A Collage Of Laws That Leaves The Worker Out In The Cold

Context: Highlighting the dire state of social security condition in India being aggravated by pandemic and the gaps in Social Security Code 2020.

Impact of the pandemic on informal workers: It has rendered low-paid, informal workers, who constitute 91% of the workforce, totally hapless, pushing them further into poverty.

About Social Security Code (SS code) 2020: To cater to the woes of absence of social security in the informal sector, the Parliament introduced SS code merging existing social security laws and attempts to include informal workers within the ambit of social security administration.

Gaps in the Social Security Code 2020

• Neglect of free basic curative health care: Health Budget for FY 2021-22 is just over 1% of GDP, which is actually lower if the cost of vaccination is kept aside.
• Non-universalisation of basic social security norms:
  • Maternity benefits: Maternity benefit is applicable for establishments employing 10 workers or more and the definition of ‘Establishment’ in the proposed Code did not include unorganised sector.
  • Employees Provident Fund Scheme: Will remain applicable, as before, to every establishment in which 20 or more employees are employed and thus informal workers can access EPF.
  • Payment of gratuity: Gratuity payable to eligible employees by every shop or establishment in which 10 or more employees are employed.
    • Although payment of gratuity was expanded in the new Code, it still remains inaccessible for a vast majority of informal workers.
• Technical barriers:
  • Registration is a prerequisite for universal coverage: To avail social security, an informal worker must register on specified online portal to be developed by central government.
    • Similar provision already exists in Unorganised Workers’ Social Security Act, 2008 yet large number of informal workers are outside the ambit of any social security since.
  • Other issues: Lack of awareness among informal workers, lack digital literacy and connectivity and difficulties in furnishing all documentary papers.
• Jurisdictional and Institutional overlapping: Without a defined basic structure, implications of the Code would be too varied across States and institutions to be administered.
  • Most informal workers are footloose casual workers (26%) and self-employed (46%) and they move from one place to another in search of livelihoods.
  • Thus, furnishing proof of livelihood and income details in the absence of tangible employer-employee relations becomes very difficult.
• Unaddressed financial constraints: The Code limits itself to recommending state to design schemes for informal workers as and when it deems fit, without addressing financial constraints.

Conclusion: The Code has lost an opportunity as it could be used to formalise the workforce to a certain extent. In the end, this Code remains a collage of existing pieces of legislation without that interweaving thread of integration.

• At a time when India chairs a BRICS meeting in Delhi that is focused on issues of labour, especially informality, it is necessary to recognise that India is ageing without social security, and the demographic dividend of the young workforce that could support the ageing ends in 15 years.