Here?s a proposal from India Inc that didn?t figure in the pre-Budget meeting with finance minister Pranab Mukherjee on Tuesday. In a complete U-turn from their usual antipathy towards complicated tax regimes, three key industry chambers have asked the government to levy a cess or surcharge on income tax, including corporate tax, to help bankroll social security programmes for workers in the unorganised sector.
Ficci, CII and the Federation of Indian Small & Medium Enterprises (Fisme) have suggested that such a cess can be levied to ?recognise the contribution of unorganised workers to the country?s economy?.
Informal sector workers constitute over 94% of India?s 400-million plus workforce, but receive no social security benefits like the pension or healthcare available to organised sector workers under the Employees? Provident Fund and Employees? State Insurance Corporation. After years of protracted deliberations, the Centre legislated the Unorganised Workers? Social Security Act in 2008, under which a National Social Security Board (NSSB) was constituted to formulate schemes for such workers.
At its first meeting in September, NSSB chairman and minister for labour & employment Mallikarjun Kharge admitted that though the government had launched schemes like the Rashtriya Swasthya Bima Yojana for unorganised workers below the poverty line and the Aam Aadmi Bima Yojana for the rural landless, this was ?miniscule?.
The minister had set up a committee under former Planning Commission member Bhalchandra Mungekar to examine existing schemes and suggest a framework for expanding social security coverage.
The committee, whose recommendations are to be examined at the NSSB?s next meeting on Thursday, has suggested schemes to provide health and maternity benefits, life & disability cover, as well as old-age pension for informal sector workers.
But since budgetary support is likely to be minimal, if any, representatives of Ficci, CII and Fisme on the Mungekar panel proposed that a cess or surcharge be levied on income tax. Ironically, industry has always opposed such surcharges.
But this isn?t the only surprise. Equally surprising is its suggestion that basic social security cover be granted to informal sector workers in phases rather than across the board. There are other inconsistencies in the NSSB panel?s specific recommendations, too.
For instance, in the first phase, the committee recommended providing cover to construction workers, beneficiaries under the National Rural Employment Guarantee Scheme and primary healthcare workers. But state governments already levy a cess on construction activities to fund benefits for workers in the sector. However, in most states, the funds lie unused, as no schemes have been devised for them.
The panel has also sought clear definitions for home-based workers, domestic workers, vendors, rickshaw pullers, rag pickers and head-load workers so that they could be identified. After their definitions are clearly laid out, the Mungekar committee wants surveys to be undertaken to ascertain their numbers.
Moreover, the Mungekar panel has also suggested that the rail ministry extend schemes for porters, coolies and gang men and meet the expenditure for such schemes itself. Again, it?s not clear why gang men have been included in its wish list as they already enjoy social security benefits paid for by the rail ministry.
For health benefits, the panel recommended extending the Rashtriya Swasthya Bima Yojana to the four categories of workers identified for the first phase. The Indira National Old-Age Pension Scheme, which currently provides a monthly benefit to citizens over 65 years of age below the poverty line, should be extended to informal workers, the panel said. However, it recommended lowering the eligibility age under the scheme to 60.
The committee, whose recommendations are to be examined at the NSSB?s next meeting on Thursday, has suggested schemes to provide health and maternity benefits, life & disability cover, as well as old-age pension for informal sector workers.
But since budgetary support is likely to be minimal, if any, representatives of Ficci, CII and Fisme on the Mungekar panel proposed that a cess or surcharge be levied on income tax. Ironically, industry has always opposed such surcharges.
But this isn?t the only surprise. Equally surprising is its suggestion that basic social security cover be granted to informal sector workers in phases rather than across the board. There are other inconsistencies in the NSSB panel?s specific recommendations, too.
For instance, in the first phase, the committee recommended providing cover to construction workers, beneficiaries under the National Rural Employment Guarantee Scheme and primary healthcare workers. But state governments already levy a cess on construction activities to fund benefits for workers in the sector. However, in most states, the funds lie unused, as no schemes have been devised for them.
The panel has also sought clear definitions for home-based workers, domestic workers, vendors, rickshaw pullers, rag pickers and head-load workers so that they could be identified. After their definitions are clearly laid out, the Mungekar committee wants surveys to be undertaken to ascertain their numbers.
Moreover, the Mungekar panel has also suggested that the rail ministry extend schemes for porters, coolies and gang men and meet the expenditure for such schemes itself. Again, it?s not clear why gang men have been included in its wish list as they already enjoy social security benefits paid for by the rail ministry.
For health benefits, the panel recommended extending the Rashtriya Swasthya Bima Yojana to the four categories of workers identified for the first phase. The Indira National Old-Age Pension Scheme, which currently provides a monthly benefit to citizens over 65 years of age below the poverty line, should be extended to informal workers, the panel said. However, it recommended lowering the eligibility age under the scheme to 60.