India in ambitious plan to extend social security

India in ambitious plan to extend social security
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First Published: Fri, May 25 2007. 01 50 PM IST
Updated: Fri, May 25 2007. 01 50 PM IST
New Delhi: India has unveiled an ambitious plan to provide old-age and health protection to the country’s estimated 370 million casual workers for the first time, officials said on 25 May.
“It is revolutionary scheme, a key programme... aimed at taking care of the most vulnerable sections of the unorganised sector workers,” cabinet spokesman and Information Minister Priya Ranjan Dasmushi told reporters.
Workers in India’s formal sector already pay contributions for pensions and health insurance -- but they make up a mere seven percent of the country’s workforce.
The new legislation, approved by the cabinet late on 24 May and subject to parliamentary approval, aims at extending those benefits to around 370 million people who work in sectors such as agriculture, construction, weaving and fishing.
“There is also a section of people who are self-employed. They too are not covered by any social security programmes,” a labour ministry official said.
The proposed scheme involves workers being given personal “smart cards” and having to pay the equivalent of one rupee a day at local registration centres, officials said.
The government said the “Unorganised Sector Worker’s Social Security Bill,” a pledge of Prime Minister Manmohan Singh after his election in 2004 on a pro-poor ticket, will be presented to parliament in July.
The cabinet spokesman gave no details on how much the scheme would cost the country, and only said the financial burden would be shared between the state and federal governments -- with the latter shouldering the bulk of it.
The labour ministry official said India’s federal budget already included a commitment to spend an initial sum of 10 billion rupees (245 million dollars) for a life insurance scheme for workers in the unorganised sector.
“This is an initial pledge. As the scheme takes shape after parliament gives approval, more money will be allocated for different programmes in a phased manner,” the official said.
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First Published: Fri, May 25 2007. 01 50 PM IST
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