The government’s recent launch of three social security schemes has once again turned the spotlight on the lack of state protection for most Indian citizens. The three schemes—the Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jeevan Jyoti Yojana and Atal Pension Yojana—seek to provide accidental death risk cover, contributory pension and natural and accidental death risk cover. These are, perhaps, the first steps towards what finance minister Arun Jaitley described in his budget speech as a system of universal social security for all Indians.

Since the schemes require subscription, the amount of government spending will be known only much later. However, the programmes seem to underline a growing recognition that India needs to do a lot more to provide a safety net to its citizens.

These are overdue moves. India is almost a global outlier when it comes to spending on social protection.

As a proportion of its gross domestic product (GDP), India spends less than many poorer African countries on social protection. Worse, such allocation has been declining in recent years.

The ambit of social protection is quite broad, and may mean different things to different people. At the minimum, effective social protection helps address vulnerabilities citizens face. For instance, when they are old, or when they are facing a health shock, or when a key earning member of a household dies. In terms of both pension and insurance coverage, India’s record so far has been dismal compared with other emerging markets.

The International Labour Organization’s World Social Protection Report 2014-15 shows less than a fourth of India’s population above the statutory pensionable age receive any kind of pension. India is in the lowest bracket of countries on this count, according to the global agency’s classification.

India also has a low insurance penetration compared with other emerging markets. According to data from the Insurance Regulatory and Development Authority of India, life insurance density in India increased from 9.1 in 2001 to 55.7 in 2010 and has come down to 41 in 2013.

The trend in health insurance coverage is similar. The number of people with a health cover has fallen 15% between 2010-11 and 2013-14 to 216 million. “Over the last four years, the number of persons covered under health insurance has seen moderate decline mainly due to decrease in number of persons covered under government health insurance schemes," the insurance regulator said in its latest annual report.

As an earlier Plain Facts column pointed out, the lack of reliable public health services and the absence of health insurance compel the poor to spend heavily on private medical care.

Data from the World Bank shows the share of out-of-pocket expenditure in total health spending in India is among the highest in the world.

The high out-of-pocket health expenditure hampers India’s efforts to reduce poverty since sudden health shocks force people into destitution. According to a 2011 research paper by Soumitra Ghosh of Tata Institute of Social Sciences, health shocks added 4.4 percentage points to India’s poverty headcount ratio in 2004-05. In other words, 47 million people fell below the poverty line because they had to spend heavily on medical costs.

The new schemes launched by the government are a redesigned version of earlier social security schemes, said Ravi Srivastava, a professor of economics at the Jawaharlal Nehru University, and former member of the National Commission of Enterprises in the Unorganised Sector (2006-09). Although the government has made a slight increase in its contribution commitments, many structural issues regarding the relationship between the government, banks and insurance companies have not been addressed so far, said Srivastava.

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