Labour panel seeks more clarity on Centre’s social security fund for unorganised sector

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Published: August 1, 2020 4:00 AM

For better focus and efficiency, the social security fund should also be utilised to provide hospitalisation, health insurance and life insurance benefits, and old-age pension, the committee said.

The committee has sought a definite road map towards a right-based social security cushion for all workers and has asked the government to give a specific time-frame for effective implementation of the scheme.The committee has sought a definite road map towards a right-based social security cushion for all workers and has asked the government to give a specific time-frame for effective implementation of the scheme. (Representative image)

The Parliamentary Standing Committee on Labour, vetting the labour code on social security, has asked the Centre to make a firm commitment and spell out the terms for financing the social security fund or funds for the social wellbeing of workers in the unorganised sector, gig, platform or any such class of workers who are not yet covered under any security net.

In its final report to the Lok Sabha on Friday, the committee, headed by BJD MP Bhartruhari Mahtab, also recommended that the government should specify the contributions to be made by employers (where identifiable), the central government, state governments along with the diversion of corporate social responsibility (CSR) funds, donations and other sources for the social security fund.

For better focus and efficiency, the social security fund should also be utilised to provide hospitalisation, health insurance and life insurance benefits, and old-age pension, the committee said. The amount to be collected from fines and offences under the labour code could also be used for the purpose.

“Though the (labour) ministry has claimed that sources of funding for schemes have been expanded to include funds from corporate social responsibility or any other such source, the committee feels that there is a lack of firm commitment on the part of the government to fund schemes meant for the unorganised sector. The committee, therefore, recommends that the funding pattern for the schemes meant for the unorganised sector workers be clearly spelt out in the law so as to ensure adequate accrual of funds for potent implementation of various schemes,” Mahtab said.

During the consultation process, the government, however, indicated that there could be expenditure from the Consolidated Fund of India (CFI) to undertake social security scheme under the labour code. However, it said the same cannot be quantified at present.

In the Bill introduced in the Lok Sabha in December last year, the labour ministry proposed a number of funding options for the scheme — wholly funded by the central government; jointly by the Centre and the states; partly by the Centre, partly by states and with contributions from the beneficiary or the employer. It has also been proposed to be funded by any other source, including the CSR fund, as may be specified in the scheme.

The committee has sought a definite road map towards a right-based social security cushion for all workers and has asked the government to give a specific time-frame for effective implementation of the scheme.

Initially, the government had mooted the plan of universalisation of social security for all workers, but subsequently whittled it down. However, in the Bill it introduced in the Lok Sabha last December, the government had indicated that all workers would be brought under social security net by expanding coverage from time to time. But, for the moment, a social security fund or funds for provision of social security would be created for unorganised workers, gig or platform workers.

“The demand of universalisation, including social security benefits for the unorganised sector, will be through formulation of schemes in the field of pension, insurance, provident fund, housing, medical etc. from time to time,” the labour ministry has said.

Earlier, the government had also planned to delegate the functions of Employees’ Provident Fund Organisation (EPFO) and Employees’ State Insurance Corporation (ESIC) to the state governments, but that proposal has been done away with in the recent Bill. So, both the social security organisations would be kept in the central sphere as they exist.

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