Ministry rejects smart card plan for unorganised workers

February 14, 2016 11:59 pm | Updated 11:59 pm IST - NEW DELHI:

The Labour Ministry had originally planned to give smart card directly to all the unorganised workers,

The Labour Ministry had originally planned to give smart card directly to all the unorganised workers,

The government’s plan to provide social security smart cards to workers in the unorganised sector has hit a roadblock for the second time with the Finance Ministry rejecting the latest Labour Ministry proposal to issue one card per family as an impractical idea.

The Unorganised Workers’ Identification Number (U-WIN) scheme, first mooted in September 2014, proposed to provide a smart card to the unorganised workers for entitled to benefits under various schemes such as Rashtriya Swasthya Bima Yojana (RSBY) and Aam Aadmi Bima Yojana (AABY) as well as the Atal Pension Yojana, Pradhan Mantri Suraksha Bima Yojana and Jeevan Jyoti Bima Yojana.

There are around 40 crore unorganised workers in the country, which accounts for around 89 per cent of the total workforce, as per government estimates. The portable smart card would have details of bank account, mobile numbers and benefits of social security schemes that can be availed by the workers.

The Labour Ministry had originally planned to give smart card directly to all the unorganised workers, but the Finance Ministry had raised objections on the huge costs that would entail.

Keeping those budget constraints in mind, the labour ministry re-drafted the proposal to allocate one smart card to the head of each family instead of all workers in a household. But the Finance Ministry hasn't approved of this idea either.

“The expenditure finance committee (which vets projects costing above Rs.500 crore) have flagged some design related issues in the proposal. The idea to give one smart card per family was not found feasible. We will send a revised proposal,” said a senior labour ministry official on condition of anonymity.

The Finance Ministry has asked for individual smart cards to the unorganised workers “irrespective of the cost implications,” the official added.

Earlier, the Labour Ministry proposed to issue around 19 crore smart cards to families at an estimated cost of around Rs.2,000 crore. Officials said the new proposal will shoot up the cost of issuing around 40 crore smart cards to around Rs.5,000 crore.

“The design, software and guidelines to issue individual smart cards are ready. We will send the revised proposal soon,” said the Labour Ministry official, adding the proposal will then be sent to the Union Cabinet for approval.

Apart from the Finance Ministry's reservations, the idea to issue smart cards to workers was also questioned by the Information Technology Ministry which had earlier written to the Labour Ministry on the issue. The IT ministry had said that issuing smart cards to unorganised workers may lead to duplication of work as the government is already in discussions to link welfare schemes with the Aadhar card. “Theoretically, it may look possible. However, it will not be possible to provide labour scheme benefits with Aadhar cards. We have already conveyed to the IT Ministry that there will be a lot of connectivity issues in doing that,” said another labour ministry official.

Documents reviewed by The Hindu showed the original proposal of the Labour Ministry had projected a total cost of Rs.15,000-Rs.20,000 crore in the UWIN card project. While Rs.6,000 crore was estimated to be spent on the smart cards, between Rs.7,000 crore and Rs.14,000 crore alone was estimated to be spent on setting up ‘Workers’ Facilitation Centres.

However, another senior Labour Ministry official denied these estimates.

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