UPA government going populist
After NREGA, it’s Social Security for
Unorganised Workers

Despite the scepticism of neo-liberals in the Congress, the government is expected to enact a bill that would provide a safety net to unorganised workers and provide each of them with a smart, portable identity card.

By Paranjoy Guha Thakurta

Faced with a stunning electoral defeat in Gujarat, the Congress party led UPA government is all set to go populist with a vengeance. After its decision to expand the coverage of the National Rural Employment Guarantee Act from 330 districts to the entire country following a demand to this effect by Rahul Gandhi after he was anointed Congress general secretary, the government is likely to enact the Unorganised Sector Workers’ Social Security Bill during the forthcoming Budget session of Parliament. The bill was presented in the Rajya Sabha on September 10 this year.
One of the most significant proposals in the bill is to provide each and every unorganized worker in the country with a ‘smart’ identity card that would have a ‘portable’ identification number enabling it to be used for a variety of purposes. Thus, a domestic help or a worker at a construction site with no permanent address would be able to use such a card to obtain social security benefits. Just as the NREGA has been touted as the largest social security scheme anywhere and the only act of its kind that legally mandates employment to a rural family for 100 days in a year, the bill to provide social security to unorganized workers is also said to be unique in the world and one that would greatly benefit the poor in cities as well as in villages.

Despite the scepticism of sections within the ruling dispensation about the efficacy of the proposed new law that aims at providing various social security benefits to unorganized workers who comprise 94 per cent of the total workforce in the country, the chances of the bill being enacted are bright for a number of important reasons. After Gujarat, the ‘left’ within the Congress and the UPA wants the government to reiterate its commitment to upholding the interests of the aam aadmi.
Even within the neo-liberal section in the Congress, there is a view that the government needs to demonstrate its belief in reforms with a human face. Prime Minister Manmohan Singh has himself stated on many occasions that economic growth has to be inclusive and that the fruits of economic liberalisation would be denied to the underprivileged sections of Indian society without a social safety net. In addition, the Communists are extremely keen than this law comes through. At this juncture, therefore, it would be difficult for those ideologically opposed to the bill to resist the call for solidarity among secular forces who support the bill being enacted.

As for those in the BJP and the NDA, it would be difficult for them to openly oppose the broad objectives of the bill even if there are doubts galore about specific provisions and the modalities of implementation. In addition, since the success of the proposed law depends crucially on how states enforce its provisions, there could be a number of state governments, including those ruled by the BJP or its allies in the NDA, which would wonder how funds would be raised for the social security schemes.

The Standing Committee on Labour, headed by CPI MP from Nalgonda, Andhra Pradesh, Suravaram Sudhakar Reddy, submitted its report to Parliament on December 3. Reddy argues that the changes proposed in the bill have the approval of not just all members of the committee – that completed its work ahead of schedule unlike many standing committees – cutting across ideological lines but also representatives of trade unions of all political hues as well as employers affiliated to apex chambers of commerce and industry associations.

The bill as well as the Standing Committee has drawn heavily from three reports presented by a panel headed by Dr Arjun Sengupta, Chairman of the National Commission for Enterprises in the Unorganized Sector (NCEUS). Incidentally, Sengupta is not merely a former diplomat and member of the committee. He is an ‘independent’ member of the Rajya Sabha who was nominated by the Congress and supported by the Left. He is perceived by many to be belonging to that section in the Congress that is hardly enamoured of the market-oriented economic policies favoured by the Prime Minister, by Finance Minister P Chidambaram and by the Deputy Chairman of the Planning Commission Montek Singh Ahluwalia.

One of the main points of contention about the bill is the huge amount of money that would have to be spent by the Union government alone if the social security schemes are to be implemented in a phased manner over a three year period, as has been proposed by the Standing Committee. The amount involved is in the region of Rs 20,000 crore per year. While some believe that the bill bites off muchmore than can be chewed and that the schemes proposed are over-ambitious, supporters of the bill claim that the money that is to be spent is not that much – 0.5 per cent of the country’s gross domestic product – considering the fact that unorganized workers contribute around 40 per cent to India’s GDP.

Large numbers of unorganised workers are currently in agriculture and in construction. These workers have no social security at all, barring the health insurance scheme of the Life Insurance Corporation that was formally announced by the government on October 2. In certain states, such as Andhra Pradesh and Maharashtra, there are some social security schemes for unorganized workers making beedis, those working in films and those engaged in fishing and handloom weaving. The Standing Committee has proposed that such schemes be universalised across the country.
Some of the social security schemes proposed relate to life and disability cover, health and maternity benefits and old age protection including pension and provident fund. An unorganised worker has been defined to mean a home-based, self-employed or wage earning worker and includes those working in the organized sector who are not protected by existing social security laws. A home-based worker has been defined as a person engaged in production in his/her home and an unorganized sector enterprise has been defined as one with less than ten workers. In the case of unorganized workers in farming, the size of the landholding has to be less than two hectares.

The most salient feature of the proposed law is that an unorganized worker would be eligible for benefits if he/she is duly registered and every registered worker would be issued a smart card carrying a unique, portable identification number. This scheme alone, it is argued, has far-reaching consequences as the new identity card could eventually replace a host of other forms of identification used by people in the country, including ration cards, below poverty line (BPL) cards, job cards used for schemes under the NREGA, electoral photo identity cards and permanent account number (PAN) cards issued by the income tax department.

The Standing Committee hopes state governments would formulate schemes for unorganized workers on employment injury benefit, housing, children’s education, skill upgradation, funeral assistance, old age homes and even, marriage of daughters. It is clearly unrealistic to expect that most of these schemes would get implemented in a hurry. Nevertheless, the supporters of the bill argue that this is as good a time as any to make a beginning. Reddy says trade union representatives would, in fact, be disappointed that the bill is not doing enough to secure the lives of unorganized workers.

It remains to be seen as to how soon the bill becomes law. Thereafter, the Union government would have to create a National Social Security and Welfare Fund with a substantial corpus to ensure that Rs 20,000 crore gets spent annually after a period of three years. Opposition to the grandiose social security scheme from right-wing economic commentators and sections of employers is to be expected. But do not be surprised if the proposed social security law – and not the nuclear agreement with the United States – gets expeditiously operationalized. 2008 could be the year when the 15th general elections take place ahead of schedule. And elections mean many promises for the poor.