Approximately 85% of India‘s 460 million strong labour force are categorised as ‗unorganised sector‘ workers. Defined broadly, unorganised sector workers are those who do not have contracted employment with a formal sector employer and are engaged as home-based, selfemployed or wage workers. As the National Commission for Enterprises in the Unorganised Sector (NCEUS) argues, the unorganised sector workforce does not enjoy three types of social protection – employment security (no protection against arbitrary dismissal), work security (no protection against accident and health risks at the workplace) and social security (health benefits, pensions, and maternity benefits). In the spirit of extending social security to the unorganised sector and keeping in mind long term demographic trends which indicate a rapidly ageing population and a non-declining unorganised sector workforce, the Government of India passed the landmark Unorganised Workers‘ Social Security Act (UWSSA) in 2008. The purpose of the Act was to provide India‘s large unorganised sector workforce with a minimum level of social protection that would enable them to endure income and health related shocks, stay out of poverty, and ultimately allow them to lead dignified lives.
The passage of the UWSSA has tied in with the introduction of several publicly provided, national and state level social security schemes in the insurance and pension sectors.
The proposed Comprehensive Social Security (CSS) Scheme should aim, at minimum, to provide financial protection against the most critical risks confronting the well-being of households and individuals – the risks of death, health shocks and income security in old age. While other risk management products can be added on to the CSS over time, this report focuses its recommendations on three predominant schemes at the national level:
- Rashtriya Swasthya Bima Yojana (RSBY), a national health insurance scheme largely for the below poverty line population.
- Aam Aadmi Bima Yojana (AABY), a life insurance scheme also largely for the below poverty line population.
- National Pension Scheme – Swavalamban (NPS-S), a pension scheme specifically for the unorganised sector workforce.
These schemes represent an important step forward in India‘s ability to provide adequate, reliable, and affordable social protection options for its vulnerable population, but they still suffer from considerable weaknesses. These weaknesses can be broadly attributed to the effectiveness of institutional design and the design of product-level features of these schemes. The report makes specific recommendations on each of these dimensions in order to ensure universal coverage for beneficiaries under well-designed schemes with a uniform authentication mechanism and a single window architecture for access and use.
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