Press Release

17 February 2007, New Delhi

The Unorganised Workers Social Security Bill, 2007 posted by the Ministry of Labour has in effect diluted the critical principle of universality. The principle of the National Minimum Social Security Benefit has been watered down and separated from provisions of taxation and support from the central government budget. Furthermore, the provision of a National Minimum has been violated in so far as it has been linked to and made contingent upon contributions from workers.

The Bill seeks to provide clearly demarcated division of responsibility between the Central and State governments. In pursuance of this division the bill places the burden of the National Minimum Social Security Benefit on the Central Government. In this regard three issues need to be spelt out very clearly:

  • It is critical to define the basis of the National Minimum Social Security Benefit such that it is directly linked to the statutory minimum wage.
  • This National Minimum cannot be in any way be linked to either the contribution of workers or be subject to the availability of funds.
  • In the event of funds falling short, the costs of the National Minimum must be met through the Central Government’s budgetary funds.

Benefits under the National Minimum laid out also need to be more specific:

  • health benefits must include hospitalisation charges and maternity benefits.
  • life and disability cover must include employment injury benefit, including provision for wages when recovering from employment injury.
  • a pension must be provided as a National Minimum and must be linked to the statutory minimum wage.

State schemes must be focused to strengthen the National Minimum and hence on expanding quality social security benefits and should not be confused with the National Minimum. Further, the power of state government or their agency to make rules regarding registration of workers, issuance of identity cards, social security numbers is likely to result in non-uniformity between states resulting in inequality amongst workers of different states in accessing the National Minimum and in the portability of registration for workers migrating from one state to another. In order for uniformity on this issue there must be adequate clarity on registration of workers laid out in the central enactment.

In keeping with the principle of the National Minimum workers should be exempt from contributing to this National Minimum and therefore to the prescribed National Fund. Further apart from contributions from Government and employers there must be provision for an additional special tax or levy that may be decided upon by government. Such a provision would be not just in keeping with the notion of the National Minimum but, also in consonance with the egalitarian objectives of a progressive society.