How effective are social security and welfare in India?

January 26, 2015 07:52 am | Updated 09:36 am IST

In recent years, the government has moved forward to providing nutrition and employment support with a legal guarantee through the MGNREGA. Photo: V. V. Krishnan

In recent years, the government has moved forward to providing nutrition and employment support with a legal guarantee through the MGNREGA. Photo: V. V. Krishnan

India’s growth story of the last two decades has had one recurring theme: that the pattern of economic growth is accentuating insecurities. Yet, there continues to be a deep divide over whether the gains from growth ought to be ploughed back to achieve social security for everyone. Social security has come to be linked to job benefits, tying it to one’s status as a worker in the formal or the informal economy when, fundamentally, it originates from the notion of ensuring everyone protection against vulnerability and deprivation.

In the Constitution, Article 41 of Directive Principles 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.” Article 42 says the state shall make provisions for securing just and humane conditions of work and for maternity benefits.

India does not yet explicitly recognise a national minimum social security cover. In recent years, including with an intervention by the Supreme Court in the Right to Food case, the government has moved forward to providing nutrition and employment support with a legal guarantee through the MGNREGA.

Economists Amartya Sen and Jean Dreze distinguish two aspects of social security —“protection” and “promotion.” While the former denotes protection against a fall in living standards and living conditions through ill health, accidents, the latter focuses on enhanced living conditions, helping everyone overcome persistent capabilities deprivation.

A close look at India’s record in providing social security shows that while only a fraction of citizens enjoy any “protection” at all, these are being further eroded with the current pattern of economic growth. In provisions aimed at “promotion,” social security through nutrition, work entitlements for all, recent evidence gives reasons for cheer, but even these are being threatened with fund cuts and further shrinking.

In 2011, in an affidavit to the Supreme Court on the official poverty line, the Planning Commission estimated that based on the Tendulkar Committee report 30 pe rcent of the population live below the official poverty line. Several debates followed on how the poverty line ought to be defined. But what has remained absent from both public discourse and laws is a more crucial question: how do these 35 crore people survive on Rs. 32 per person per day in urban areas and Rs. 26 per person per day in rural areas? What do they do in contingencies of illness, old age, and death, and how do they protect themselves from slipping into further poverty?

The government launched the first pensions programme for the poor, the National Social Assistance Programme, starting with of a pension of Rs. 75 per month, in 1995. Under the Indira Gandhi Old Age Pension Scheme and Widow Pension Scheme, the Central government contributes Rs. 200 and Rs. 300 per month respectively. Several States, Himachal Pradesh, Rajasthan, and Bihar provide between Rs. 400-300 per month, while Tamil Nadu provides Rs. 1000 per month.

There is evidence that the scheme is reaching its intended beneficiaries. The Public Evaluation of Entitlement Programmes (PEEP) survey in 2013 by researchers at the Indian Institute of Technology, Delhi, recorded that among nearly 900 rural respondents selected at random from the official pension lists in 10 States, 97 per cent were getting their pension and recorded only one case of “duplicate” pension i.e. one elderly person getting two pensions. Majority of beneficiaries, 76 percent, however, said they received pensions in their post office and bank accounts after delays of over a month. While the amounts are small, they are crucial in supplementing the elderly’s resources to allow them to afford medicines, food, and other necessities.

A universal social security The biggest gap, and one which may only widen, is in social protection for the working poor. The UPA government appointed the National Commission for Enterprises in the Unorganised Sector (NCEUS) in 2004 to look into livelihood conditions and social security for unorganised workers — employed in the unorganised sector and those in the formal sector without any social protection. It found that only those in the formal sector, 8 per cent of India’s workforce, enjoys social security. Over 91 percent of workers, over 39.5 crore workers, are in the informal sector.

The Commission highlighted that there had been almost no growth in formal employment since early 1990s and almost all growth in employment was in the unorganised sector. NCEUS’ finding that 79 percent of workers in the unorganised sector lived on an income of less than Rs. 20 a day made it evident that the gains of growth were bypassing the majority of the working population.

The NCEUS proposed legislation for a national minimum security package for unorganised 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.

The UPA discarded the Commission’s recommendations for statutory backing to social protection. “The NCEUS suggested a National Fund for this and a notional Rs. 1,500 crore was set up. It proposed that National and State Social Security Advisory Boards were to be created but only 14 States set these up,” says a senior government official.

India spends 1.4 percent of its GDP on social protection, among the lowest in Asia, far lower than China, Sri Lanka, Thailand, and even Nepal. The NDA government has not yet indicated any support to the idea of legally guaranteed social protection for all workers. Officials say the government is proposing to issue a smart card, “U-WIN,” Unorganised Sector Identification Number, to every worker in the unorganised sector with a unique identification number for accessing social schemes. What these benefits will be, and what their legal guarantee is still up in the air.

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