Home >Politics >Policy >Draft social security code a good step but lacks specifics, clarity

As soon as he switches off one of the two numbers on his dual sim smartphone, Ajay Kumar’s employer changes—and he does so four times a day, depending on which locality he is in.

Kumar, who works as a driver with taxi aggregators, says he drives for 14 to 16 hours a day, but does not make the kind of money that people think he is earning.

“They call us business partners not drivers. People think we are earning a lot of money. But I and my family know we are barely managing our needs," he said, showing screenshots of a ride where the client paid 332 to the aggregator, but he was paid only 168.

“I don’t have a holiday, life insurance, wage security, time for my family or myself. For the first couple of years it was fun, but it’s not a sustainable working model," Kumar said in Hindi, adding that this is where he expects the government and companies to support him and others like him, who are earning a livelihood, but do not know whether they are employees, business partners or micro-entrepreneurs, and whether this mode of livelihood can be sustained.

The draft social security code now up for public discussion is aimed at addressing the insecurities of people like Kumar. It seeks to rationalize complexities and compliance issues of related laws by merging them.

But what it lacks is clarity.

It talks about social security, but does not specify how universal social security will be achieved. It talks about insurance, provident fund and other benefits for gig workers, but fails to clarify who is responsible for providing them—the state or the new-age entrepreneurs who are promoting platform economy for lakhs of people.

The draft code says: “Central government shall formulate and notify, from time to time, suitable welfare schemes for unorganized workers on matters relating to life and disability cover; health and maternity benefits; old age protection; and any other benefit as may be determined by the central government."

It also says that state governments may formulate and notify suitable initiatives, including schemes relating to provident fund, employment injury benefit, housing, educational schemes for children, old age and funeral assistance.

Besides, the government may formulate social security schemes “for gig workers and platform workers" and such schemes would encompass issues like life and disability cover, health and maternity benefits, old-age protection and “any other benefit as may be determined by the central government".

In India, gig economy players, including e-commerce firms, micro entrepreneurs and delivery services, are offering direct employment to at least three million people, says Abhiraj Bhal, co-founder, Urban Clap, a self-employment technology platform.

Bhal says by 2025, this number is likely to go up to 10 million—25-30 million if indirect employment is taken into account. “Recent data from CMIE shows that India’s unemployment rate is over 7%, which means if the entire labour market has 700 million people, we have 49 million who are unemployed, plus a net addition of 12 million people to the workforce every year. If we extrapolate these numbers, then by 2025, we have to create around 100 million jobs, and here the platform economy can help in creating 25-30% of the requirements directly or indirectly," he added.

“By bringing in new regulations and increasing compliance, the government can kill the gig economy. One has to understand that these are flexibility platforms and by killing flexibility, you kill the essence of the gig economy."

The bulk of India’s labour force does not enjoy social security benefits. Any attempt to universalize social security is forward-looking, but many proposed initiatives in the draft code have been left to the states to decide. The code is silent on whether it can merge all social security schemes such as ABS, RSBY, NPS, employees provident fund scheme, and employees state insurance, to create one social security scheme for both informal and formal workers.

A.K. Padmanbhan, vice-president, Centre for Indian Trade Unions, says social security is a necessity for all workers, but the present draft is still very tentative and does not specify whether there will be wage security, life insurance, medical facility for all or not. “The use of ‘may’ in most policy prescriptions makes it vague. I can assure that the final draft of the code will be an industry security code than a social and wage security policy for the working community," adds Padmanabhan.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Edit Profile
My ReadsRedeem a Gift CardLogout