ENHANCING SOCIAL SECURITY FOR UNORGANIZED WORKERS IN INDIA

ENHANCING SOCIAL SECURITY FOR UNORGANIZED WORKERS IN INDIA A PRESENTATION BY MR. P. C. CHATURVEDI SECRETARY, MINISTRY OF LABOUR AND EMPLOYMENT, GOVERNMENT OF INDIA 1

ECONOMIC GROWTH IN INDIA …Some Indicators Food Grains (Million Tonnes) 50 -51 90 -91 03 -04 08 -09 50. 8 176. 4 212. 2 233. 88 Finished Steel (Million Tonnes) 1 13. 53 36. 9 57. 16 Electricity Generation (Billion KWH) 5. 1 264. 3 565. 1 842. 5 Foreign Exchange Reserves ($ Billion) 1. 9 2. 2 107. 4 251. 98 Exports ($ Bn) 0. 15 8 73. 3 105. 15 Life Expectancy (years) 32. 1 58. 7 63. 5 65. 3 Literacy rate (% of population) 18. 3 52. 4 65. 4 66 2

OUR BELIEF Absence of a meaningful social security arrangement is not merely a problem for individual workers, it has wider ramifications in the economy and the society. From an economic point of view, it reduces workers’ ability to contribute meaningfully and efficiently. Low earning power, coupled with vulnerabilities, lead to poverty that also reduces aggregate demand. Socially, it leads to disaffection and dissatisfaction, especially when a small segment of the society is well endowed and seen as prospering. 3

We therefore believe in : Working towards inclusive growth wherein marginalized sections of the society can participate as well as benefit from development Providing social security to the entire workforce in the organized and unorganized sectors. 4

Workforce In India Total Population 1. 2 billion 470 million workforce in India Unorganised Sector 6% Oganised Sector More than 94% of workers are in the informal sector India's unorganized 94% sector is one of the largest in the postindustrial world 5

Major Needs of Unorganised Sector workers Employment Security Health Security Maternity Security Old Age Security 6

Major Initiatives From Go. I Employment Security through Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) Health and Maternity Security through Rashtriya Swasthya Bima Yojana (RSBY) 7

Financial Commitment Value (Rs. Million) (US $ Million) GDP NREGA RSBY % of GDP % of Budget 61, 641, 780 1340039 100. 0000 % 4 o 1, 000 8717 0. 65% 3. 6167% 3, 500 76. 9 0. 00571% 0. 0343% These two schemes reflect the political commitment and will and are making a big impact in the life of working poor 8

MGNREGA Mahatma Gandhi National Rural Employment Guarantee Act guarantees 100 days of wage-employment in a financial year to a rural household Primary Objective Supplement employment opportunities for rural households 9

MGNREGA Auxiliary Objective Regenerate natural resource base for sustainable rural livelihoods § Water conservation & water harvesting § Drought Proofing (afforestation & tree plantation) § Irrigation canals, micro & minor irrigation works § Works on individual land of weaker sections; Small & Marginal farmers § Renovation of traditional water bodies § Land development § Flood control & protection, drainage § Rural connectivity Process Outcomes üStrengthen grass root processes of democracy üInfuse transparency and accountability in governance 10

Progress under MGNREGA 2006 -07 2007 -08 2008 -09 2009 -10 Employment provided to Households (in Millions) Expenditure (in Billion US $) 21. 0 33. 9 45. 1 49. 0 1. 92 3. 44 5. 92 7. 19 11

MGNREGA: Positive Trends Increase in Agriculture Minimum Wages and wage earned per day and annual income. Bargaining power of labour has increased. Distress migration has reduced in many parts. Financial inclusion on an unprecedented scale : 69 Million Bank & Post Office accounts opened. 12

Positive Trends contd. “Green Jobs” created as 70% works relate to water conservation, water-harvesting, restoration, renovation and desilting of water bodies, drought-proofing, plantation & afforestation Productivity effects of MGNREGA reported Improvement in ground water Improved agricultural productivity & cropping intensity Livelihood diversification in rural areas 13

National Health Insurance Scheme (RSBY) Why Health Insurance? OUT OF POCKET (OOP) EXPENSES AND INDEBTEDNESS IN INDIA (Amount in $US) ALL INDIA POOREST 1. Average OOP Payments made per hospitalization in Govt. facilities 70 54 2. Average OOP Payments made per hospitalization in private facilities 158 115 3. %age of people indebted due to OP Care 23 21 4. %age of people indebted due to IP Care 52 64 14

What is RSBY? • Benefits – – – Cover for Hospitalisation Expenses of Rs. 30, 000/- (US $650) per family (upto five members) per annum on a family floater basis 727 pre-defined surgical packages including Maternity & Newborn Care Cover for Day Care Surgeries All Pre-existing Diseases covered from day 1 Pre/ Post hospitalisation Expenses and Limited Transportation cost ($2 per visit upto a maximum of US $20) covered • Sources of funding for program – – Rs. 30 (US $0. 6) per family per year from Beneficiaries 75% of Premium from Federal Government 25% of Premium from State Government Cost of Smart Card borne by the Federal Government • Both Public and Private hospitals are empanelled • Enrollment is done at Village and Smart Card is provided 15

SMART CARD 16 16

ENROLMENT KIT 17

Current Status of Implementation of RSBY …. since its roll out from 1. 4. 08 As on 31. 03. 2010 Category Numbers Number of People Covered 50 million Number of people benefitted 500, 000 Number of States Started the Process 26 Number of States Distributing Smart Cards 23 Number of States where Policy has Started 22 Number of Insurance Companies involved 11 Number of Smart Cards Distributed 15 million 18

Success So Far • • • Access to People for hospitalisation care is improving Reduction in Out of Pocket Expenditure on Health Using Smart Card and Biometric technology successfully for a social sector scheme at this large scale Portability of Smart Card across India Creating a healthy competition between Public and Private sector health care providers Disease profiling in each District 19

FUTURE PROJECTIONS • It is proposed to cover all the Below Poverty Line families (60 million) by the year 2013 -14. • From 2013 -14, the annual recurring cost would be around Rs. 3600 Crore (U. S. $ 780 million) • RSBY has been extended to Beneficiaries of MGNREGA, Building and Construction workers, Postman, Railway porters etc. • Government of India is considering extending this scheme further to other categories of workers in a phased manner. 20

Other Major Initiatives • The Right of Children to Free and Compulsory Education Act, 2009 is an important step to achieve social justice • Right to Information Act, 2005 has been instrumental in achieving transparency and accountability in governance • To ensure the food security to all, Government of India proposes to enact a legislation on Food Security 21

THANK YOU 22