In a report on the state of social protection globally, the UN’s International Labour Organization said that over half of all people in the world have no social protections.
GS-II: Social Justice (Issues related to Poverty, Government Interventions and Policies, Issues arising out of the design and implementation of Government Policies)
Dimensions of the Article:
- What is Social Security?
- UN on Social Protection coverage in the world
- On low coverage of Social Security
- What is the ‘Unorganised Sector’ in India? Unorganised workers and social security
- Social Security Code, 2021 in India
What is Social Security?
- Social security is “any government system that provides monetary assistance to people with an inadequate or no income”.
- It refers to the action programs of an organization intended:
- to promote the welfare of the population through assistance measures guaranteeing access to sufficient resources for food and shelter and
- to promote health and well-being for the population at large and potentially vulnerable segments such as children, the elderly, the sick and the unemployed.
- Social protection includes access to health care and income security measures related especially to old age, unemployment, sickness, disability, work injury, maternity or the loss of the main breadwinner in a family, as well as extra support for families with children.
- Services providing social security are often called social services.
UN on Social Protection coverage in the world
- Way back, in 2017 itself, according the World Social Protection Report 2017: Universal social protection to achieve the Sustainable Development Goals, only 45 per cent of the global population is effectively covered by at least one social benefit, while the remaining 55 per cent– 4 billion people – are left unprotected.
- Also, in 2017 – Only 29 per cent of the global population enjoys access to comprehensive social security – a small increase compared to 27 per cent in 2014-2015.
- In 2017, only 35 per cent of children worldwide enjoy effective access to social protection. Almost two thirds of children globally – 1.3 billion children – are not covered, most of them living in Africa and Asia. On average, just 1.1 per cent of GDP is spent on child and family benefits for children aged 0-14, pointing to significant underinvestment in children.
- The UN’s International Labour Organization (ILO) in its report on the state of social protection said that only 46.9% of the global population benefitted from at least one form of social security/protection.
- The report said that 4.1 billion people (Around 55%) were living without any social safety net of any kind. (NO significant improvement since 2017).
- This poor coverage of Social Security comes even after the pandemic spurred countries to offer more services to their populations.
- Also, access to healthcare, sickness and unemployment benefits have more than ever proved their relevance during the pandemic – and yet the coverage of social security hasn’t improved much.
On low coverage of Social Security
- The lack of social protection leaves people vulnerable to ill-health, poverty, inequality and social exclusion throughout their lifecycle. Denying this human right to 4 billion people worldwide is a significant obstacle to economic and social development.
- While many countries have come a long way in strengthening their social protection systems, major efforts are still necessary to ensure that the right to social protection becomes a reality for all.
- It is important to note that universal social protection contributes to eradicating poverty, reducing inequality, promoting economic growth and social justice, as well as achieving the Sustainable Development Goals (SDGs).
What is the ‘Unorganised Sector’ in India? Unorganised workers and social security
- Unorganised sector is a sector which is generally not governed by the rules and regulations that are laid down by the Government regarding the condition of employment.
- The term unorganised sector when used in the Indian contexts defined by National Commission for Enterprises in the Unorganised Sector, in their Report on Conditions of Work and Promotion of Livelihoods in the Unorganised Sector as “… consisting of all unincorporated private enterprises owned by individuals or households engaged in the sale or production of goods and services operated on a proprietary or partnership basis and with less than ten total workers.”
- The Characteristic features of Unorganised sector are:
- Jobs in the unorganised sector are very low paid.
- No paid leaves, provident fund, holidays and medical benefits are given to the employees.
- Job security is absent as in the case of no work, the employee may be asked to leave at any time.
- It is the employer who decides the rules and regulations of work.
Why Labour code on Social Security and Welfare is needed?
- Almost 90% of the current workers are not covered under any social security.
- The current thresholds for wage and number of workers employed for a labour law to be applicable creates tenacious incentives for the employers to avoid joining the system which results in exclusions and distortions in the labour market.
Social Security Code, 2021 in India
- The Code on Social Security Bill, 2020 replaced nine social security laws, including Maternity Benefit Act, Employees’ Provident Fund Act, Employees’ Pension Scheme, Employees’ Compensation Act, among others.
- The code universalizes social security coverage to those working in the unorganised sector, such as migrant workers, gig workers and platform workers.
- Definition of employee and categorization of workers covers all kinds of employment including part-time workers, casual workers, fixed term workers, piece rate/ commission rated workers, informal workers, home-based workers, domestic workers and seasonal workers.
- For the first time, provisions of social security will also be extended to agricultural workers also.
- A proper percentage-based structure for contribution, vis-à-vis socio economic category and minimum notified wage, has been put in place under the Code.
- It introduces new approaches to ensure a transparent and fair financial set up, such as:
- Time bound preparation of Accounts within six months of the end of the financial year;
- Provision for social audit of social security schemes by State Boards after every five years;
- Accounts of Intermediate Agencies to be subject to CAG Audit on the same lines as that of Social Security Organizations.
- Wage Ceiling and Income Threshold: The term ‘wage ceiling’ is for the purpose of determining a maximum limit on contribution payable; whereas the term ‘income threshold’ is for the purpose of enabling the government to provide for two different kind of schemes (for same purpose) for two different class of workers.
- Contribution Augmentation Funds would be established through which governments could contribute to the social security in respect of workers who are unable to pay contribution.
- National Stabilization Fund will be used for harmonizing the Scheme Funds across the country and will be managed by the Central Boards.
-Source: The Hindu