st Kuly, 89D:0

ene"ts◦ If personal in%ury is caused to a workman by

accident arising out of and in the course of hisemployment his employer shall be liable to paycompensation0

◦ )ompensation- !s0 8,D<,<<< in case of deathand !s0 8,:<,<<< in case of disablementresulting from in%ury0

◦ uneral expenses- !s0 C,<<<

◦ !eimbursement of the actual medicalexpenditure incurred by the employee fortreatment of in%uries caused during course of

employment without any ceiling0



Maternity ene"ts 7ct, 89A8Maternity ene"ts 7ct, 89A8)ame into force from 8Dth december,89A80

7im◦ !egulates the employment of women for

certain period before and after child-birth andprovides for maternity and certain other

bene"ts0)overage

◦ 7pplies to mines, factories, circus industry,plantations and shops or establishment

employing 8< or more persons including anysuch establishments belonging to Governmentexcept the employees who are covered under&mployees State Insurance 7ct, 89:B0

f G i 9 D



*ayment of Gratuity 7ct, 89;D*ayment of Gratuity 7ct, 89;D7im

◦ *ayment of gratuity to employees engaged in

factories, mines, oil "elds, plantations, ports, railwaycompanies, motor transport undertakings, shops ,educational institutions or other establishments0

◦ Gratuity is payable at the time of termination ofher#his service either 1i2 on superannuation or 1ii2 on

retirement or resignation or 1iii2 on death ordisablement due to accident or disease0

ene"ts

◦ &very employee, other than apprentice, irrespectiveof his wage is entitled to receive gratuity aftershe#he has rendered continuous service for "veyears or more0

◦ The ceiling on maximum amount of gratuity hasbeen raised from !s0 <0EC million to !s0 ne million

w0e0f0 D:th

May, D<8<0



2I

Social Security in Unor"anisedSector

S i l S i i dS i l S it U i d



Social Security Unor"anisedSocial Security Unor"anised

SectorSector

9:= of the Indian work force is in the unor"ani6ed sector0

The unorgani?ed sector is $uite'etero"eneous in terms of

types of workers who work in the sectorand

their geographical spread0

*roviding social security bene"ts in aphased manner to the vast workforcein the unorgani?ed sector and makingsustained e6orts in this direction0

S i l S it i dS i l S it i d



Social Security. norganisedSocial Security. norganised

SectorSector Three categories of social security

programmes for unorganised sectorworkers.

80 Social 7ssistance *rogrammes

ood-based transfer programmes

Income transfer programmes

)ash-transfer programmes

D0 Social Insurance Schemes andE0 3elfare unds



Social 7ssistance

*rogrammes

ood-based Transfer *rogrammes

◦ Mid @ay Meals Scheme 1899C2

◦ )ommunity Grain ank Scheme 1899A2

◦ Targeted *ublic @istribution System

1899;2◦ 7ntyodaya 7nna Scheme 1D<<<2



Social 7ssistance

*rogrammesIncome Transfer programmes.

◦ ood for 3ork *rogramme

◦ Kawahar !o?gar Lo%ana

◦ Sampoorna Gram Swaro?gar Lo%ana

◦ Kawahar Gram Samridhi Lo%ana

◦ &mployment 7ssurance Scheme

◦ *radhan Mantri Gram Sadak Lo%ana

◦ ood for 3ork *rogramme for )alamityFit States

◦ Ma'atma :and'i -ational ;ural7mployment :uarantee 3ct



Ma'atma :and'i -ational ;ural7mployment :uarantee 3ct, /889 )ame into force on Dnd ebruary, D<<A

7im. To enhance livelihood security of households in rural areas

of the country by providing at least one hundred days ofguaranteed wage employment in a "nancial year to every

household whose adult members volunteer to do unskilledmanual work0

irst ever law internationally that guarantees wage employment

at an unprecedented scale0 unding.

◦ )entral. the entire cost of wages of unskilled manual workers';C= of the cost of material, wages of skilled and semi-skilled

workers0

◦ State. DC= of the cost of material, wages of skilled and semi-

skilled workers' unemployment allowance0

)overage 1D<8<-882.

◦ ADA districts all over India

◦ 8D< million %ob cards issued

◦ CC million households provided employment' :9= share of women

in workforce

+as' Transfer -ational Social 3ssistance+as' Transfer -ational Social 3ssistance



+as' Transfer -ational Social 3ssistance+as' Transfer -ational Social 3ssistance

Pro"rammePro"ramme 7 agship welfare program of the Government of India initiated

on 8C 7ugust 899C0

The scheme is administered by the Ministry of !ural

@evelopment, Government of India although the bene"ciariescould hail from either urban or rural areas0 The scheme iscompletely sponsored by the )entral Government0

The +S7* is implemented in the States#Ts in accordance withthe general conditions applicable to all components of the+S7* as well as speci"c condition applicable to eachcomponent0

+S7* at present, comprises of

80 Indira Gandhi +ational ld 7ge *ension Scheme 1IG+7*S2,

D0 Indira Gandhi +ational 3idow *ension Scheme 1IG+3*S2,

E0 Indira Gandhi +ational @isability *ension Scheme 1IG+@*S2,:0 +ational amily ene"t Scheme 1+S2 and

C0 7nnapurna0

nder the union budget D<8D-D<8E raising the allocation underthe +ational Social 7ssistance *rogramme 1+S7*2 by E; per

cent from A,8CB crore in D<88-8D to B,::; crore in D<8D-8E0



-ational Social 3ssistance Pro"ramme-ational Social 3ssistance Pro"ramme i2 Indira Gandhi +ational ld 7ge *ension Scheme 1IG+7*S2. nder

the scheme, *( persons aged A< years or above are entitled to a

monthly pension of !s0 D<<#- up to ;9 years of age and !s0C<<#-thereafter' )overage. 8; million 1D<8<-882

ii2 Indira Gandhi +ational 3idow *ension Scheme 1IG+3*S2. *(widows aged :<-C9 years are entitled to a monthly pension of !s0D<<#-0

)overage. E0: million 1D<8<-882

iii2 Indira Gandhi +ational @isability *ension Scheme 1IG+@*S2. *(persons aged 8B-C9 years with severe and multiple disabilities areentitled to a monthly pension of !s0 D<<#-0

)overage. 80E million1D<8<-882

iv2 +ational amily ene"t Scheme 1+S2. nder the scheme a *(

household is entitled to lump sum amount of money on the death ofprimary breadwinner aged between 8B and A: years0 The amountof assistance is !s0 8<,<<<#-0 )overage. <0E million 1D<8<-882

v2 7nnapurna. nder the scheme, 8< kg of food grains per monthare provided free of cost to those senior citi?ens who, thougheligible, have remained uncovered under +7*S0 )overage. 8

million 1D<8<-882



Social Insurance SchemesSocial Insurance Schemes

Kanshree ima Lo%ana

7am 7dmi ima Lo%ana

;as'triya Sast'ya !ima <o=ana or -ational &ealt'Insurance Sc'eme

; 't i; 't i S t' !i < =S t' !i < =



;as'triya;as'triya Sast'ya !ima <o=ana orSast'ya !ima <o=ana or

-ational &ealt' Insurance Sc'eme-ational &ealt' Insurance Sc'eme )ame into force on 8st 7pril, D<<B

7im. to provide protection to *( households from "nancial liabilities

arising out of health shocks that involve hospitali?ation0

ene"ts. ene"ciaries under !SL are entitled to hospitali?ation

coverage up to !s0 E<,<<<#- per year for most of the diseases that re$uirehospitali?ation0

unding.

◦)entral. ;C=' State. DC='

◦ or +orth &astern States.- )entral. 9<=' State. 8<='

◦ Scheme bene"ciaries pay only !s0 E< as the registration fee0

)overage

◦ &xtends to "ve members of the *( family which includes the head ofhousehold, spouse and up to three dependents0

◦ /8.> million# 3cti%e Smart +ards distributed as on 8Dth 7pril, D<8D0

◦ 0.1 million# Total &ospitalisation +ases as on 8Dth 7pril, D<8D0

◦ &xtended to cover construction workers, +!&G7 bene"ciaries, streetvendors, beedi workers and domestic workers0

◦ urther extended to sanitation workers, ragpickers, mine workers,

rickshaw-pullers and autorickshaw and taxi drivers0

S i l S i T' ' + lS i l S it T' ' + t l



Social Security T'rou"' +entralSocial Security T'rou"' +entral

Welfare FundsWelfare Funds Separate (egislations have been enacted for settingup 9 Labour Welfare Funds to provide health

care, education, recreation, housing and watersupply to workers employed in certain non-coalmines, beedi industry and cine workers0

The "nances are raised by imposing cess on thecommercial activity of the target group0

◦ T'e Mica Mines Labour Welfare Fund 3ct,451?@

◦ T'e Limestone and *olomite Mines LabourWelfare Fund 3ct, 45A/@

◦ T'e Iron $re, Man"anese $re and +'rome$re Mines Labour Welfare Fund 3ct, 45A?@

◦ T'e !eedi Workers Welfare Fund 3ct, 45A?@and

◦

T'e +ine Workers Welfare Fund 3ct, 45>4.

;ecent Le"islati%e Inter%entions ;ecent Le"islati%e Inter%entions



;ecent Le"islati%e Inter%entions ;ecent Le"islati%e Inter%entions

Initiati%es on Social Security inInitiati%es on Social Security in

Unor"anised SectorUnor"anised Sector

The norganised 3orkers SocialSecurity 7ct, D<<B

+ational Skill @evelopment *olicy,

D<<B



2I

Social Security System inIndia +'allen"es



Social Security System in IndiaSocial Security System in India

+'allen"es+'allen"es

unding of social security measures' The unavailability of reliable data'

(ack of involvement of the people in

designing the packages of the diverseschemes'

7 poorly designed and executedhousehold targeting mechanism

(ack of coordination and overlap indelivery of programmes reducesaccountability of those responsible for

social security delivery0



TF7+N L

Documents

Social Security System in India