Universalising Social Protection in India: Issues and Challenges by Professor Alakh N. Sharma Director, Institute for Human Development New Delhi Institute for Human Development NIDM Building, 3 rd Floor, IP Estate Mahatma Gandhi Marg New Delhi 110002
1. Concerns and Need for Social Protection (SP) Fast economic growth has not created enough good jobs in India to absorb unemployed and expanding labour force. On the other hand, with around 92% informal workforce and high level of poverty (around 30% as per official estimates), vulnerability is very high (close to 70% poor and vulnerable as per 2 PPP per capita per day). Further informalisation and flexibilisation of the workforce in the wake of globalisation. As a whole, only about one-tenth of the workforce have Social Protection.
II. Scope of Social Protection Defined in wider sense covering both absolute deprivation and contingencies Promotional vs. Protective (contingent) Measures Both important in India because of - high incidence of poverty, vulnerability & informality - As a whole high level of livelihood insecurity India has relied more on promotional measures so far (mainly social assistance) Protective measures mainly available to formal sector workers (8% of the workforce) 92% informal workers hardly covered (only 6% in 2005)
III. Promotional SP Measures Large numbers of promotional measures initiated since 1970s Food and nutrition programmes Public Distribution System (TDPS) Mid-day Meals Integrated Child Development Scheme (ICDS) Housing Programme (IAY) Self eployment programmes Swarna Jayanti Grameen Swarojgar Yojana (SGSY) Self Help Groups Prime Minister Employment Generation Programme (PMEGP) Swarna Jayanti Shahri Rojgar Yojana (SJSRY) Wage employment programmes Several programmes initiated since 1970s Now all merged into MGNREGS Two most important promotional programmes at present: PDS MGNREGS
IV. Targeted PDS It is a price instrument to help consumers and achieve food security at household level PDS supplies commodities at below market prices. It was universal till 1997. In 1997 targeted PDS started population were divided into BPL (below poverty line), Antyodaya (destitutes), and APL (above poverty line). Total Number of families as per Planning Commission (BPL+APL+AAY) (180 million) 35 kgs. per month per family The operation involves huge subsidy; out of total subsidy for TPDS, 20% for APL, 45% for BPL and 35% for Antodaya
Targeted PDS Contd. Four major problems : - High inclusion and exclusion errors - Non-viability of fair price shops - Not fulfilling price stabilization objectives - High leakages (in foodgrains distrubution) Some advocate reverting back to universal Several measures by some state governments being taken for improvement (food stamps, etc.); some improvements noticed.
TDPS Contd. Right to Food Govt. has promised to enact National Food Security Law, likely to be tabled in Parliament soon. 75% of the rural and 50% of the urban areas will be entitled to subsidised foodgrains (5 kg of rice, wheat or coarse cereals at Rs. 3, 2 and 1 per kg. a month per person). Current food subsidiary bill of around Rs. 90,000 billion expected to go up to Rs. 11,500,00 million after implementation of the Act. There are several policy and operational level issues such as population to be covered, targeting, costs, etc. Issue being widely debated. Civil Society argues for Comprehensive Food entitlement Act - universal PDS, providing 35 kgs of grain per family
V. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) The most important wage employment programme is National Rural Employment Guarantee Act (NREGA), now called MGNREGA. It has completed five years. Objective: To enhance livelihood security in rural areas by providing at least 100 days of guaranteed wage employment to every household (one-third beneficiaries to be women). Considered to be the largest ever public employment programme visualised in human history. In the year 2011-12 Rs. 400 billion were allocated (only Rs. 210 billion could be spent).
MGNREGA contd The performance is uneven Relatively successful in states like Rajasthan, Andhra Pradesh, Madhya Pradesh and Chattisgarh. The problems and challenges in some states are: - Implementation and administrative problems (fudging of muster rolls, corruption, delays in wage payment, weakness of implementing machinery, shortage of staff, etc.) - Asset creation much less than expected. - lack of professionals at panchayat level.
MGNREGA contd Most evaluations - official and non-official - show that implementation has been more effective than any of its predecessor schemes. In particular, the leakages have been reduced significantly in many places. Significant rise in agricultural and rural wages. The success of course is by no means uniform. Need of drastic reforms in the programme linking with asset creation, bridging the gap in implementation, linking with skill development etc.
VI. Protective Measures for Social Protection A number of protective social protection measures adopted dating back to pre-independence days, largely aimed at organised sector workers. Important legislations were : Employee State Insurance Act; Employees Provident Funds and Miscellaneous Provisions Act, 1952; the Maternity Benefit Act, 1961; The Payment of Gratuity Act, 1972; and the Workers Compensation Act, 1936. All these largely confined to organised sector workers. Till recently contingent social security schemes for informal workers by the Central Government very few in number and limited in coverage.
VII. Social Protection for Informal Workers Informal workers (around 92%) suffer from two sets of problems: (a) Capability Deprivation; (b) Adversity; no fallback mechanism to meet contingencies such as ill health, accident, death and old age. To some extent, promotional measures have helped in enhancing capabilities and livelihoods. But hardly any protective measure till recently. Welfare Boards, for specific occupational groups (such as cine, beedi workers etc.) Boards set up by both state and central governments; Kerala and Tamil Nadu are the leading states As a whole only 6% workers were covered till 2005
VIII. Unorganised Sector Social Security Act (USSSA) 2008 A major milestone first attempt to address SP needs of informal workers Covers both self-employed and wage workers Provides for formulation of schemes by central government on life and disability, health and maternity benefits, old age protection etc. Also provides for formulation of schemes relating to PF, employment injury benefits, housing, educational schemes for children, skill upgradation, old age homes, etc. by state governments. Setting up of National Social Society Board and Workers Facilitation Centers
USSSA Contd Schemes included in the Act - Indira Gandhi NOAPS - National Family Benefit Scheme - Janam Suraksha Yojana (Mother s Protection Scheme) - Handloom weavers comprehensive scheme - Pension to Master Craft men - National Scheme for welfare of fishermen - Janashree Bima Yojana (Life Insurance for common people) - Rashtriya Swasthya Bima Yojana (RSBY) (National Health Insurance Scheme) Steps being taken to include more schemes NOAPS and RSBY most important
IX. Old Age Pensions In India, the share of old age population is likely to increase by 75% (around 12.5% of the population) by 2026. National Old Age Pension scheme (NOAPS) introduced in 1995. An amount of Rs.200 per month is paid to persons above 65 years of age belonging to BPL population. No. of beneficiaries increased from 6.7 million in 2002-03 to 22.7 million in October 2012. Renamed as Indira Gandhi NOAPS since 2009; two more pensions schemes for widows and disabled introduced. Several State Governments have added to the pension of Rs.200 per month. Scheme has performed well and there is huge demand for it. But major problems low coverage, targeting problem and meagre amount.
X. Rastriya Swasthya Bima Yojana (RSBY) All poor workers and their families being covered; several categories of unorganised sector workers also covered. Scheme funded by central and state governments: 75:25 ratio Provides cashless insurance cover upto Rs. 30,000 per month (hospitalisation benefit) Migrant workers to be covered through smart card. All pre-existing diseases are covered. Covers more than 34 million families and has emerged as one of the largest health insurance scheme globally has provided financial support to 5.2 million hospitalisation cases since inception. Problems: Coverage and targeting (BPL); low amount which is not sufficient to take care of catastrophic cases.
XI. Looking Beyond : Towards Universal Social Minimum USSSA is an important step. But major limitation - eligibility not employment status, but criterion of being poor. SP needs for informal workers is now in centre of policy debate. Wider demand for extending and gradually universalizing SP for critical protective needs of informal workers (eg sickness, old age as well as provision of minimum income) Targetted schemes have not worked efficiently due to both exclusion and inclusion errors Need of providing Universal National Social Minimum such as income and health needs and old age pension. It should be portable so as to take care of workers such as migrants. With the help of UID and other necessary measures (banks etc.), this can be directly transferred to beneficiaries with small transaction costs. Widely felt that at this stage of India s development, the country can afford to have a minimum level of social protection. Apart from social justice, it will contribute to accelerating growth as well.
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