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Social Security, Employment And Livelihoods In Indian Cities – IMPRI Impact And Policy Research Institute

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Social Security, Employment and Livelihoods in Indian Cities

Session Report
Narayani Bhatnagar

Marking the fifth day of such a riveting one-month online certification training course on  Urban Policy and City Planning, an Online International Monsoon School Program organised by the Center for Habitat, Urban and Regional Studies (CHURS) at IMPRI (Impact and Policy Research Institute), New Delhi was inaugurated by Mahek Agarwal, a researcher at IMPRI, who welcomed the speakers and participants to the program with an introduction to the distinguished panellists. The Chair for this session was Dr Rumi Aijaz, Senior Fellow and Head, of Urban Policy Research Initiative, Observer Research Foundation (ORF), New Delhi.

Our last speaker for the fifth day, Mr Sandeep Chachra, Executive Director, ActionAid Association, India, and Ex Co-Chair, World Urban Campaign, UN-HABITAT; Advisor, IMPRI.

Mr Chachra expressed his gratitude to IMPRI for having him today and presenting on Social Security, Employment and Livelihoods in Indian Cities.

The Development of Social Security

He started his presentation by sharing the evolution of Social Security. While social welfare programmes have existed throughout history, contemporary social security may be traced back to the early days of capitalism around the end of the 16th century.

The first systematic formulation of such notions was the English Poor Law (1601). It was a tax-funded assistance programme that discriminated between the ‘deserving’ and ‘undeserving’ poor. It was locally regulated by the community through the building of alms homes to lodge individuals in need of such relief measures. Economic security was widely regarded as a concern affecting just the poor. The English Poor Laws, which were weakly enforced but frequently employed in the 17th and 18th centuries, may be considered an early social aid effort.

Chancellor Otto von Bismarck developed the world’s first social insurance plan in the shape of the Sickness Insurance Law (1883). This, too, was conceived not of humanitarianism, but of political ambition – to stop the rise of socialism and prevent a revolution by offering some relief measures to disgruntled workers. It was an obligatory contribution programme to which both the employer and the employee contributed in order to offer medical treatment and monetary compensation to employees in selected industries during illnesses.

However, the peak of social security as a concept occurred during World War II. Not only did the Beveridge Committee (1942) emerge as the first conception of social security, but there were also other historic announcements in the history of human rights.

As a result, unlike the English Poor Law, the Universal Declaration of Human Rights (UDHR) (1948) identified an individual’s entitlement to social security (Article 22) as a basic human right rather than a handout. Articles 22-27 of the UDHR defended the right to a decent quality of life and demanded greater facilities and care for the physically impaired, as well as mothers and children. This signified a crystallisation of a rights-based approach to social security in the mid-twentieth century.

Individual rights were recognised in the International Covenant of Economic, Social, and Cultural Rights (1966), which included employment rights, the right to health, the right to an appropriate quality of living, and the right to an adequate standard of life.

Nevertheless, there has been a narrowing of the concept of social security during the last 30 years or more. This is especially true now that the ILO has shifted its focus from social security to social protection, finally recommending social protection standards in 2012.

The present aim of the social security system is to provide, at least, that everyone in need has access to needed healthcare and basic income stability throughout their lives.

As a result, the present international order has tended to focus mainly on the necessity of income security, with little cash transfer ‘guarantees’ in the commercialization of human needs. In this view, the state’s responsibility to provide universal, high-quality public services in health, education, and other important human services has been abandoned in favour of insurance-driven systems.

Furthermore, the emphasis has been on focusing on basic safeguards for the poorest and most disadvantaged individuals rather than on the social, cultural, and economic rights of all citizens as intended in the Universal Declaration of Human Rights (1948).

Defining Social Security

Upon defining ‘social security’, Mr Chachra shared one of the earliest definitions of social security presented in the Beveridge Committee report (1942). It defined social security as “freedom from fear and wants,” but it was limited to hospital and rehabilitation services, as well as the provision of child allowances.

In 1984, the ILO defined social security as, ‘the protection that a society provides to individuals and households through a series of public measures against the economic and social distress that otherwise would cause the stoppage or substantial reduction of earnings resulting from sickness, maternity, employment injury, invalidity and death; the provision of medical care; and the provision of subsidies for families with children’.

The International Labour Organization’s Social Security (Minimum Standards) Convention (No. 102) divides social security systems into nine standard branches: 

(i) healthcare, 

(ii) sickness, 

(iii) old age, 

(iv) unemployment, 

(v) employment injury, 

(vi) family and child support, 

(vii) maternity, 

(viii) disability, and 

(ix) survivors and orphans.

However, the ILO’s conceptualization of social security has been attacked for being overly restricted and based solely on the experiences of the global north, failing to account for disparities between the north and south.

For starters, structural factors in the global south frequently restrict the penetration of social security systems such as unemployment benefits, pension systems, and maternity benefits that are common in developed nations. Because of the undeveloped capital and insurance markets, the predominance of informality, the high percentage of agricultural work, and self-employment, a large portion of the population is excluded from the scope of social security systems.

Second, poverty, wealth, and income disparities, as well as limited access to productive assets, markets, and institutional assistance, render the poor in these nations more sensitive to shocks throughout their lives. Due to the significant socio-economic demands of emerging nations, as opposed to those of wealthy countries, the traditional notion of social security systems has been widely judged inadequate.

Defining Employment and Livelihood

The National Sample Survey Organisation (NSSO) considers a person ’employed’ in the Periodic Labour Force Survey (PLFS) and other employment and unemployment-related surveys using the definition of ’employment’ provided by the 19th International Conference of Labour Statisticians (ICLS) 2013 of the International Labour Organisation (ILO). 

As per that definition,

“Persons who were engaged in any economic activity or who, despite their attachment to economic activity, abstained themselves from work for the reason of illness, injury or other physical disability, bad weather, festivals, social or religious functions or other contingencies necessitating temporary absence from work, constituted workers (or employed). Unpaid household members who assisted in the operation of economic activity in the household farm or non-farm activities were also considered as workers.”

“A person is considered working (or employed) if he/she worked for at least one hour on at least one day during the 7 days preceding the date of survey or if he/she had worked for at least 1 hour on at least one day during the 7 days preceding the date of the survey but did not do the work”.

Livelihood as defined by the ILO is far more encompassing than employment.

“A livelihood refers to capabilities, material and social resources and activities required for a means of living. It can be a set of activities and strategies pursued by household members, using their various assets (physical, natural, human, social, financial) in order to make a living. Livelihoods usually involve the employment of household labour and the use of other household assets, if any, in order to live on the proceeds. For the large majority of people across all countries, the most important livelihood asset is primarily their own labour, followed by other household assets (physical, financial, social and natural)”

Constitutional Provisions:

He further elaborated on the constitutional and legal promises of socio-economic rights. The Indian Constitution has all of the factors that obligate the state to strive towards the realisation of socio-economic rights. Human trafficking and child work in dangerous sectors are prohibited under the Fundamental Rights chapter, as is the Freedom to Organise Groups and Unions and the Right of Children to an education.

The Directive Principles of State Policy in the Constitution provide:

“The State shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and public assistance, in cases of unemployment, old age, sickness and disablement and in other cases of undeserved want”.

Although India has not ratified the International Labour Organization’s Social Security (Minimum Standards) Convention, 1952 (No. 102), it has well-established social security systems that provide varying degrees of coverage in several of the Convention’s nine branches, which primarily aim to cover formal workers in the organised sector, which includes private firms/establishments of a certain size or public sector establishments of any size.

Legal Provisions

India also offers a myriad of social protection systems, both at the national and state levels, that cater to various sectors of the population. These plans address a wide range of issues, including basic education and health, job development and promotion, workers’ social security, food and nutrition security, and social pensions.

The Code on Social Security 2020 is legislation that amends and consolidates pre-existing social security regulations with the purpose of extending social security to all employees and workers in all industries, whether organised or unorganised.

The Code of Conduct The Employees’ Compensation Act of 1923, as amended by the Employees’ State Insurance Act of 1913. Employees’ Provident Funds and Other Provisions Act of 1952, The Employment Exchanges (Compulsory Vacancy Notification) Act of 1959, the Maternity Benefit Act of 1962 The 1972 Pairment of Gratuity Act, The Workers’ Welfare Fund Act of 1982 The Building and Other Construction Workers (Employment and Conditions of Service Regulation Act of 1996) Social Security Act for Unorganised Workers of 2008.

The Employees’ State Insurance Act of 1948 applies to companies and businesses with ten or more employees and offers comprehensive medical treatment to employees and their families, as well as monetary benefits during sickness and maternity, and monthly payments in the event of death or disability.

The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, applies to particular designated factories and businesses with 20 or more employees and assures terminal benefits to provident fund, superannuation pension, and family pension in the event of death while on the job.

The Maternity Benefit Act of 1961, as revised in 2017, allows for up to 26 weeks of paid maternity leave for female employees. It also requires crèche facilities for any businesses with 50 or more employees.

Important Social Security Schemes and their Provisions

He then proceeded to share some important social security schemes and their provisions. As stipulated by the National Food Security Act (NFSA), 2013, the Public Distribution System strives to provide food security by delivering key staples like pulses, wheat, rice, and so on at reduced rates to low-income families.

Every priority family member is entitled to 5 kilograms of food grain per person per month at a discounted price set by the state government. Antyodaya Anna Yojna families would be entitled to 35 kgs of food grain per family per month at a discounted price set by the state government.

The ground-breaking NFSA 2013, which made subsidised food grains a legal right, mandates coverage for up to 75% of the rural population and 50% of the urban population. Based on this, the overall coverage, as stipulated by the Act, is 67% of the country’s population, or more than 80 crore people.

Nutritional Support for Pregnant Women and Lactating Mothers – Every pregnant woman and lactating mother shall be entitled to free meals during pregnancy and six months after childbirth through the local anganwadi, in order to meet the nutritional standard as specified in schedule II of the NFSA 2013, in such instalments as specified by the state governments.

Nutritional Support to Children – Every child up to the age of fourteen years shall have the following entitlement to meet their nutritional requirements: for children aged 6 months to 6 years, a free age-appropriate meal through the local Anganwadi to meet the nutritional standard specified in Schedule II of the NFSA 2013; for children aged 6 to 14 years or up to class VIII, one free mid-day meal shall be provided every day except on school holidays by local bodies, government schools and government-aided schools.

The Pradhan Mantri Awas Yojana – Urban (PMAY-U), a flagship Mission of the Government of India, was started in June 2015 by the Ministry of Housing and Urban Affairs (MOHUA). By 2022, the Mission will have provided a pucca home to all eligible urban households in the Economically Weaker Sections/Low-Income Group and Middle Income Group categories, including slum residents.

Affordable Rental Housing Complexes (ARHCS) are a sub-scheme of the Pradhan Mantri Awas Yojana – Urban (PMAY-U), launched by the Ministry of Housing and Urban Affairs. This will make it easier for urban migrants and the disadvantaged in the industrial sector as well as the non-formal urban economy to find respectable, cheap rental homes near to their employment.

Under this Mission, PMAY (U) has made it necessary for the female head of the household to be the owner or co-owner of the house. 118.9 lakh dwellings have been sanctioned and 112.22 lakh houses have been built under the project to date. The Building and Other Construction Employees (Regulation of Employment and Conditions of Service) Act of 1996 establishes safety, health, and welfare standards for construction employees.

Every building and other construction worker who has reached the age of 18 but has not yet reached the age of 60 and has worked more than 90 days in any building or other construction work in the previous 12 months and is not a member of any other welfare fund is eligible for registration as a beneficiary.

The State Governments levy and collect a fee of 1% of the cost of construction under the Building and Other Construction Workers’ Welfare Access Act of 1996. The cess money is used by the states to provide essential social security provisions through their individual State Buildings and Other Construction Workers’ Welfare Boards established under the BOCW Act.

The Government of India launched the Deendayal Antyodaya Yojana – National Urban Livelihood Mission to reduce poverty and vulnerability of urban poor households by enabling them to access gainful self-employment and skilled wage employment opportunities, resulting in an appreciable improvement in their livelihoods on a sustainable basis, by building strong grassroots level institutions of the poor.

The project intends to provide urban homeless shelters equipped with critical services in stages. Furthermore, the mission tackles urban street vendors’ livelihood problems by providing access to proper locations, institutional financing, social security, and skills for urban street vendors to leverage rising market possibilities.

The mission also plans to establish strong rights-based links with other programmes that address the right of the urban homeless to food, healthcare, education, and other necessities, as well as to ensure access for homeless populations to various entitlements, such as social security, pensions, PDS, ICDS, drinking water, sanitation, financial inclusion, school admission, and so on, as well as to affordable housing.

The Micro, Small, and Medium Enterprises (MSME) sector has grown to be a significant contributor to the country’s socioeconomic growth. The Union allocation 2023 includes an estimated allocation of INR 22,140 crores for the MSME sector, a 42% increase over prior years. This funding will be used to execute different plans to provide accessible and inexpensive loans, technological advancements, and infrastructure development.

The Union Ministry of MSME operates a number of initiatives aimed at providing credit and financial aid, skill development training, infrastructure development, marketing help, technological and quality improvements, and other services.

The Prime Minister’s Employment Generation Programme (PMEGP), Credit Guarantee Trust Fund for MSES (CGTMSE), Entrepreneurship and Skill Development Programmes (ESDP), Fund for Regeneration of Traditional Industries Scheme (SFURTI), and Micro and Small Enterprise Cluster Development Programme (MSE-CDP) are all important schemes.

The NREGS program’s relative effectiveness as a relatively successful policy for impoverished rural households to fall back on during the COVID-19 epidemic has prompted numerous states, including Himachal Pradesh, Jharkhand, Odisha, Tamil Nadu, and Rajasthan, to launch their own urban job guarantee plans. Kerala has had a comparable programme called the Ayyankali Urban Employment Guarantee Scheme in place since 2010.

These initiatives give 100-120 days of paid employment to residents of their respective states’ metropolitan districts. While each state has a different list of jobs available under such programmes, the majority of jobs include maintenance of urban commons, public buildings, and sanitation-related tasks.

Indira Gandhi National Old Age Pension System (IGNOAPS): This is a non-contributory old-age pension system for people over the age of 60 who are poor.

Pradhan Mantri Shram is a Pradhan Mantri Shram, PM-SYM Yogi Maan-dhan: It is a voluntary contributing system for the economic security of unorganised employees in old life. It includes home-based employees, street sellers, cobblers, rag pickers, domestic workers, rickshaw pullers, landless labourers, and self-employed individuals.

Atal Pension Yojna (APY): A pension programme for unorganised employees who do not pay income taxes.

Pradhan Mantri Kisan Man Dhan Yojana (PM-KMY): Provides a monthly pension of Rs 3,000 to small and marginal farmers who reach the age of 60 and contribute between Rs 55 and Rs 200 depending on their age of entry.

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY): Provides unorganised employees (18-50 years) with a Rs 2 lakh life insurance cover in exchange for a Rs 330 per year premium.

Pradhan Mantri Suraksha Bima Yojana (PMSBY): Provides insurance to unorganised employees (18-70 years) for Rs 2 lakh in case of accidental death or total disability, and Rs 1 lakh in case of partial disability, for a yearly premium of Rs 12.

JSY (Janani Suraksha Yojana): It gives conditional cash transfers to pregnant women in order to minimise maternal and newborn mortality by encouraging institutional delivery. The quantity varies across rural and urban regions, as well as between poor and high-performing states.

Pradhan Mantri Matru Vandana Yojana (PMMVY): It offers a monetary bonus of Rs 5,000 to pregnant women and breastfeeding moms for their first live delivery.

The Indira Gandhi National Widow Pension Scheme (IGNWP): It provides Rs 2000 per month to widows under the age of 60.

Pradhan Mantri Kisan Samman Nidhi (PMKISAN): PM-KISAN is an income support plan that offers up to Rs 6,000 per year to small and marginal farmers.

The Mahatma Gandhi National Rural Employment Guarantee Scheme: It seeks to achieve livelihood stability by providing 100 days of employment to each rural household each year.

Indira Gandhi National Disability Pension Scheme (IGNDPS): It offers up to Rs 300 per month to persons with severe impairments above the age of 18 in order to shield them from economic hardship caused by disability.

Pradhan Ayushman Bharat PM-JAY (Mantri Jan Arogya Yojana): It covers secondary and tertiary care hospitalisation at public and accredited private hospitals up to Rs. 5 lakhs per family per year.

The Unorganised Workers’ Social Security Act of 2008: It provides for the establishment of Social Security Boards for unorganised sector workers at the Central and State levels, which shall recommend the formulation of social security schemes for unorganised workers in terms of life and disability cover, health and maternity benefits, old age protection, and any other benefit as determined by the Government. Its provisions have been incorporated and superseded by the 2020 Social Security Code.

Important Challenges

The presence of a substantial informal economy has been the key barrier in increasing adequate social security coverage in a nation like India. The Indian economy is one of the few significant and developing economies with a large informal sector characterised by a huge number of small firms of self-employed and hired workers with no employment and/or social protection.

Over the years, India’s conceptualization of informality has been sluggish to grow. For many years, informality was defined using a residual method, which meant that all people and businesses that were not in the official sector were considered informal.

The National Commission for Enterprises in the Unorganised Sector (NCEUS) defined the informal sector as,

“unincorporated private enterprises owned by individuals or households engaged in the sale and production of goods and services on a proprietary or partnership basis, with fewer than ten workers.”

Another barrier to establishing social security in India is the country’s fragmented administrative and delivery systems. While different ministries or governments (state and central) are in charge of different plans. While the E-Shram site established a centralised database for persons in informal work, it has yet to be connected to major social security programmes.

Furthermore, the fragmented system has resulted in a considerable lack of entitlement portability among jurisdictions. This is especially important for migratory workers, who are yet another vulnerable category and are frequently employed in the informal sector, travelling from one location to another and frequently crossing state boundaries for employment.

Though arrangements were developed in the aftermath of COVID-19 for accessing PDS via e-Ration cards from everywhere and everywhere, the portability has yet to be extended to other programmes. The Occupation Safety, Health, and Working Conditions Code (2020), aims to offer some flexibility in migrant workers’ access to social security, however, there are significant implementation challenges.

Recommendations

Social security systems must attempt to move away from the neoliberal order’s ‘minimalistic‘ and ‘individualistic‘ inclinations. Instead, if major advances are to be made, a commitment to provide universal, high-quality public services in health, education, and other critical human services to everyone is required.

Market-oriented insurance models paired with tax-funded assistance programmes for the poor may minimise the fiscal burden, but they may result in severe exclusion or inadequate protection of informal workers. Low and inconsistent wages typical of the informal sector make regular payments by employees and employers problematic, and the major employer is difficult to identify due to the country’s various layers of subcontracting.

To enhance coverage, there is an urgent need to shift beyond the conventional direct and stable conceptualisation of the employer-employee connection, which now serves as the foundation of the country’s social protection law. The notion of informal labourers should be reconsidered. To guarantee wider inclusion of unpaid workers and platform workers, it must be consistent with the broad definitions of labour and employment outlined in the 19th and 20th ICLS.

Income-focused, discretionary, minimalist (intended for the poor), and conditioned social security policies must be phased out. A social protection system must be founded on a concept of social fairness based on human rights. There must be a clear line between entitlements and giveaways.

Evidence from Brazil suggests that a multi-sector approach to social protection initiatives can be critical to effectively tackling development concerns. The Bolsa Familia is an obvious example. It is a comprehensive social assistance system that is integrated with numerous development goals (such as vaccination, school attendance, maternal health, and education) and may be more successful in combating poverty in all of its manifestations.

Mr Chachra concluded his presentation by sharing the urgent need for India to understand its current demographic transition era. As the population ages, the infrastructure for old-age pensions must be updated. The Chinese example might be beneficial because both nations have comparable demographic transitions, population sizes, and densities. Recognising that the Chinese population is ageing and in response to harsh criticism of the social security system, China has overhauled its pension programmes.

Universal Basic Income might be a valuable supplement, but it should not be used in place of state-provided social safety. Transition requires a robust civil society, political will, and action.

Investment and support for the Social and Solidarity Economy can be an essential step forward since it has the capacity to overcome both market and state failings, particularly during a crisis, due to its grassroots approach and socially oriented fundamental aim.

Land rights, particularly urban land rights for slum residents, urban informal labourers, and the urban poor in general, are critical steps towards establishing a decent urban future.

With climate change affecting informal employees’ working circumstances, the loss of employment and pay hours due to climate change must also be accounted for in social security systems.

Every lecture was followed by an interactive question and answer session which facilitated a more nuanced understanding of the topics covered and cultivated a critical understanding among the participants about the discourse of Urban Policy and City Planning. 

The session for the fifth day ended with Mahek Agarwal, a researcher at IMPRI, thanking the panel members for their insightful sessions and the program ended with a vote of thanks.

Acknowledgement: Narayani Bhatnagar is a research intern at IMPRI.

Read more session reports on web policy learning events conducted by IMPRI:

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