India

February 22, 2007

The government is likely to introduce the Unorganised Workers’ Social Security Bill, 2007 during the Budget session of Parliament. It is also expected to flag off the pension scheme for 40 crore workers in the unorganised sector who constitute 93% of the country’s total workforce. This will be one of the major social sector initiatives by the UPA government in the next fiscal, along with further expansion of the National Rural Employment Guarantee programme.

However, there would be no subsidy from the finance ministry for launching the pension scheme, an official source told FE. The cost of providing social security benefits like pension and healthcare facilities to workers in the unorgansied sector is estimated to be around Rs 25,000 crore.

Prime Minister Manmohan Singh had, last month, emphasised the need for a comprehensive pension system for workers in the unorganised sector. “This large labour force functions without any options for their old age. At present, only 11% of the workforce is covered under some form of pension schemes.

Within the organised sector, the coverage is largely for government employees. Therefore, workers in the unorganised sector, constituting 90% of the workforce, need a comprehensive pension system, which they can subscribe to,” Singh had said.

Trade unions are also unhappy about the fact that the Bill, in its present form, simply lists the enabling provisions for the unorganised sector workers and has no specific details about implementation and modalities of payment.

They pointed out that although the Bill suggested setting up a national fund, there was no mention about the contribution to the fund.

Another difficulty was identification of the employer in the unorganised sector. The unorganised sector includes weavers, handloom workers, fishermen, toddy tappers, leather workers, plantation labour and beedi workers.

NEW MEASURES

• The pension scheme will be for the 40 crore workers in the unorganised sector who constitute 93% of the country’s total workforce

• The cost of providing social security benefits like pension and healthcare facilities to workers in this sector is around Rs 25,000 crore

• The sector includes weavers, handloom workers, fishermen and toddy tappers