Social security fund: Identify resources for unorganised sector cover, says Parliamentary panel

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Published: July 30, 2020 6:30 AM

The social security code proposes to empower the central government, by notification, to constitute the Social Security Fund or funds for provision of social security and to be administered by the central government.

The committee is also likely to propose the government to bring in the agricultural workers and domestic workers under the coverage of the proposed social security fund.The committee is also likely to propose the government to bring in the agricultural workers and domestic workers under the coverage of the proposed social security fund.

The parliamentary committee on labour is likely to ask the government to specifically mention sources of fund for the social security fund it has proposed in the labour code for the unorganised workers, platform workers and gig workers or any such category of workers not covered under any social security net so far.

A beneficiary of the social security fund is proposed to be entitled to old-age pension, receive life & disability cover and health & maternity benefits among others. The size of the proposed fund could not be ascertained.

In the Bill introduced in Lok Sabha in December last year, the labour ministry proposed a number of funding options for the scheme — wholly funded by the central government; partly by the Centre and partly by the states; partly by the Centre, partly by state and partly by contribution from the beneficiary or the employer. It is also proposed to be funded from any other source such as the Corporate Social Responsibility (CSR) fund as may be specified in the scheme.

“Since the social security fund is needed to have a regular fund flow, the source of the fund should be specifically mentioned in the Code. We want the government to do that in the final Bill,” a member of the committee, which adopted its recommendations on the social security code in its meeting on Wednesday, said. The committee, headed by BJD MP Bhartruhari Mahtab, is likely to submit its final recommendations to the Lok Sabha secretariat on Friday.

The committee is also likely to propose the government to bring in the agricultural workers and domestic workers under the coverage of the proposed social security fund.

The code on social security also proposed to empower the central government to provide for the scope of the scheme, authority to implement it, identify the beneficiaries, resources and the implementing agency. The Center may also set up a special purpose vehicle for the implementation of the scheme.

The social security code proposes to empower the central government, by notification, to constitute the Social Security Fund or funds for provision of social security and to be administered by the central government.

It is not clear at this stage whether the panel’s views would impel the government to make the necessary changes in the draft.

The code on social security amalgamates nine central amendments relating to social security including the employees’ state insurance act, 1948 and the employees’ provident funds and miscellaneous provisions act, 1952. Among others, it proposes differential rates of employees’ contribution for class of employees for Employees’ Provident Fund (EPF) as the central government may notify for a specified period.

It also proposes to provide for payment of gratuity in case of fixed term employment on pro-rata basis even if the period of fixed term contract is less than five years. The code also makes Aadhaar mandatory for seeding at the time of registration of member or beneficiary or any other person for receiving benefit.

It also empowers the government to exempt certain establishments from all or any of the provisions of the proposed code.

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