If the government can overcome the stiff resistance this has evoked from the public sector insurance companies, it could form part of the forthcoming Budget. The modalities could be worked-out later, officials said. The plan is to pool in premium contribution from the government, the employer and the employee, especially the workers at the bottom rung of the ladder. In case a company needs to "rightsize," the affected workers could be extended an amount equivalent to about one-third of their last-drawn salary in 12 monthly installments to tide over their immediate need for funds.

The insurance industry is somewhat wary of the scheme, with some officials terming it as an inexpensive alternative for corporates who should be extending VRS otherwise. Others saw in the proposal, in its present form, a wholly non-commercial activity and felt that the public sector insurers already had enough on their plate without having to administer this scheme as well. The finance ministry seems keen to exploit the vast distribution network of the PSUs, while the companies themselves feel that being weighed down with such burdens will only take away from their focus on competing in the newly liberalised market.

It is understood that the labour ministry too is involved in the deliberations. A section of insurance officials felt that the scheme would have to be very selective in its purview. They averred that it should address only the organised sector, so that it is easier to track and verify beneficiaries through their employees family pension (EPF) numbers or other similar methods. Moreover, they pointed out, the eligibility criteria must prescribe, for the scheme to be applicable, a certain minimum number of employees being hit by retrenchment, and not just two or four.

The officials also seemed averse to extending such a cover to any and every worker in the unorganised sector as factors like migration in search of jobs could make it too unwieldy to administer.