By Prarthana Mitra
In the months leading to Lok Sabha polls, close to 50 crore workers will be beneficiaries of a comprehensive social security cover over the next ten years. A phased disbursement was among the decisions taken at the meeting on Tuesday, to launch the scheme during peak campaign season, without further delay.
According to the new legislation drafted by the labour ministry on Monday, the centre announced it would go forward with the much-awaited social security code after dropping contentious clauses that had made its implementation debatable.
Fears of derailment
Fearing that certain proposals in the draft legislation could incite controversies and delay the reform process, the ministry decided to roll out a nationwide mandatory social security scheme before the general elections next May. Issues like the dilution of Employees’ Provident Fund Organisation (EFPO) and Employees’ State Insurance Corporation (ESIC) have been shelved for later.
Calling for the first tripartite stakeholder consultation on Tuesday, official sources claimed that the revised draft focuses mainly on the social security scheme envisaged by the centre. The initial comprehensive legislation promised retirement, health, old-age, disability, unemployment and maternity benefits to 50 crore unorganised workers, under the supervision of state social security boards replacing the EPFO and ESIC.
What is labour code on social security?
Workers will be getting the bare minimum, in the first phase, which includes health security and retirement benefits for all. Unemployment benefits would be added in the second phase while the third phase will see other welfare measures added to the code.
Workers are currently eligible for benefits including pensions, Employee State Insurance (ESI), Employee Provident Fund (EPF), gratuity, maternity benefit and perks under Employee Compensation Act and Unorganised Workers Social Security Act. These acts will be subsumed by the new scheme.
Trade unions have reportedly welcomed the move they believe is in the interest of workers across the country.
How will it be implemented?
The plan is to implement the scheme in three phases over a 10 year period. The new code also places a lot of power on the state governments to make it more enforceable.
The beneficiaries are to be classified into four tiers with the government financing security for those below the poverty line, who comprise the first tier. Their economic status renders them incapable of contributing to their security, which entitles them to centrally allocated tax-based schemes.
Workers in the unorganised sector, who have some contributory power but cannot be self-sufficient, will be covered under subsidised schemes in the second tier. The third tier will include those who can afford to contribute to the schemes, either by themselves or along with their employer. The fourth tier will comprise comparatively affluent people who can provide for meeting contingencies or risks on their own.
Prarthana Mitra is a staff writer at Qrius