In its original form, the scheme envisaged a three-way contribution to the insurance premium providing for social security cover to low-wage workers. However, the scheme as announced by the finance minister is silent on the issue of the subsidised premium.

Ministry officials said public sector non-life companies were working out the premium rates to be charged from employers and employees. They confirmed the scheme would contain no subsidy element.

It is understood that the insurers, who are being asked to administer this policy on a no-profit-no-loss basis, have expressed strong reservations on having to handle such a non-commercial activity. A section of the industry even sees this scheme as an inexpensive alternative for corporates who should be extending VRS otherwise.

However, at a meeting convened by the ministry last week, the four state-owned companies have been told to finetune the modalities and gear up for the launch within two to three weeks.

Mr Sinha had stated in his Budget speech: ``I am conscious of the short-term impact on organised labour of the on-going liberalisation of the economy.'' He had gone on to announce a group insurance scheme to extend security cover to such affected workers.

The policy, as outlined by the finance minister, envisages compensation of up to 30 per cent of last drawn annual pay for a period of one year to workers who lose their jobs.

``It is proposed that the policy will initially cover all employees drawing a salary up to Rs 10,000 per month,'' he added, and announced that full details including premium rates of the proposed policy would be available by the end of June 2001.