"In order to make the reforms sustainable, alongwith economic restructuring, adequate protection would need to be provided, particularly to the weaker segments of the population, by creating suitable safety nets," the RBI states.

This would be in addition to the existing poverty-alleviation programmes such as the Integrated Rural Development Programme, Nehru Rozgar Yojana, Prime Minister's Rozgar Yojana and the targeted Public Distribution System, the central bank states.

"Fiscal consolidation often entails reduction in consumption expenditures as well as cutbacks in distortionary expenditures like subsidies," the report states.

The 1998-99 budget has proposed to constitute a separate restructuring fund which would take care of the fund requirements of public sector enterprises to offer compensation packages to the workers."This would, however, solve the issue of only a small segment of the workforce," the report adds.

The social safety net would alleviate the adverse effects of reforms that underline economic restructuring and fiscal consolidation, the central bank states.

In its annual report, the apex bank has pointed out that the experience of western economies has, by and large, given clues to emerging economies to take sufficient safeguards while evolving social security nets as part of their economic reform processes.

In India, the issues relating to the introduction of a social safety net are multifarious. First, the general provision of social services is essentially facilitated by the state governments.

Though some social security schemes like work-injury benefit, sickness, maternity and medical care and old age invalidity and survivors pension are in existence for some time, these schemes are restricted to a small proportion of the workforce in the organised sector.

The majority of the population, whichworks in subsistence agriculture or in urban informal sector, does not come under the purview of any formal social security system, the RBI states.

The central bank has said the common elements of social safety net as part of the economic reform package, as specified by the World Bank, encompass targeted subsidies, provision of permanent social security and unemployment benefits.