Practice Question – What is ‘social security’? Examine recent security measures adopted by the Government in India. [UPSC 2019]
Approach – Introduction, Define Social Security, List and analyse the security measures adored by government, Outline the scope for improvement, Conclusion.
The International Labour Organization (ILO) defines Social Security as “the security that society furnishes through appropriate organization against certain risks to which its members are perennially exposed. These risks are essentially contingencies against which an individual of small means cannot effectively provide by his own ability or foresight alone or even in private combination with his fellows. The mechanics of social security therefore consists in counteracting the blind injustice of nature and economic activities by rational planned justice with a touch of benevolence to temper it.” This definition of ILO clears and centers on provision of support to an individual or to his/her family to protecting them falling into contingent poverty which is that the individual is not otherwise poor but for the contingency.
NEED FOR SOCIAL SECURITY
The purpose of any social security measure is to give individuals and families the confidence that their level of living and quality of life will not erode by social or economic eventuality;
provide medical care and income security against the consequences of defined contingencies; facilitate the victims physical and vocational rehabilitation; prevent or reduce ill health and accidents in the occupations; protect against unemployment by maintenance and promotion of job creation and provide benefit for the maintenance of any children.
The contingencies of social security as delineated by ILO are medical care, sickness benefit, unemployment benefit, old age benefit, employment injury benefit, family benefit, maternity benefit, invalidity benefit and survivors benefit.
THE ILO CONVENTION ON SOCIAL SECURITY 1952
· Medical Care: This should cover pregnancy, confinement and its consequences and any disease which may lead to a morbid condition. The need for pre-natal and post-natal care, in addition to hospitalization was emphasized.
· Sickness Benefit: This should cover incapacity to work following morbid condition resulting in a loss of earnings. This calls for periodical payments based on the convention specification.
· Unemployment Benefit: This should cover the loss of earning during a worker’s unemployment period when he is capable and available for work, but remains unemployed because of lack of suitable employment.
· Old age Benefit: This benefit provides for the payment – the quantum depending upon an individual’s working capacity during the period before retirement.
· Employment Injury Benefit : This should cover the following contingencies resulting from accident or disease during employment :
(a) Morbid condition;
(b) Inability of work following a morbid condition, leading to suspension of earnings;
(c) Total or partial loss of earning capacity which may become permanent; and
(d) Death of the breadwinner in the family, as a result of which the family is deprived of financial support.
· Family Benefit: This should cover responsibility for the maintenance of children during the entire period of a contingency.
· Maternity Benefit: This benefit should cover pregnancy, confinement and their consequences resulting in the suspension of earnings. Provision should be for medical care, including pre-natal confinement, post-natal care and hospitalization if necessary.
· Invalidism Benefit: This benefit, in the form of periodical payments should cover the needs of workers who suffer from any disability arising out of sickness or accident and who ware unable to engage in any gainful activity.
· Survivors’ Benefit: This should cover periodical payments to a family following the death of its breadwinner and should continue during the entire period of contingency.
The ILO has suggested various methods of organizing, establishing and financing various social security schemes. For the benefit of the less developed countries, it has fixed the level of benefits fairly low, so that the schemes may be practicable.
SOCIAL SECURITY SYSTEM IN INDIA
Generally, India’s social security schemes cover the following types of social insurances:
- Health Insurance and Medical Benefit;
- Disability Benefit;
- Maternity Benefit; and
The Code on Social Security 2020
The Code of Social Security, 2020 – one of the four new labor codes introduced by the Ministry of Labor and Employment – comes into force, it will subsume the following enactments:
- The Employees’ Compensation Act, 1923;
- The Employees’ State Insurance Act, 1948;
- The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952;
- The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959;
- The Maternity Benefit Act, 1961;
- The Payment of Gratuity Act, 1972;
- The Cine- Workers Welfare Fund Act, 1981;
- The Building and Other Construction Workers Welfare Cess Act, 1996; and
- The Unorganised Workers’ Social Security Act, 2008
Pension or Employees’ Provident Fund
The Employees’ Provident Fund Organization (EPFO), under the Ministry of Labor and Employment, ensures superannuation pension and family pension in case of death during service. Presently, only about 35 million out of a labor force of 400 million have access to formal social security in the form of old-age income protection in India. Out of these 35 million, 26 million workers are members of the Employees’ Provident Fund Organization, which comprises private sector workers, civil servants, military personnel, and employees of State Public Sector Undertakings (PSUs).
The EPFO allocates a Universal Account Number (UAN) for all employees covered under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The UAN is linked to the employee’s EPF account and will remain portable throughout the lifetime of an employee. This means that there is no need to transfer an EPF account at the time of changing jobs.
Health Insurance and Medical Benefit
India has a national health service, but this does not include free medical care for the whole population. The Employees’ State Insurance (ESI) Act, 1948 created a fund to provide medical care to employees and their families, as well as cash benefits during sickness and maternity, and monthly payments in case of death or disablement for those working in factories and establishments with 10 or more employees. (As on March 31, 2017, the total number of ESI beneficiaries were 123.7 million.) Coverage under the ESI scheme has extended to hotels, shops, cinemas and preview theaters, restaurants, newspaper establishments, and road-motor transport undertakings. The scheme has also been extended to private educational and medical institutions that have employed 10 or more employee. This is applicable in certain states and union territories only.
The Employee’s Compensation Act, 1923, formerly known as the ‘Workmen’s Compensation Act, 1923’, requires the employer to pay compensation to employees or their families in cases of employment related injuries that result in death or disability.
The Maternity Benefit (Amendment) Act, 2017 came into force on April 1, 2017, and increases some of the key benefits mandated under the previous Maternity Benefit Act of 1961. The amended law provides women in the organized sector with paid maternity leave of 26 weeks, up from 12 weeks, for the first two children. For the third child, the maternity leave entitled will be 12 weeks. India now has the third most maternity leave in the world, following Canada (50 weeks) and Norway (44 weeks).
The most serious lacuna in the social security network in India is the almost total absence of social security measures for the unorganized sector workforce. As far as organized sector
workers are concerned, the government has enacted various social security legislations like the Maternity Benefit Act, Employees State Insurance, Workers Compensation Act and other miscellaneous provisions. For the unorganized sector workers who form nearly 92 per cent (NCL, 2002) of the total labour force, there is a virtual absence of social security protection and only recently have some attempts been made to study this problem.