social

security for
unorganised
workers
in india

59
 SOCIAL SECURITY FOR
UNORGANISED WORKERS
IN INDIA
Social Security for Unorganised Workers in India

Principal Researcher and Writer

Vaibhav Raaj

ActionAid Hub
Citizens Rights Collective (CiRiC)

The study on “Social Security for Unorganised Workers in India” was done
as part of the European Commission supported project: “Securing rights
and sustainable livelihoods through collective action and education for
people dependent on the informal economy in India.”

Some rights reserved

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NonCommercial-ShareAlike 4.0 International License. Provided they
acknowledge the source, users of this content are allowed to remix,
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same original license terms.

First published 2019.

Photograph by Stuart Freedman

Published by

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 CONTENTS
Foreword v
Acknowledgements vii
Abbreviations ix

Introduction 1

Chapter I 5
Unorganised Workers: The Normalisation of Precarious Existence
1.1. Definition and Description of Unorganised Sector/Workers 7
1.2. Population Size 8
1.3. Sectoral Distribution of Unorganised Workers 9
1.4. Social Composition of the Unorganised Workforce 9
1.5. Legal Protection for the Rights of Unorganised Workers 12
1.6 Conditions of Work 13
1.7 Social Security 13
1.8. Migration 13
1.9. Conclusion 15

Chapter II 17
The Meaning and Realisation of the Right to Social Security
2.1. All Citizens as Workers 19
2.2. State Paternalism and Structural Transformation 20
2.3. Parameters of Evaluation 22

1.9. Conclusion 28

Chapter III 31
Legislating Social Security in India
3.1. State Discourse on Unorganised Workers 31
3.2. The Legislative Evolution Towards Unorganised Workers Social Security 35
3.3. The Unorganised Workers Social Security Act, 2008 37

Chapter IV 41
Contemporary Direction of Social Security Policy
4.1. A Framework for Review of the Code 41
4.2. Nature of Benefits 42
4.3. Categories of Workers That Will Benefit 43
4.4. Worker as a Scheme Member 45
4.4. The Universalisation of Contributory Social Security 45
4.6 A Brand New National Social Security Administration 46
4.7 A Preliminary Comment on the Code 47
Appendix 51

Bibliography 53
 FOREWORD

The world of work for majorities of Indians is full of fragility and vulnerability. Ever-increasing flexibilities in the labour
markets push workers into further vulnerabilities with regard to wages, “working conditions” and “bargaining ability”. The
vast majorities of our workers in India, over 93% of them, fall in the category of the “informal sector” – with no regularity of
wages, measly, if any, forms of social security and rights, and little prospect of joining the ranks of regular wage workers.

To construct a fair and just world for millions of wage workers we need to constitute a constitutionally enshrined and
justiciable “right to work”, in addition we need to make good on a promise of a decent minimum wage with provisions of
indexation. The labour laws regime should unequivocally ensure equal wages for equal work; the recognition, reduction and
redistribution of unpaid care work of women; and a universal social security cover with social security and right to food,
education, health, shelter, decent work, pensions, maternity benefits, life and disability cover.

As part of the European Commission supported project to work on “Securing rights and sustainable livelihoods through
collective action and education for people dependent on the informal economy in India” it was felt that a study should be
undertaken on the issue of social security for unorganised workers that could inform ongoing interventions and engagements
to ensure rights of working people.

We are thankful that Vaibhav Raaj took up the responsibility of researching the subject and writing up the report. Colleagues
at Citizens Rights Collective (CiRiC) assisted the study and in bringing out this publication.

We look forward to any comments and suggestions.

In solidarity,
Sandeep Chachra,
ActionAid Association
 ACKNOWLEDGEMENTS

This report was prepared by ActionAid Association as a part of the project ‘Securing rights and sustainable livelihoods
through collective action and education for people dependent on the informal economy in India,’ supported by the European
Commission and implemented through the Citizens’ Rights Collective. It is researched and written by Vaibhav Raaj.

Members of the Workers’ Solidarity Network and the Working Peoples’ Charter are thanked for their support in developing
some important arguments in the report. Meena R. Menon guided the drafting of this report and reviewed it. Gratitude is
also expressed to Professors Ravi Srivastava and Praveen Jha, Baba Adhav, Ramendra Kumar, Sudhir Katiyar, Dr Chirashree
Dasgupta and others for sharing their insights on the subject. Special thanks are due to Chandan Kumar and Ananya Basu
for their support in the writing of the report.
 ABBREVIATIONS

DPSP : Directive Principles of State Policy

EPF : Employees’ Provident Fund

FDI : Foreign Direct Investment

GoI : Government of India (the Central Government)

HLEG on UHC : High Level Expert Group on Universal Health Coverage

ICDS : Integrated Child Development Scheme

ILO : International Labour Organization

IMF : International Monetary Fund

MDMS : Mid-day Meal Scheme

MoHUPA : Ministry of Housing and Urban Poverty Alleviation

MoLE : Ministry of Labour and Employment

NAC : National Advisory Council

NAFUS : National Fund for the Unorganised Sector

NCAER : National Council for Applied Economic Research

NCEUS : National Commission for Enterprises in the Unorganised Sector

NCL-I : First National Commission on Labour Report, 1969

NCL-II : Second National Commission on Labour Report, 2002

NCRL : National Commission on Rural Labour

NCSEW : National Commission on Self-employed Women and Women Workers

in the Informal Sector

NFSA : National Food Security Act

NREGA : National Rural Employment Guarantee Act

Social Security for Unorganised Workers in India

NSSO : National Sample Survey Organisation

NSSWF : National Social Security and Welfare Fund

NUHHP : National Urban Housing and Habitat Policy

OBCs : Other Backward Castes

PMO : Prime Minister’s Office

RTSSC : Right to Social Security Campaign

SC : Scheduled Caste

SEWA : Self-Employed Women’s Association

SSA : Sarva Shiksha Abhiyan

ST : Scheduled Tribe

TPDS : Targeted Public Distribution System

UPA-I : United Progressive Alliance (2004-09)

UWSSA : Unorganised Workers’ Social Security Act

VIKAS : Vishwakarma Karmik Suraksha Khata

WPC : Working Peoples’ Charter

x
 INTRODUCTION

More than 45 crore workers are presently working Risks of unemployment and
in Indian industries, homes, farms, roads, their own underemployment
homes and every other place where society needs The best example of an informal worker is an
them. However, according to Indian legal norms more individual worker earning a daily income that is
than 42 crore of these workers fall in the category sufficient to provide for his/his daily individual needs
of informal workers who survive on Rs 20 a day -- for the days on which he/she has employment. A
a cruel metaphor for minimal wages and no rights! question that arises here is: How do informal workers
The government needs them to run rails, roads, provide for themselves on the days and in the phases
power houses, ration shops and for almost all the when they do not have employment? Such periods
things it does. Big capital needs them to produce for of unemployment constitute a significant portion of
domestic and international markets and contribute a worker’s lifecycle. For example, during childhood
to India’s GDP growth. Small businesses need before they attain an employable age. Another
them to break-even and expand competitively. The example is a phase when they might want to attain
middle class needs them for clean houses, cooked higher education even after reaching an employable
food, reliable transport, child care and recreation. age. For a woman worker, who is more often than
Big farmers need them to sow, harvest and sell food not denied the chance to get higher education in
grains and agricultural exports. Small farmers need India, childbirth in the youth can prevent her from
them to share the workload on their farms. And the being gainfully employed (we remain cognisant that
Indian Army needs them too, for more or less similar women in India are seldom relieved of unpaid work
reasons. responsibilities of care and other domestic work
even during childbirth). Then, there is the fag end of
The life of informal workers a worker’s life in which he/she might not be able to
These workers exist whenever they are required. They work due to old age or disease.
work on all days of the week, often more than 8 hours
a day mostly without minimum wages in all kinds In addition to these natural phases of possible
of unhygienic and dangerous conditions, residing at unemployment during a worker’s lifecycle, there are
a stone’s throw from their workplace even if it is a periods of unemployment resulting from their inability
dumping ground, largely away from their families as to guard against various kinds of risks including
migrants, without identity or citizenship rights and disease, disability, retrenchment, social conflict and
generally at the cost of their dignity and well-being displacement due to public or private actions. In
literally from the time they are old enough to speak sum, there are myriad natural and artificial scenarios
till the time they die of old age, disability or disease. In in which a worker may not be able to earn enough
the absence of a clearly-defined employer-employee to support his/her daily needs. In addition, there are
relationship the present legislative and policy many other life events and long term needs such as
frameworks do not compel the state to protect and marriage and starting a family, acquisition of movable
promote their incomes. and immovable assets and other social obligations.
Social Security for Unorganised Workers in India

The role of the state social security in India. It builds on existing literature
and analyses to advance some arguments.
We understand that even if informal workers can
provide for their individual selves during periods
Chapter 1 focuses on the demographic and social
of employment, they need additional income and
composition of unorganised workers to underscore
support for periods of unemployment. However, in
a peculiar social reality. The level of economic
2007 the National Commission for Enterprises in the
deprivation and graded marginalisation among
Unorganised Sector (NCEUS) showed that more than
the workers is so far-reaching and historically
two-third of India’s citizens survived on less than Rs
entrenched that precariousness has become a norm
20 a day. Since then not much has been achieved
rather than an exception. The chapter examines
to improve the lives of this impoverished majority,
policy attempts to ascertain the definitional
which often remains invisible in official statistics and
characteristics of unorganised workers through
national accounts. In fact, the most recent estimates
major investigative interventions. It further updates
suggest that it has become even more difficult to
NCEUS’ (2007) enumerative findings to underscore
find employment in India. Moreover, government
the major characteristics of unorganised workers
policies have been directed at the shrinking formal
in India’s population. The sectoral composition of
employment. The Government of India itself is the
the livelihoods of unorganised workers shows a
largest purchaser of contract services that entail
declining share of agricultural employment and rising
low wages and no social security. The share of wage
informality in industry between 1993-94 and 2011-
cost in gross value of output in the Indian economy
12. A critical reality of the labour market in India is
declined sharply from 9 per cent in 1973-74 to roughly
highlighted in the social composition of unorganised
2 per cent in 2011-12. This means that economic
workers, where poverty and vulnerability move with
growth increasingly became capital-intensive,
the historically marginalised identities of Dalits,
workers’ real wages are either stagnant or falling
Adivasis and Muslims irrespective of the sector or
and that rampant informalisation of employment is
employment they move to. While the lack of legal
facilitating downward pressure on the wages of both
protection for unorganised workers’ rights is well
organised and informal workers.
known, this chapter looks at the failure of NCEUS’
historic attempts to regulate their conditions of
As informal work has become the new normal
work and access to social security. In this context,
in a flexible labour market in India, workers face
large-scale migration for work complicates the route
aggravated risks during periods of unemployment.
to policy resolutions of precariousness.
Thanks to the freedom of association and collective
bargaining, formally employed workers have
Chapter 2 tackles some political conceptual debates
traditionally been able to negotiate for state and
inherent in the policy discourse on social security
employers’ support in the form of job security,
in India. It invokes the unrealised constitutional
timely promotions, regular pay, periodic revisions of
vision of social justice where structurally
variable allowances, regulated work hours, paid leave,
normalised precariousness proscribes the means
enhanced pay for overtime work, bonuses, provident
for unorganised workers to organise for their rights.
fund, gratuity, various forms of health, life and
It does not help that modern capitalism has found
disability insurance, maternity benefits and old age
a convenient symbiosis with such structures of
pensions. These protective institutions and measures
adverse socioeconomic inclusion in the mainstream.
are scarcely available to 93 percent of the working
Further, the chapter criticises the artificial distinction
population of India. In fact, the proposed Draft Codes
between ‘work’ and ‘non-work’ based on political
on Labour Laws, if they materialise as legislations,
expediencies of policy. This distinction operates in a
will effectively dismantle these protections even for
system of graded inequality to fragment the working
formally employed workers.
class in a cynical competition for limited resources.
Locating this report In this context, the chapter revisits the parameters of
policy approach to social security.
This report addresses these subjects in four chapters
with the aim of reinvigorating the policy and politics of

2
Chapter 3 lays out the historical trajectory of the understanding how the present dispensation aims to
efforts to legislate on social security for unorganised continue or break from the past approaches to social
workers since the mid-1990s. It critically examines security as outlined in the previous chapters.
the shifts in policy outlook to the constituencies
of unorganised workers since independence. It The appendix gives recommendations on social
includes a brief review of the implementation of the security developed by the Right to Social Security
Unorganised Workers Social Security Act, 2008. Campaign of the Working Peoples’ Charter.

Chapter 4 concludes the report with an appraisal The report seeks to inform the outlook and strategies
of the state’s contemporary attempts in designing of civil society campaigns for social security. It builds
policy for universal social security. This attempt is largely on existing research on the subject and draws
embodied in the 2018 Draft Labour Code on Social from the ongoing efforts of the Working Peoples’
Security and Welfare. While the Draft Code itself Charter in their Right to Social Security Campaign.
is a document under negotiation, it is important in

3
 CHAPTER 1

UNORGANISED WORKERS:
THE NORMALISATION OF A
PRECARIOUS EXISTENCE

Unorganised workers in India are most often determines the intent and extent of provision of social
presented as a complex majority of the working security to them. This is best reflected in the state’s
population identifiable through statistics of poverty, contrasting budgetary approaches to the aspirations
exclusion and fiscal burden. Major government of private big business and the aspirations of the
reports underscore the coincidence of pervasive workers of India. In financial year 2013-14, the
poverty in India with unregulated forms of central government allowed tax concessions to the
unorganised or informal employment. Construction tune of Rs 5,73,000 crore to the corporate sector.
workers, street vendors, domestic workers, fisher This amount is twice the sum required to provide a
folks, agricultural workers, brick kiln workers and slew of social security benefits to more than 40 crore
such employment categories in India are concurrent unorganised workers in one year.1
representations of poverty and vulnerability as well
as the limited success of the state’s social welfare This chapter begins by tracing the evolution of the
policies. Most of this economically marginalised understanding and definition of the unorganised
population also belongs to historically socially sector and workers in three key reports of the central
marginalized categories of women, Dalits, Adivasis, government. In this section, we follow the shift in the
other backward classes (OBCs) and Muslims. state’s view of unorganised workers as politically
Hence, precariousness of labour is not only a market empowered democratic agents of change to a
outcome but it is also a testimony of the persistence perennially destitute majority. In the early decades of
of exclusionary structural features of Indian society. independence, the unorganised sector was seen as
a transitional sector to be gradually incorporated in
We explore these themes by using the statistical the organised category through planned economic
data available on unorganised workers. A conscious and legislative efforts. However, by the turn of
endeavour here is to the recognition of the democratic the 1980s the unorganised sector had acquired a
rights and political agency of unorganised workers in quasi-permanent status in the state’s labour market
state policy and discourse. This owes to the position discourse.
that the prime concern of the provision of a national
minimum social security to unorganised workers is The subsequent sections of the chapter advance
not a technical-economic but a political question. It the discussion focusing on specific features
is the political and moral value placed on the lives of unorganised workers/sector. The sections
of a certain category of citizens by the state that on population size, sectoral distribution and

1. Based on the calculations of the Working Peoples’ Charter (WPC) in 2016-17.

Social Security for Unorganised Workers in India

occupational categories directly correspond to the ambit of protective labour legislations and social
the section on social composition. The enormous security institutions (such as EPFO), perpetuates
population of unorganised workers is a testimony traditional oppression in modern forms. The section
of the failed redistribution of gains of India’s on legal protection presents some corroborative
economic growth, lack of political will by the state findings on laws pertaining to conditions of work and
to pass protective legislations for unorganised social security of unorganised workers.
labour2 and the normalisation of socioeconomic and
political exclusion through its sheer pervasiveness Internal migration further challenges the state’s
across the country. The sectoral distribution of capacity to provide social security to unorganised
unorganised workers coupled with statistics on workers. This chapter cites critical studies that point
their general poverty and vulnerability suggests that to the size and nature of the problem. Uneven regional
the precariousness of work conditions is arguably development has been the hallmark of capitalist
attached to historical social categories irrespective development in India wherein the states with favorable
of their sector of employment. This leads us to the capital investments enjoy economic growth at the cost
social composition of unorganised workers wherein of bypassing sending states in investments despite
we find that those who were oppressed in India their vast reservoirs of cheap labour. Therefore, the
before independence, continue to remain so even in patterns of migration discussed in the section on
independent India. migration also indicate a dependency system among
the Indian states. Unwilling to constructively engage
It is the women, Dalits, Adivasis, OBCs and Muslims with the challenges of internal migration, central
who constitute most of the unorganised workforce. policies lack intent and capacity to balance uneven
Given their nature of employment they remain not regional development, especially by protecting the
only socioeconomically marginalised but they are interests of migrants (and by extension their sending
also excluded from most affirmative action policies3 states) in the dynamic national labour market.
designed with the organised sector in mind. The
fundamental facts of the social composition of We conclude the chapter by recognising that the
the unorganised workforce is enough to argue that condition of unorganised labour in India presents a
‘traditional’ oppressive structures of caste, patriarchy challenge not only for policy but also civil society.
and religion are successfully deployed even in modern Successful political organisation for the rights of
sectors of industry and services to the advantage of unorganised workers has mostly eluded the traditional
capital.4 organisations of labour. As argued earlier, being
‘unorganised’ is as much rooted in the state’s social
By refusing to decisively intervene against this and economic policy as it is in working class politics.
phenomenon, the state demonstrates a peculiar While the state’s failure in guaranteeing national
power of ‘non-decision’ which naturally works to minimum social security for unorganised workers
the advantage of ‘traditional elite castes’ even under has been the subject of many reports and studies, the
globalised capitalism. Rampant privatisation of present report brings out the political aspect of this
erstwhile state domains in the economy and society discussion. This chapter is an exercise in establishing
amounts to practical delegation of governance the fundamental features of the unorganised sector
responsibilities to private entities. Within this and workers who play an instrumental role in shaping
framework, keeping the unorganised workers out of state policies and working class politics.

2. For instance, see the journey of the Unorganised Workers’ Social Security Act, 2008 in this report.
3. For instance, the affirmative action policy of reservation in public sector jobs for Dalits and Adivasis does not extend to the organised
private sector.
4. Harris-White and Gooptu (2001: 90) argue: ‘Work is organized through social institutions such as caste and gender. Capitalism is not
dissolving this matrix of social institutions but reconfiguring them slowly, unevenly and in a great diversity of ways. The matrix still af-
fects the tasks most people do, the kinds, terms and conditions of the contracts they are offered and either settle for or refuse.’

6
 Unorganised workers: The Normalisation of a Precarious Existence

1.1 Definition and Description of the In 1987, the National Commission for Self-Employed
Women pointed to the peculiar plight of unorganised
Unorganised Sector/Workers
women workers confined to drudgery under difficult
The definitions of the unorganised sector and workers
socioeconomic conditions including those of unpaid
in three key reports of the Indian government reflect
family labour. The National Commission for Rural
a rather slow evolution of its understanding and
Labour set up in 1987 added the dimension of the
cognition of the significance and conditions in state
majority of the workforce subsisting in the face of
discourse. In recognition of these workers’ issues
agriculture’s declining capacity to support their
the movement has moved from a passing notice to a
livelihoods and the unavailability of sufficient and
comprehensive realisation of the crises that pervade
suitable non-farm opportunities in rural areas.
their lives owing to government failure to regulate
their working conditions and providing them social
An estimation of the size and features of the
security.
unorganised workers traditionally rested on the
identification of informal enterprises in India. There
In 1969, NCL-I divided the entire Indian workforce
was lack of clarity on the status of those workers
into urban and rural labour- the urban sector was
who could not establish direct employment in either
mainly identified as non-farm employment in the
a formal or an informal enterprise. This resulted in
organised sector and the rural mainly consisted of
obscuring the conditions and status of a large number
agricultural labour. NCL-I did not attempt a definition
of contract workers, self-employed workers and
of the unorganised sector or workers but sought to
casual workers. Some headway was made in shifting
describe the category as:
the basis of the definition of the unorganised sector/
workers from enterprises to forms of employment in
‘those who have not been able to organise in pursuit
a workshop jointly organised by the National Council
of a common objective because of constraints such
for Applied Economic Research (NCAER) and the
as (a) casual nature of employment, (b) ignorance and
Self-Employed Women’s Association (SEWA) in 1997.
illiteracy, (c) small size of establishments with low
It was recognised that ‘the informal sector included
capital investment per person employed, (d) scattered
all workers in informal enterprises, some workers in
nature of establishments, and (e) superior strength of
formal enterprises, self-employed workers, and those
the employer operating singly or in combination’ (GoI,
doing contract work for informal or formal sector
1969: 417).
enterprises and contractors’ (GoI, 2002: 599).

This description is remarkable in foregrounding the

Taking cognisance of the complexity and unresolved
fact that unorganised workers are in fact like all
issues in the earlier debates, NCL-II decided not
other citizens, active agents empowered by a young
to rely on the enterprise-based definition of the
democracy to politically organise for their rights
unorganised sector/workers. Instead it chose not to
guaranteed in the Indian Constitution. By this logic
define the sector altogether but rely on a descriptive
their status of being ‘unorganised’ conveys as much
approach in the identification of unorganised
a political question as a socioeconomic one. Albeit
workers. The description of the unorganised sector/
recognising a limited set of workers in occupation
workers by NCL-II while pointing to their precarious
types and population, NCL-I stressed that while
work and living conditions, notably also included
socioeconomic factors might explain the dismal
the ‘lack of government support’ as a signifier of
conditions of unorganised workers, a resolution
their unorganised status (GoI, 2002: 601). Hence, a
of their issues was ultimately contingent on their
significant improvement in the unorganised category
capacity to politically organise for their rights.
could be effected by suitable state legislations
regulating their conditions of work and guaranteeing
The government’s subsequent commissions and
a minimum level of social security.
reports increasingly leaned towards characterising
the unorganised sector and workers with the
NCL-II did delve into an important nuance of the
conditions of their work and living -- typically
debate surrounding the often inter-changeable use of
precarious work and lack of social security and dignity.
the terms ‘unorganised’ and ‘informal’ to describe the

7
Social Security for Unorganised Workers in India

sector/workers. It referred to scholars’ reservations NCEUS took a major leap in 2007 by attempting to
about using the term ‘unorganised’ since it largely provide clear definitions of the terms ‘unorganised
pertains to a size-based categorisation of enterprises. sector’ and ‘unorganised’ workers. It defined the
It tends to overlook the nature of employment within unorganised sector as:
these enterprises. On the other hand, the term
‘informal’ connotes a plethora of employment types ‘The unorganised sector consists of all
and situations where irrespective of the organised or unincorporated private enterprises owned by
unorganised status of the employing enterprise, the individuals or households engaged in the sale and
worker’s form of employment can be unorganised or production of goods and services operated on a
informal. It also brings into the fold of the informal proprietary or partnership basis and with less than
sector swathes of occupation types that elude ten total workers’ (NCEUS, 2007: 3).
identification in the enterprise-based approach. In
the words of NCL-II: Uunorganised workers were defined as:
‘Unorganised workers consist of those working in the
‘In the broader sense, the number of workers
unorganised enterprises or households, excluding
employed in an enterprise cannot be the basis of
regular workers with social security benefits, and the
defining the unorganised sector because such an
workers in the formal sector without any employment/
enterprise based definition does not take into account
social security benefits provided by the employers’
the vast masses of unorganised labour who work
(NCEUS, 2007: 3).
as agricultural workers, cultivators, construction
workers, self-employed vendors, artisans, traditional
These definitions undoubtedly constitute a
crafts persons, home-based workers, traditional
commendable attempt to crystallise and resolve
service workers, workers depending on the common
key longstanding debates on definitional and
property resources such as forests and fisheries and
statistical issues5 regarding the unorganised sector/
others. Almost the entire non-agricultural activity in
workers. They successfully widen the coverage
rural India is unorganised. All these sectors are mostly
of the unorganised category to accommodate the
unorganised in terms of organisation, employment
hitherto excluded income-generation activities as
and labour participation’ (GoI, 2002: 601-602).
pointed out by NCL-II as well. However, given the
vast size and internal diversity of the unorganised
NCL-II also pointed out that there were deep
sector/workers, no definition can encapsulate all key
interlinkages between the unorganised and the
descriptions of the category. With this in mind, the
organised sectors in the globalised Indian economy
subsequent sections of this chapter discuss certain
wherein neither sector can be understood in isolation
key features of the unorganised sector/workers. The
from the other. This fact notwithstanding, protective
discussion in this chapter is limited to laying out the
legislations for labour in the organised sector almost
fundamental features of unorganised employment
generally deny similar protections to unorganised
in key statistics. The next chapter is dedicated to
labour in India.
deepening an understanding of the state’s approach
towards unorganised workers as implicit in its reports
With no regulation of their working conditions by the
and policies.
state and the dismal living conditions of a majority
as the Indian labour market was expected to become
more flexible under liberalisation policies, NCL-II
1.2 Population Size
stressed on the need for an umbrella legislation to The enormous population size of unorganised
offer basic minimum social security to unorganised workers is a testimony to the failed redistribution
workers. of gains of India’s economic growth, the lack of
political will to pass and effectively implement

5. While this report does not go into the nuances of the statistical issues related to the informal economy, a detailed review of these issues
by NCEUS can be found at: http://nceuis.nic.in/Report_Statistical_Issues_Informal_Economy.pdf

8
 Unorganised workers: The Normalisation of a Precarious Existence

protective legislations for unorganised labour and at the cost of organised employment. Two,
the normalisation of socioeconomic and political employment generation rates are unable to match
exclusion through its sheer pervasiveness across the rate of increase in the workforce.7 The saga of
the population. The features of marginalisation ‘jobless growth’ has continued from the UPA regimes
and the unorganised nature of the workers obtain to the present NDA government.8 Three, given these
normalisation in the sheer size of the population. two features, there is a marked scarcity of jobs in the
Indian labour market, particularly those that can offer
Through rigorous statistical exercises, NCEUS decent living standards.
established that approximately 92 percent of India’s
workforce remained in the unorganised sector/ 1.3 Sectoral Distribution of
employment as of 2004-05 (NCEUS, 2007: 4). The Unorganised Workers
Right to Social Security Campaign (henceforth RTSS)
The sectoral distribution of unorganised workers
updated the population estimate by using 2009-
coupled with statistics of their general poverty and
10 figures. We find that the proportion of informal
vulnerability suggests that precariousness of work
or unorganised workers remains above the earlier
conditions is arguably attached to historical social
NCEUS estimates at 92.83 percent of the total
categories irrespective of their sector of employment.
workforce of 46.02 million (Table 1.1).

The majority within the category of unorganised

Figure 1.1 shows a marginal increase in the number
workers historically subsisted in the agrarian
of unorganised workers and the simultaneous decline
sector. As labour moved out of agriculture (even if
in the number of workers in organised employment.
seasonally) to the industry and services sectors,
the unorganised nature of their work remained
Moreover, there was a noticeable increase in
largely unchanged (Figure 1.3). The most precarious
unorganised employment within the organised sector
features of agricultural employment including low
(Figure 1.2).
wages, unregulated conditions of work and lack of
social security persist in the new sectors. This can
By 2014-15, the number of workers employed in
be read as the state’s approach to certain sections of
India had increased to 47.29 crore with the number
the population, mainly women, Dalits, Adivasis, OBCs
of unemployed workers at 1.08 crore. The ILO notes
and Muslims. It does not matter if these sections find
that employment in the unorganised sector declined
employment in agriculture or in the so-called modern
from 86.3 percent in 2004-05 to 82.2 percent in 2011-
sectors of industry or services. The denial of their
12. At the same time, informal employment within the
entitlements by the state also moves with them.
organised sector rapidly rose. The net effect of these
changes was that the share of unorganised workers
in the total workforce remained stagnant at around
1.4 Social Composition of the
92 percent in 2011-12. Within the overall category Unorganised Workforce
of informal workers, the largest group was own- The social composition of unorganised workers
account workers (32.2 percent), followed by informal shows that those who were oppressed in India
employees in the informal sector (30.0 percent) and before independence; continue to remain so even in
contributing family workers (17.9 percent).6 independent India. Women, Dalits, Adivasis, OBCs
and Muslims constitute most of the unorganised
In this context, it is important to note three salient workforce. Given their nature of employment they
features regarding the workforce and employment remain not only socioeconomically marginalised but
scenario in India. One, almost all the growth in are also excluded from the most affirmative action
employment is unorganised employment, apparently policies designed with the organised sector in mind.

6. http://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/---sro-new_delhi/documents/publication/wcms_496510.pdf
7. http://www.thehindu.com/opinion/op-ed/job-growth-at-a-snails-pace/article8581472.ece
8. http://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/---sro-new_delhi/documents/publication/wcms_496510.pdf

9
Social Security for Unorganised Workers in India

Table 1.1. Population Size Estimates of Unorganised and Organised Workers in the Indian Workforce

Sector 1999-2000 2004-05 2009-10

Informal Formal Total Informal Formal Total Informal Formal Total
Unorganised No. of workers 34.13 0.14 34.27 39.35 0.14 39.49 38.51 0.23 38.74
Sector (in crore)
Percentage 99.59 0.41 100 99.65 0.35 100 99.41 0.59 100
Organised No. of workers 2.05 3.37 5.42 2.91 3.34 6.25 4.21 3.07 7.28
Sector (in crore)
Percentage 37.82 62.18 100 46.56 53.44 100 57.83 42.17 100
Total No. of workers 36.18 3.51 39.69 42.26 3.48 45.74 42.72 3.3 46.02
(in crore)
Percentage 91.16 8.84 100.00 92.39 7.61 100.00 92.83 7.17 100.00
Source: NSSO and calculations done by the RTSS team.

Figure 1.1. Marginal changes in the population size of unorganised and organised workers

Total No. of informal workers in crores

Total
50 42.26 46.02
45 42.26 42.72
39.69
40 36.18
35
30
25
20
15
10
3.51 3.48 3.3
5
0
Informal Formal Total Informal Formal Total Informal Formal Total
1999-2000 2004-05 2009-10

Source: NSSO and calculations done by the RTSS team.

Figure 1.2. Increased informality in the organised sector

Inrease in unorganised employment in the organised sector (in %)

Organised Sector

120
100 100 100
100
80
62.18 53.44 57.83
60 46.56
37.82 42.17
40
20
0
Informal Formal Total Informal Formal Total Informal Formal Total

Source: NSSO and calculations done by the RTSS team.

10
 Unorganised workers: The Normalisation of a Precarious Existence

Figure 1.3. Different aspects of structural transformation and sectoral employment shares (%), 1993-94 to 2011-129

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1993-94 2000-10 2011-12 1993-94 2009-10 2011-12
Rural Urban
Agriculture Agriculture Services

Source: National Simple Survey, various rounds.

A commendable contribution of NCEUS was for poverty and vulnerability where nearly 55 percent
the correlation of poverty and vulnerability of a of even those who do not belong to historically
majority of the Indian population with its status as marginalized categories of Dalits, Adivasis, OBCs and
unorganised workers; 79 percent of the roughly 423 Muslims are also poor and vulnerable by their sheer
million unorganised workers in 2004-05 belonged to informal status of employment.
the category of poor and vulnerable (NCEUS, 2007:
7). A notable feature of this poor and vulnerable Further, Dalits (61.5 percent) and Adivasis (25.1
population is that a majority belongs to the historically percent) constitute the highest proportion in the
marginalised social categories of Scheduled Castes category of bonded labour (NCEUS, 2007: 105).
(Dalits), Scheduled Tribes (Adivasis), OBCs and Constituting significant majorities among agricultural
Muslims. NCEUS found that of the total population labourers, Dalits and Adivasis are also considered
of various social groups within the unorganised the most vulnerable within this major occupational
workers’ category, 88 percent Dalits and Adivasis, 80 category (NCEUS, 2007: 121). Their vulnerability
percent OBCs and 84 percent Muslims were poor and remains high even if they belong to a slightly better
vulnerable in their economic status. off category of small and marginal farmers. In
agriculture, the Dalits, Adivasis and OBCs are also
It must be noted that these patterns of socioeconomic highly dependent on informal sources of financial
exclusion are historical fact of Indian society. lending which are known to perpetuate exploitative
They mark significant continuity in identity- terms of transactions often responsible for debt traps
based exploitation and the conspicuous failure of and inter-generational bondage (NCEUS, 2007: 136).
state policy in overcoming this despite express
constitutional commitments. It needs to be noted NCEUS paid special attention to the specific
that NCEUS only takes into account the parameters conditions of Muslim workers whose land-holding
of an official poverty line that has remained highly status, educational status, economic backwardness
contentious for its method of estimation as well as for and general labour market vulnerabilities placed them
its failure to account for multi-dimensional poverty closer or below the conditions of Hindu Dalits. NCEUS
in India (NCEUS, 2007: 8). This data also reveals that found that Muslims -- both OBCs and other men and
unorganised employment itself is a practical marker women -- were highly unlikely to find employment in
the organised sector in India (NCEUS, 2007: 21). They

9. http://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/---sro-new_delhi/documents/publication/wcms_496510.pdf

11
Social Security for Unorganised Workers in India

Table 1.2: Percentage distribution of expenditure classes by social identity,

informal work status and education (2004-05)

Social Categories
Sl.No. Economic Staus Education
(Percentage share in own total)
(Percentage of
STs/SCs Others Un-organised
All OBCs All Muslims Primary
(with out STs/ Workers)
except except STs/ Illitterates and below
SCs, OBCs and
Muslims SCs primary
Muslims
1 Extreemely 10.9 5.1 8.1 2.1 5.8 8.1 5.0
Poor
2 Poor 21.5 15.1 19.2 6.4 15 19.0 14.2
3 Marginlly Poor 22.4 20.4 22.3 11.1 19.6 22.2 19.4
4 Vulnerable 33 39.2 34.2 35.2 38.4 36.9 40.0
5 Middle income 11.1 17.8 13.3 34.2 18.7 12.8 18.9
6 High income 1 2.4 2.2 11 2.7 1.0 2.5
7 Extreemly poor 32.4 20.3 27.4 6.5 20.8 27.1 19.2
and poor (1+2)
8 Marginal and 55.4 59.6 57.1 46.3 57.9 59.1 59.4
Vulnerable
(3+4)
9 Poor and 87.8 79.9 84.5 54.8 78.7 86.2 78.6
Vulnerable
(7+8)
10 Middle and 12.2 20.1 15.5 45.2 21.3 13.8 21.4
High Income
(5+6)
All 100.00 100.00 100.00 100.00 100.00 100.00 100.00
All (Million) 302 391 138 252 423 270 164
Note 1: Refers to person aged 15 and above.
Source: 61st Round 2004-2005, Employment-Un employment Survey: Computed.
Source: NCEUS (2007: 7).

fared worse than Hindu Dalits and Adivasis who made 1.5 Legal Protection for
limited gains in employment due to affirmative action
Unorganised Workers’ rights
policies. Both Muslim men and women predominantly
By refusing to decisively intervene against the
rely on self-employment for their livelihood, indicating
deployment of ‘traditional’ oppressive structures
a peculiar pattern of religious discrimination in the
of caste, patriarchy and communalism in the
Indian labour market (NCEUS, 2007: 22). Along with
labour market to the advantage of capital, the state
Adivasis, Muslims see the highest incidence of child
demonstrates a peculiar power of ‘non-decision’. It
deprivation labour wherein economic deprivation is
naturally strengthens the position of ‘traditional elite
seen associated with incidence of child labour and
castes’ even under globalised capitalism. Rampant
out-of-school children (NCEUS, 2007: 101). This
privatisation of the erstwhile state domains in the
fact alone jeopardises not only the present but also
economy and society amounts to practical delegation
the future well-being of the Muslim community as a
of governance responsibilities to private entities.
whole. NCEUS has taken due note of the recent and
Within this framework, keeping the unorganised
parallel efforts at understanding the challenges to the
workers out of the ambit of protective labour
well-being of the Muslim community including that
legislations and social security institutions (such as
of the Sachar Committee’s findings. Its own findings
EPF), perpetuates traditional oppression in modern
about the Muslim community from the labour market
forms.
perspective closely complement and corroborate the
assertions of the Sachar Committee report.
It is a well-known fact that the Directive Principles
of State Policy (DPSP) in Part IV of the Indian

12
 Unorganised workers: The Normalisation of a Precarious Existence

Constitution lay down broad goals for policy-based 1.7 Social Security
assurances of decent conditions of work and social NCEUS published a separate report dedicated to the
security for all workers in India. It is thanks to the issue of social security of unorganised workers in
constitutional vision enshrined in these principles, the 2006. It found that the social security framework in
many international conventions, particularly ILO’s, India operated at three levels between central and
that have been ratified by India and the interventions state provisions. Level one consists of universal
of the organised working class movements, that programmes and schemes for basic social or human
the Parliament and state governments have passed development as in literacy, healthcare, drinking water
multiple legislations to regulate the conditions of and sanitation. Level two consists of social and human
work and social security mechanisms for labour development schemes and programmes targeted
in India. We now present NCEUS’ findings that the at the socioeconomically weaker sections of the
protective cover of these legislations by and large population irrespective of their employment status.
excludes all the unorganised workers. The third level, as per NCEUS should be constituted
of a national minimum social security programme for
1.6 Conditions of Work unorganised workers. Till 2008, the third level mainly
NCEUS did a detailed review of existing central consisted of the various occupation-specific welfare
legislations for regulating conditions of work in the boards/funds and some social security schemes set
country. It found that the existing laws can be broadly up at the central and state levels to provide relief
divided into three categories -- laws applicable to all to some key employment sectors of unorganised
sections of unorganised workers; laws applicable workers. In 2008, the central government enacted the
to some sections of unorganised workers; and laws Unorganised Workers’ Social Security Act (UWSSA)
which can be applicable to unorganised workers that envisaged a federal set-up for formulating,
subject to relaxations in employment criterion. delivering and monitoring social security benefits to
The review went on to examine each of the central unorganised workers across the country. The Act,
laws for their potential application for unorganised however, remains largely unimplemented till date. As
workers and found limited import for the interests of a result, the many recommendations of NCL-II and
unorganised workers. NCEUS notwithstanding, unorganised workers in
India remain devoid of social security.
In addition, NCEUS also took note of the legislative
efforts at the state level that attempt to regulate the 1.8 Migration
conditions of labour including those in unorganised Uneven regional development has been the hallmark
employment. It made special mention of the Kerala of capitalist development in India wherein the
Agricultural Workers’ Act, 1974 and the Maharashtra states with favourable capital investments enjoy
Mathadi, Hamal and Other Manual Workers’ economic growth at the cost of sending states
(Regulation of Employment and Welfare) Act, 1969. thanks to their investments despite vast reservoirs
It found the scope of Shops and Establishments Act of cheap labour in the sending states. Therefore, the
in its various state-level versions to have limited patterns of migration discussed in this section also
coverage of the unorganised workers’ populations in indicate a dependency system among the Indian
the states (NCEUS, 2007: 163). states. Unwilling to constructively engage with the
challenges of internal migration, central policies
In sum, the NCEUS report found that the existing lack intent and capacity to balance uneven regional
regulatory framework for labour conditions caters development, especially by protecting the interests of
almost exclusively to organised workers and very migrants (and by extension their sending states) in
small sections of unorganised workers in specific the dynamic national labour market.
cases. In its view, the regulations that exist are
not suited to the specific needs of unorganised Large scale internal and international migration of
workers. Even if some suitable regulations exist, the workers for employment is a common feature of the
dismal state of their implementation leaves most of Indian labour market. It can also be argued that given
the unorganised workers out of the ambit of legal the involvement of frontier national agencies of more
protection when it comes to their conditions of work. than one country in the processes of international

13
Social Security for Unorganised Workers in India

labour migration, there is a semblance of regulation of widely known that migrants, particularly seasonal
the basic conditions of migration. ILO has been able ones, are employed at the bottom of the ladder in the
to develop an 11-stage formula for understanding and most arduous, insecure and lowest paying jobs.
advocating regulatory mechanisms in the process
of international migration. However, unfair labour Migration Corridors. Agricultural workers and their
practices and frequent cases of human trafficking family members often migrate from rural areas
are still common risks faced by workers seeking of eastern Uttar Pradesh and Bihar to the farms
international employment opportunities. Many of Haryana and Punjab. This is one of the most
national and international actors are deeply engaged important rural-rural migration corridors in India. The
in advocating policies for minimising these risks. rural-urban migration corridors lead from regions of
low industrial development like Jharkhand, Odisha
Internal Migration and Unorganised Employment. In and West Bengal to modern urban agglomerations
this report we focus on internal migration of labour of industry such as Mumbai, Delhi-NCR, Surat and
between and within the states and territories of Bangalore (see Map).
India. This links directly to our agenda of achieving
social security for workers under the jurisdiction of Migrant Population. It is difficult to directly arrive at
the central government. It has been recognized both an estimate of the migrant population in India using
in NCL-II and in NCEUS reports that the majority of standard statistical sources like the Census and
the poor, migrant workers inevitably find work in the NSSO. Some broad estimates of internal migration
unorganised sector in destination areas. It is also in India are available only in Census 2001 and the

Migration corridors for internal migration

Source: http://www.migrationpolicy.org/article/internal-labor-migration-india-raises-integrtion-
challenges-migrants

14
 Unorganised workers: The Normalisation of a Precarious Existence

2007-08 National Sample Survey (NSS). According 1.9 Conclusion

to the 2001 Census data, India had about 191 million
This chapter laid out the salient features of conditions
internal migrants differentiated into categories of
of life and work of unorganised workers in India.
inter-district migrants (76.8 million) and inter-state
The numerical majority of the Indian workforce is
migrants (42.3 million). The Census data does not
unorganised. Its vast population, occupational,
provide a clear distinction between temporary and
socioeconomic, cultural and regional diversity pose
seasonal migration. On the other hand, the NSS data
a paramount challenge to its political organisation
places the number of short-term migrants at 15 million
despite the increasingly dismal living conditions of
which can be contested as a gross underestimate by
this population. Its majority character coincides with
other sources that place the number at 100 million
most of the social identities which are historically
(Abbas and Varma, 2014).
socioeconomically marginalised. Its unorganised
nature is evidence of the calculated exercise of the
The major reason for migration among women is
power of non-decision making of the Indian state
marriage (70 percent of female migrants). However,
favouring the sustenance of the traditional elites in old
this does not conceal the fact that many of these
and new structures of social power. The features of
women do participate in the labour market as migrant
marginalisation and their unorganised nature obtain
workers as well. On the other hand, male migration is
normalisation in the sheer size of the population. The
mostly in search of employment wherein 56 percent
occupational diversity and employment relations
of urban male migrants are known to have migrated
inevitably obey a top-down logic wherein the political
for work. It is also noted that high-vulnerability
and economic decisions of the elites determine
inducing short-term migration is more frequent
almost all aspects of informal workers’ lives.
among socially deprived groups of Dalits, Adivasis,
women and children (NCEUS, 2007: 96).
The reality of profound internal social and cultural
gradation within the population of unorganised
Given the lack of details and clarity in estimates on
workers is instrumentalised in a cynical hierarchy
migration from these sources, one would do well
of oppression and exclusion across gender, caste,
to incorporate the learnings of other micro and
religion, linguistic and class lines. In this, certain
macro studies that reveal significant participation
sections of the oppressed population take part
of migrant labour in India’s economy. By one
in oppressing other categories within the larger
estimate, seasonal migrants contribute as much as
framework of the liberalised political economy. In
10 percent to India’s GDP (Deshingkar and Akter,
effect, graded inequalities based on caste promote
2009). Other studies point out that leading sectors
complex internal differentiations in the working
of informal employment in India’s economy such
population.
as construction, domestic work, textile and brick
manufacturing, transportation, mining and quarrying
Moreover, the phenomenon of migration dynamically
and agriculture are main destinations for migrant
alters the articulation of the oppressive systems
labour (Abbas and Varma, 2014). Migrant workers
into ever new forms to the extent where preliminary
typically suffer more difficult conditions of work and
perceptions fail to identify the essential continuity of
high levels of insecurity even in the organised sectors
exclusionary structures of caste and patriarchy. On
of manufacturing (Sen and Dasgupta, 2009). Their
the other hand, the limited capacity of formal political
conditions of living are highly precarious given the
institutions and civil society platforms to organise
failure of urban planners to accommodate their needs
and represent informed views of such a vast and
in the expansion of industrial agglomerates (NCEUS,
mobile population further hamper prospects of any
2009; Samaddar, 2015). The overall conditions
improvements.
of life and work of migrant workers coupled with
unregulated employment systems that force many of
In the next chapter, we delve deeper into the political
them into debt traps effectively constitute conditions
nature of the issues concerning unorganised workers
of forced labour in many industries such as brick
and the role of state policy in perpetuating their
kilns (Majumder, 2015).
marginalisation.

15
 CHAPTER 2

THE MEANING AND

REALISATION OF THE RIGHT
TO SOCIAL SECURITY

‘‘Ask those who are unemployed whether what are employment. These workers constitute the numerical
called fundamental rights are of any value to them. majority of the Indian population today. Four-fifth
If a person who is unemployed is offered a choice of them can be classified as poor and vulnerable by
between a job of some sort, with some sort of wages, the most reductionist standards of measuring only
with no fixed hours of labour and with an interdict on economic poverty. Denied the protection of most of
joining a union and the exercise of his right to freedom the labour laws, unorganised workers surrender their
of speech, association, religion, etc., can there be any fundamental rights and dignity to survive on a day-to-
doubt as to what his choice will be? How can it be day basis. Denied a formal identity as workers, they
otherwise? The fear of starvation, the fear of losing are confined to invisible drudgery in the underbelly
a house, the fear of losing savings, if any, the fear of of industrial agglomerations, the dying farms of rural
being compelled to take children away from school, India, construction sites in small towns and cities and
the fear of having to be a burden on public charity, almost everywhere across the country in a national
the fear of having to be burned or buried at public blind spot of social policy planning.
cost are factors too strong to permit a man to stand
out for his fundamental rights. The unemployed are Constituting the vast reserve army of labour, they
thus compelled to relinquish their fundamental rights are pitted against each other to depress wages and
for the sake of securing the privilege to work and to impose inhuman conditions of work. In this ruthless
subsist,’ Dr B. R. Ambedkar (cited in Jayal, 2013: 148- competition for survival, the only resource they can
149). muster to outstrip the others, besides reducing the
cost of their labour power, is their primordial identities
Ambedkar’s words from his famous ‘Memorandum of caste, gender and religion. These primordial
and Draft Articles on the Rights of States and identities play a destructive role in propelling a
Minorities’ of 1947, have lived on to most powerfully hierarchy of exclusion within the unorganised
describe the precarious existence of unorganised workers. Excluded from most redistributive gains
workers in 21st century India. Borne out by of economic development, deprived social groups
statistics presented in the first chapter, we reiterate fight each other in the name of caste, religion and
some general features of the unorganised workers’ region in desperate attempts to corner the scarce
population of contemporary India. employment opportunities and social benefits. And
in this conundrum, the idea that dies a slow death is
Long and uncertain periods of unemployment and the dream of building ‘The United States of India’ that
underemployment are a regular feature of unorganised Ambedkar so deeply cherished.
workers’ lives due to irregularity and non-availability of
Social Security for Unorganised Workers in India

It is also not uncommon to see vested interests Fundamental Rights, social and economic rights
feeding on divisive tendencies both in rhetoric which include the right to social security have
and in policies. The debates around caste-based been relegated to the non-justiciable category of
reservations, migrant workers in Mumbai and Delhi, the Directive Principles of State Policy (DPSP). It is
religious minorities’ claims for special attention in DPSP’s vision that all the citizens of India should be
policy or simply the demand for old age pensions have afforded a minimum level of social security by the
all seen the political elites excusing state failures and state.
pitting one social group against another in a fight for
space in welfare and redistributive policies. Since the ‘The Directive Principles call for the state to provide
struggle for social and economic welfare has been for adequate means of livelihood; within the limits
abstracted from concrete parameters of well-being to of its economic capacity and development, make
a politically constructed competition between social effective provision for securing the right to work,
identities over artificially limited fiscal resources of to education and to public assistance in cases of
the state, politics in India sees the denial of benefits unemployment, old age, sickness and disablement,
to one group as a victory for another group, even if and in other cases of undeserved want’ (Article 41);
the latter has not materially gained from the denial. make provisions for the ingredients of decent work in
So upper castes are made to believe that there is an terms of conditions of employment and a living wage
automatic gain in their employment opportunities if (Articles 42 & 43); and ‘regard the raising of the level
reservations are denied to the socially marginalized of nutrition and the standard of living of its people
groups even if the material background is an overall and the improvement of public health as among its
decline in the availability of employment opportunities primary duties’ (Article 47) (Srivastava, 2013: 16).
in the economy.
For the successful realisation of DPSP’s vision, it is
Similarly, deprived sections of the Hindu population of utmost important that the core features of political
are made to believe that religious minorities in the democracy are adhered to in the polity. Ambedkar
country are cornering disproportionate resources in outlined them as: ‘that the individual is an end in
the economy leading to their deprivation. In effect, the himself, that the individual has inalienable rights
political class is perennially engaged in rescuing the guaranteed by the Constitution; that the individual
state from its constitutional and social obligations of should not have to relinquish any of these rights as
welfare for all. Therefore, it has been an uphill task a condition of receiving a privilege; and that the state
for workers to reorient the discourse to universal should not delegate its powers to private persons
guarantee of social and economic rights as a simple to govern others’ (Ambedkar cited in Jayal, 2013:
citizenship entitlement. 148). The description of the conditions of life and
work in the first chapter, besides some familiarity
However, there has been a positive transformation in with the dominant discourse of ‘economic growth’ is
the discourse on social and economic rights through sufficient to realise that most of the conditions for a
progressive Supreme Court judgments since the functional political democracy are presently strained
1980s and civil society movements around the right if not absent in India. Most importantly, there is a
to work, food and education over the last couple of de facto devolution of governance responsibility to
decades. private capital/persons under the present sway of
free market ideologies.10 Contemporary polities the
In the Indian Constitution, while civil and political world over are witness to the transformation of the
rights have been enshrined as justiciable in the state from a guarantor of democratic rights to a mere

10. See, for instance, Cowan’s (2015) article, ‘Fragmented Citizenships in Gurgaon’ in which he discusses how democratic institutions are
routinely bypassed in governance and urban planning. As the state has withdrawn from its traditional mediator role between capital and
labour, workers have to inevitably negotiate their citizenship entitlements as paid services from private entities. ‘For the majority of Gur-
gaon’s history, official governance of the city has been shared between the state commissioner, the zilla parishad, and HUDA, a situation
of centralisation which, through bypassing the obfuscations of regular democratic representation, provided the state commissioner and
private developers space to develop the city untroubled by democratic procedure.’

18
 The Meaning and Realisation of the Right to Social Security

facilitator of the agenda of private capital. Citizenry, There is scholarly engagement with issues of the
en-masse, particularly the working classes, are definition of work and their role in determining the
suffering disenfranchisement and are unable to raise exclusion or inclusion of certain sections of the
popular demands through democratic channels population, particularly women. The latest among the
(Harris, 2012: 30). government’s landmark reports, the NCEUS report,
takes note of the inadequacy of existing official
It is in this backdrop that the demand for a national databases such as the Census and NSSO in accurately
minimum security must be raised. As subsequent enumerating and describing the conditions of life and
sections of this chapter discuss, the notion of social work of unorganised workers. Many scholars have
security and its constituent elements have been widely before and since pointed to the lack of effort on the
debated in global and Indian civil societies. There is part of the government to bridge this knowledge gap
recognition of the past efforts of the Indian state for despite the recommendations of successive labour
providing fragmented and minimal social security commissions and others. It can be safely argued that
through a plethora of schemes and legislations. despite NCEUS and others’ best efforts at investigating
However, there is also a general realisation that and identifying the categories of unorganised workers,
many of these efforts have failed to produce desired we are unable to identify all workers with their
outcomes. We saw in Chapter 1 that most of the diverse positions and social security requirements
Indian unorganised workers are subsisting under in an exhaustive manner. Hence, the risk of large
acute social and economic distress. Therefore, a scale exclusion of various categories of unorganised
compelling case can be made for comprehensive workers from policy frameworks persists.
social security provisions to be made to all people
at the earliest. Concrete proposals for this have Here, we do not go into the debates around developing
been made by high level government committees as existing and new statistical systems to overcome the
well as in a 2008 Act.11 Before we assess the import challenges. It is nonetheless imperative to underscore
and success of these proposals and Act, it would some conceptual and political fallouts. To attempt a
be instructive to outline the parameters of such an division of the population between workers and non-
assessment from the point of view of this report workers effectively sustains the invisibility of unpaid
work largely carried out by women. At the same time, it
2.1 All Citizens as Workers is also likely to result in policy loopholes where states
of unemployment, underemployment and unpaid
The first chapter discussed the difficulties in
work remain unaddressed. As argued before, these
identification, definition and description of unorganised
states constitute regular features of the life-cycle of
work. The efforts made so far by government
unorganised workers owing to macroeconomic factors
commissions have centered their descriptions around
and both social and personal vulnerabilities.
three core features of unorganised workers -- lack
of political organisation, precarious conditions of
work and living and lack of access to social security In the case of NCEUS and its proposed bill for the social
and other protective institutions of the state. Besides security of unorganised workers, it has been pointed
these general features, there is also an attempt to out that in its attempt to fit the target population to its
identify the workers as belonging to various sectors definition of unorganised workers, NCEUS has left out
of employment such as agriculture, construction, more than 85 million unpaid family workers and about
manufacturing, home-based production, domestic 14 million farmers from the proposed social security
work and so on. Traditional categorisations of the cover (Neetha, 2006: 3498). In doing this, NCEUS has
workforce into rural and urban or agricultural and provided a major setback to its own stated purpose
non-agricultural are gradually giving way to a broad of recommending social security provision for ‘all’
distinction between organised and unorganised, with unorganised workers. This problem is understood as
the former progressively diminishing in size. much as an issue of catering to the dominant policy
consensus on targeting benefits and limiting the fiscal

11. Reviewed in detail in Chapter 3.

19
Social Security for Unorganised Workers in India

burden as of trying to fit the social reality of ‘work’ 2.2 State Paternalism and
into neat brackets that are fiscally and politically
Structural Transformation
convenient for policymakers.
The Indian Constitution does not provide its citizens
social and economic rights which include the right
We are made aware in debates around women’s
to social security. Citizenship status in India only
work that pre-existing notions of work drawn from
guarantees civil and political rights. Therefore,
mainstream economics have traditionally failed to
the state in India has historically resorted to the
recognise personal and relational aspects of work
construction of ‘exceptional’ categories to deliver
(Himmelweit, 1995: 2) and by extension critical social
social and economic welfare. These categories may
relations that shape the nature and outcome of work.
include conceptual varieties of the poor, women,
That women and other such workers do not act as
children and socially marginalised groups on a case
model self-seeking, goal-oriented maximisers, is not
by case basis. The formation and existence of each
a problem with the workers’ behaviour but with the
of these categories is in itself a testimony to the
theories that attempt narrow compartmentalisation
insufficiency of the civil and political rights to attain
of complex social realities. The result of this problem
full citizenship without social and economic rights.
is that a large productive section of society is
It is by establishing extreme levels of vulnerability
categorised as ‘non-workers’ in theory. In practice,
that these categories are expected to establish their
policies unproblematically relegate this population to
‘needs’ and not ‘rights’ for welfare provisions. Even
the category of ‘dependents’ whose welfare concerns
after their needs have been credibly established and
then turn into a burden on the remaining members of
articulated, the state is not obliged to provide for
society.
these under the law of the land. We see from NCL-I
to NCEUS that despite the repeated demonstration of
We contend that a simple fact of the life of working class
the poor and vulnerable state of unorganised workers,
people in India is that there is no survival without work
the response from the state has been fragmented and
(Jhabvala, 1998: L-7). Neither the state nor society in
ineffective at best.
India have historically redistributed resources in a way
that enables people to survive without working be they
This situation primarily owes to the original failure of
children, old persons or the disabled. Therefore, an
not making social and economic rights justiciable in
artificial construct of ‘non-work’ or ‘dependent’ should
the Indian Constitution. It was done with the ‘alibi of
definitely not create another fault line in society. Such
underdevelopment’ and the promise of ‘progressive
a categorisation is highly demeaning and socially
realization’ (Jayal, 2013: 165, 168). This allowed
unjust.
political parties and the government unlimited
flexibility in deciding the content of social welfare,
In sum, we are of the position that all citizens are
the criteria for eligibility, the accountability structure
workers as long as contingencies such as sickness,
for outcomes and the financial commitment to social
maternity, employment injury, unemployment,
welfare (Jayal, 2013: 165). The contestations on
invalidity, old age, death, the need for long-term
these issues have continued since independence till
medical care and supporting families with children,
date, revived every time a piecemeal policy measure
do not proscribe their participation in the labour
for social welfare is demanded or proposed. The
market (See NCEUS, 2006: 16). If there are any citizens
contestations, notably, are not only conceptual
who forego participation in productive and socially
or ideological, but also deeply entrenched in the
reproductive activities owing to positive contingencies
electoral incentive structures of political parties for
such as abundance of wealth, they are a numerically
their respective vote banks.
negligible minority in the population. Therefore, if the
state is sincere in at least notionally expanding its
‘Even as welfare appears to stand outside the domain
understanding of ‘work’ as discussed earlier, it would
of political contestation, electoral populism—from
not shy away from realising that almost all citizens of
promises of subsidized rice and clothes in the 1970s,
India are workers in some capacity or the other.
to free water and electricity to farmers in the 1980s,
to television sets and notebook computers today—is

20
 The Meaning and Realisation of the Right to Social Security

projected and received as a form of welfare, even if relief to trigger a progression in public discourse and
it is part of a top-down regime of political incentives action on structural issues. NCL-I saw the collective
in elections, and entrenches further the relationship political agency of the workers as an engine for
between the citizen and her elected representatives as the transformation of their own state. However,
one of giver and receiver, benefactor and beneficiary’ Ambedkar cautioned us against making unfair
(Jayal, 2013: 169). expectations of a working population that is trapped
in deeply oppressive social relations. The loss of a
The limited philosophy of social welfare in India few days of wages may cause irreparable damage
has been mired in the ideas of charity and state in an unorganised worker’s life. These workers cope
paternalism. These promote regressive social with perennial social and economic risks to their
relations based on clientelism that suffocates the lives without any safety nets or support structures.
potential for social transformation. Social and They are unable to afford additional risks attached
economic welfare when received as state largesse and with political organisation in the face of traditional
not rights-based entitlements does not advance the structures of social power. Moreover, pervasive
integration of the marginalised into the mainstream. vulnerability in society tends to normalise the state
Instead the construction of ‘exceptional categories’ of deprivation, submission to exploitative systems
for disbursal of social welfare based on political and above all a deep pessimism about a dignified
discretion undermines the equalising agenda of existence. Therefore, political rights in a democracy
citizenship. The ‘beneficiaries’ of such a social policy can only be meaningfully exercised when social and
are reduced to a lower level of citizenship frozen in economic rights exist to ensure survival with dignity.
that state by the category tags that do little to address
the sources of their vulnerability. For instance, it This report views the right to social security as
has been argued that the adoption of a monolithic a conduit for activating political agency among
construct of ‘unorganised workers’ in state policy may unorganised workers. It is a starting point for public
prove counter-productive. One, it de facto attributes action for larger structural changes that will address
a permanent status to the unorganised category root causes of poverty and vulnerability. To make
which has been promised progressive inclusion in the this beginning we need to first exit the entrenched
organised category with all attendant benefits since structures and discourse of a paternalistic state.
independence. Effectively, it may suggest a tacit Workers need to be seen and planned for as
legitimisation of rampant deregulation of the labour citizens with social and economic rights and not
market promoting casualisation of labour (Kerswell as beneficiaries. The aspirations of social security
and Pratap, 2016: 229). need to be transferred from DPSP to the category of
Fundamental Rights in our Constitution, for the cost of
Two, a blanket definition of a highly diverse population a never-arriving ‘progressive realization’ is too huge
of unorganised workers can obscure the specific to bear. The social wages due to the workers must be
vulnerabilities attached with various occupations delivered as public provisioning of basic necessities
and social identities. Three, a minimal social security of life and social assistance for the indigent, besides
cover may be promoted as a substitute for large- respectable money wages. The fiscal cost incurred
scale measures for social change such as land for this should be seen as social investment in
reforms, building infrastructure for agriculture, recognition of all forms of work that the citizens of
curbing corporate monopoly in both industry and the country put in economic and social reproduction
agriculture, increasing protected/formal employment activities.
especially through regulation of small, medium and
micro enterprises and their linkages with global value An exit from the regressive outlook of state
chains, making urban planning inclusive for workers paternalism and charity towards social security
and ensuring regional parity in economic growth requires the transformation of the political economy
(Kerswell and Pratap, 2016: 243). towards a more egalitarian society in the long term,
and the formal recognition of the demand for a
Mindful of these concerns, the present report views national minimum social security as a universal
national minimum social security as an immediate citizenship entitlement for all in the short-run.

21
Social Security for Unorganised Workers in India

2.3 Parameters of Evaluating Social households across India (Ramachandran and Rawal,
2010: 125). These households belonged to the most
Security Coverage
vulnerable social strata including Scheduled Castes
Population Coverage and Tribes, landless and near-landless households
The foregoing sections made a case for the right to and households in the lowest expenditure classes.
social security to be transformed into a universal Such exclusion was not limited in impact and has
social and economic right protected by the courts. A been documented as adversely impacting the growth
fundamental right has to be universally available to all of the agricultural sector itself (Utsa, 2007: 3134).
citizens of the state. This leads us to a position that
any programme for providing a national minimum In sum, many scholars concur that targeting has led
social security to unorganised workers should have to exclusion of the needy populations and universal
universal coverage if it is to be made into a right. coverage can overcome this problem of targeting
A review of academic and civil society debates (Duggal, 2006; Himanshu and Sen, 2011; Jha and
over the recent decades reveals that there is wide Acharya, 2016: 103). Universal coverage will work
consensus on universal coverage of social welfare better not only for food security schemes but also
schemes as against a targeted approach. Unlike other social protection schemes if provided as a
ideologically rigid positions, this consensus is built part of a comprehensive package of social security
on robust scientific examinations of the experience services and goods. It has been understood that old
of implementing existing social policies. It takes age pensions or for that matter any social security
into account not only the fiscal ramifications of this relief as a standalone measure is unable to attract
position but also its social and cultural dimensions. people to participate unless it is made part of a larger
Moreover, a case is made to calibrate the expansion social protection package which strives towards
of coverage over a timeline that allows maneuvering universal coverage (Loewe, 2014: 97).
space to the state for mobilising financial resources
and upgrading institutional delivery mechanisms. It Addressing Challenges of Multi-Dimensional
also considers larger questions of building national Poverty. Over the recent decades another subject
solidarity to support stable political regimes that of rigorous debate in the Indian civil society has
can sustain the equilibrium between imperatives of been the identification of the poor. Referring to
human development and economic growth. In India, this debate, NCEUS recognised that prevailing
the challenge of providing social and economic government norms on targeting use an outdated
rights in an intensely competitive global economy unidimensional understanding of poverty based on
is recognised as much an economic question as a consumption expenditure (NCEUS, 2007: 8). The
political one. In this section, we review an extensive much-anticipated alternative based on the findings
body of literature from recent decades to present of the Socio-economic Caste Census is yet to be
arguments for universal coverage. incorporated in government systems. It leaves us
to believe that contemporary targeting works with a
Errors of Exclusion in Targeted Policy Design. India highly limited understanding of ‘who is poor?’ Further,
was witness to a most vibrant debate on policy the statistical deficiencies regarding unorganised
design for a social security scheme in the run-up to workers compound the problem of targeting any
the legislation of the 2013 National Food Security scheme meant for them. It would thus make sense
Act. Numerous scholars and activists pointed to the to avoid shooting in the dark on the matter of social
glaring failures of the state in making the Targeted security that concerns the life and death of millions.
Public Distribution System (TPDS) work for those who
need it the most. It has been pointed out that TPDS Avoiding Additional Burden for the Marginalised.
suffers alarming levels of exclusion of vulnerable It has been observed that while targeting benefits
populations from its coverage. As of 2004-05 only have been theoretically justified in dominant policy
four out of the 27 states could ensure that the policy- discourses, the criteria for inclusion often end
based exclusion of TPDS was not higher than 33 up laying additional burden and costs on already
percent. Targeting led to the effective exclusion of stressed populations, particularly women. Macro
as many as 52 percent of the agricultural worker designs making the eligibility for benefits contingent

22
 The Meaning and Realisation of the Right to Social Security

on certain abstractly designed ‘socially responsible’ remains occupation-specific targeted mechanisms

behaviour may fail to take into account the micro which while relatively effective still exclude most of the
social realities where such behaviour is made difficult informal workers. On the other hand, universal policies
owing to social conditions external to the beneficiary can overcome this traditional framework in reaching
(Townsend, 2009: 305). In such cases, deeper out to all informal workers. However, in the post-
research is necessary to either design interventions independence model of the labour-state relationship
at the local level that facilitate easy compliance with in India, the state has bypassed the universal provision
the inclusion criteria or the design of such criteria of social security in favour of collective bargaining
should be flexibly delegated to local democratic and compulsory adjudication as contingent tools of
institutions. labour welfare (Agarwala, 2008: 387). Given this fact,
unorganised labour took an obvious fall when it came
It has also been noted that targeting might lead to to the state’s recognition of their rights. So, unless the
some unintended consequences such as an increase state is seeking a transformation of the traditional
in domestic violence against women when social relations with labour to accommodate the concerns
transfers are made to women in the households of the unorganised sector, universal social security
(Thakur et al., n.d. : 173) guaranteed by the state is the only credible alternative
for informal workers.
Improving the Quality of Services and Goods. While
the fiscal burden of welfare is often borne in the name Making the Social Context Investment-friendly. It
of the poor, the quality of the services thus delivered has also been noted that in the European context as
depends on the participation of the politically vocal capital pushed for more flexibility in the labour market
middle class (Jayal, 2013: 195). Therefore, targeting it also sympathised with the idea of state-provided
that makes the quality of social security services universal minimum social security as it provides a
irrelevant to the middle classes is highly likely to also ceiling in labour market competition (Agarwala, 2008:
adversely impact the quality of the services delivered. 385). ‘Social protection programmes (especially
if they are universal), have a beneficial effect on
Decreasing Reliance on Inadequate Institutional social cohesion and political legitimacy, which are
Systems of Targeting and Delivery. The Indian key ingredients for an investor-friendly environment
experience with delivery of social security- with potentially positive effects on different types of
related services has revealed that owing to investments including foreign direct investment (FDI).
complex institutional structures, many a times the They may also have a positive influence on individual
administrative costs overtake the actual expenditure and institutional behaviour, in terms of risk-taking,
on benefits (O’Keefe and Palacios, 2006: 3486). labour mobility, long-term planning, accountability
It can be argued that given the complications and financial sector development. The prospect of
surrounding the targeting of benefits, targeting participating in earnings-related social protection
inevitably contributes to an increase in the cost of schemes can contribute to greater labour market
institutional functioning and service delivery. Not formalization, with possible positive spin-off effects
having considerable resources to spend on devising on income levels and state revenues’ (Hujo, 2014: 8).
complicated systems of exclusion will definitely be a
step towards simplification of delivery systems. Curbing Clientelism and Strengthening Democracy.
Local government institutions have been found to
Overcoming the Limitations of the Traditional be most suited for identifying target beneficiaries for
State-Labour Relations. In the conventional triad of service delivery within their constituencies. However,
capital-state-labour in industrial relations, the state lack of clarity in policy design vis-a-vis their specific
as a mediator between capital and labour limits its roles in service delivery, financial management and
interventions only to recognised employer-employee most importantly accountability in cases of failure of
arrangements to the detriment of the majority of realisation of policy objectives in their constituencies,
unorganised workers (Agarwala, 2008: 385). The only has been seen as severely undermining the benefits of
alternative for social security for unorganised workers decentralisation. In societies like India, rent-seeking

23
Social Security for Unorganised Workers in India

and clientelism in the delivery of public services and positions of traversing the spectrum of universality
have historically marred the outcomes of the most within the design of schemes to achieve efficiency
well-intended policies (Devranjan et al., 2007: 15). and minimise losses as universal coverage for social
protection is progressively strived for.
Dignifying Social and Economic Rights. ‘Anything
less than universalization is demeaning to those Nathan (2014: 19) cites the example of universal health
who need such public provisioning, or else services insurance for social protection being successfully
provided by the state are likely to be stigmatized as introduced in countries like Germany, Japan and
inferior’ (Jayal, 2013: 15). It has been argued earlier South Korea even when they were low-income or low
in this chapter that the construction of ‘exceptional middle-income economies. He makes an important
categories’ to disburse social and economic welfare point that universal coverage of social protection
is based on their own admission of humiliating should not be understood as absolute but as a system
conditions of existence. As a result, social and that efficiently utilises both self-selection and easily
economic entitlements, even if received by these verifiable, broad criteria for exclusion (Nathan, 2014:
categories, undermine their claim as equal citizens. 21). However, Kannan (2015: 30) warns against falling
for the rhetoric of universal with such internally-built
Need for National Solidarity for Political exclusion criteria that reduce the ‘universal’ tag to a
Sustainability. ‘It is a clear lesson from the earlier misnomer. He cites the example of the new Pradhan
history of the development of welfare states that for Mantri Suraksha Bima Yojana which is for ‘accidental
pro-poor policies to be politically sustainable they death’ only and not for accidents -- the incidence
must move away from targeting only the poorest, of the former is acutely low among the potential
towards becoming universal social and welfare population to be insured. It is also important that to
policies. Only then will they receive firm backing from make self-selection work, the quality of services and
the middle classes and enable sustained improvement benefits should not be deliberately deteriorated.
of poverty’ (Lerche, 2012: 21). Lerche draws attention
to the importance of clarifying the position on Components of Social Security
targeted versus universal debate in policies for the NCEUS (2006: 121) categorises unorganised workers’
campaign of social protection to gain credibility. It social security needs into two sets: ‘The first one arises
is also important to devise political formulations out of deficiency or capability deprivation in terms of
for social alliances that are capable of successfully inadequate employment, low earnings, low health
moving the state to action in a democratic set-up like and educational status and so on that are related to
India (Lerche, 2012: 21). Lerche argues that universal the generalised deprivation of poorer sections of the
welfare policies have been the rallying point for population. The second arises out of adversity in the
social alliances between the middle classes and the sense of absence of adequate fall-back mechanisms
working poor which in turn has formed the basis of (safety nets) to meet such contingencies as ill health,
stable welfare regimes in countries. accident, death, and old age.’

The False Dichotomy of Targeted and Universal Public It has been contended that a response to these two
Provision. ‘The opposition between universality and kinds of needs can be a combination of social security
selectivity in public provision is not quite the binary measures that meet the twin objectives of income
it appears to be, for universalism and targeting stand promotion and protection against risks. Further, such
at opposite ends of a continuum that moves from measures need to take into account the recognition
full universality to universally available and free, to of the right to social security as a basic human right
universally available but not universally free, to modestly (ILO Recommendation 202: 2012) The UN has also in
costed and heavily subsidized’ (Jayal, 2013: 194). principle recognised the right to livelihood wherein
Variations in the design of social security schemes the state and the economy are expected to ensure
across the spectrum of universality may also be useful that a person’s earnings accrued during his/her
in catering to the diverse needs and capacities of the working life should suffice for his/her entire lifetime
large population of workers (Rao et al., 2006: 3488). and also of his/her family.
Srivastava (2013: 138) discusses various approaches

24
 The Meaning and Realisation of the Right to Social Security

Srivastava (2013: 78-111) lays out a description of as a component of the fundamental right to life
the constitution of a comprehensive social protection under Article 21 of the Indian Constitution. Since the
floor in line with the guiding frameworks of the UN beginning of the 2000s, the Right to Food Campaign
Chief Executives’ Board document of 2009 and has been successful in sustaining unprecedented
ILO Recommendation 202. The elements include public discourse on social and economic rights in
dimensions of income security over the entire life India through mass mobilisations for the demand
cycle (childhood, working age and old age) and for right to food. Not unexpectedly its agenda was
adequate access to health and other essential resisted not only by the state committed to fiscal
services, including drinking water and sanitation, contraction policies but also many global financial and
food and shelter (Ibid: 78). While the guiding trade institutions like the World Trade Organisation
frameworks allow flexibility to national governments, (WTO). Nonetheless, the campaign was successful
they recommend clarity in entitlements and statutory in achieving a National Food Security Act (NFSA) in
guarantee of provisions. Such a framework contains 2013. However, given the string forces of opposition,
an unmistakable synergy with the original Directive the larger agenda for making right to good a universal
Principles of State Policy in the Indian Constitution. right was not met in the Act. The Act still promises
It forwards the idea of a national social protection coverage of about three-fourth of the population.
floor that combines the agenda of income-promotive
social security with contingent social security in a Health. Even though NFSA advanced the movement
comprehensive package. for nutritional and some aspects of health
security, right to health has still eluded legislation.
Children’s Education, Nutritional Status and Good Comprehensive proposals for securing the health
Health. Building on the gains of Sarva Shiksha needs of people have been made by a High Level
Abhiyan (SSA), the Indian Parliament made the Expert Group on Universal Health Coverage (HLEG
right to education a fundamental right through a on UHC, 2011) which constructed the Vision 2022 for
constitutional amendment in 2002 and passed an act universal health coverage (Srivastava, 2013: 95).
in 2009: ‘The State shall provide free and compulsory
education to all children of the age of 6–14 years in Housing. Seen as a basic human right by the
such a manner as the State may, by law, determine’ International Covenant on Economic, Social and
(Srivastava, 2013: 79). Children’s nutritional and Cultural Rights, the housing policy in India is unable
health needs were taken up in sustained campaigns to address issues of rural-urban differences in the
like the Right to Food Campaign, India. The campaigns absence of a rights-based approach (Srivastava,
were able to secure progressive judgments from 2013: 101). Like many of the entitlements discussed
the Supreme Court leading to the expansion of earlier, there have been concerted efforts at developing
nutritional coverage of all children under the Mid- policy guidelines for housing but a significant
day Meal Scheme (MDMS) and the Integrated Child movement towards a rights-based policy is yet to
Development Scheme (ICDS). come even after the creation of a separate Ministry
of Housing and Urban Poverty Alleviation (MoHUPA)
Employment and Livelihood Security. The National Rural in 2005. The ministry did formulate a National Urban
Employment Guarantee Act (NREGA), 2005 guarantees Housing and Habitat Policy (NUHHP), which was
every rural household 100 days of wage employment approved by Parliament in 2007. This recognises
and an unemployment allowance. This particular housing as a basic need especially in the face of the
legislation was the result of civil society’s long and dismal conditions of urban slums. However, several
arduous struggle. It enabled the government to break issues mar its implementation.
new ground when it came to introducing radically new
labour standards and information disclosure and social Similarly, the Working Group on Rural Housing for the
audit norms (Srivastava, 2013: 84). 11th Five Year Plan recognised the right to adequate
shelter as a constituent of the right to life. However,
Food. The Supreme Court has made a much-needed the move towards a suitable legislation for this has
leap in its judgments while reading the right to food been slow in coming.

25
Social Security for Unorganised Workers in India

Contingent Social Security, Old Age Protection/Social Financing

Pensions. The constituents of a social security
In 2011, in the Ministerial Declaration adopted at
package cater largely to capability deprivation-led
the UNESCO Conference of Ministers in charge of
needs of the people albeit not without significantly
Social Development in South Asia, India committed
mitigating the risks posed by adversities. Many
to ‘prioritize financing for social protection measures
of the elements of social security mentioned here
in national expenditure plans’ (UNESCO cited in
have either achieved the status of a fundamental
Srivastava, 2013: 78). Whether the Indian state has
right or received statutory backing with expanded
done enough to fulfil this commitment in its annual
coverage and entitlements owing to pressure from
budgets is discussed in the next chapter. For now,
civil society. However, the domain of contingent
it can be safely said that there are no signs of such
social security, particularly from the vantage point
a progression when we see the current state of
of unorganised workers, has faced a peculiar non-
unorganised workers. This section complements the
committal attitude from the state. As underscored
earlier arguments for a right to a national minimum
before, recommendations for contingent social
social security by presenting a few key arguments for
security for unorganised workers have been made
financing social security programs by the state.
by three key government bodies, the National
Commission for Rural Labour (1991), NCL-II and
To begin with, we would like to object to the historic
NCEUS. NCEUS, in particular, has done great service
‘alibi of underdevelopment’ for the denial of a right to
to this cause by bringing hitherto unseen clarity in
social security. Scholars have argued that while the
conception and delivery systems for social security
fiscal stress argument can be looked into, low GDP
to unorganised workers. It should suffice to point
or per capita income, by no historical or conceptual
out here that despite the recommendations, UWSSA
means, precludes the possibility of the creation of
that was passed in 2008 failed to set a national
adequate fiscal space for social security provisions
minimum standard of social security with clearly
in developing countries like India (Jha and Acharya,
articulated components to be delivered universally
2016:104). Citing fiscal stress as a reason for
in a set timeframe (Srivastava, 2013: 88). The Act
limiting social expenditure in developing countries is
is unclear on the coverage of benefits, nature and
seen as an ideological cloak to impose the agenda
quantum of entitlements, financing, federal division of
of the Washington Consensus, much like the refrain
implementation and monitoring responsibilities, and
of an ‘ageing population’ being used in developed
most importantly, a timeline for its operationalisation.
countries to cut social expenditure (Sakthivel and
A detailed review of NCEUS’s recommendations and
Joddar, 2006: 2107). This is particularly worrisome for
their limitations as well as UWSSA’s provisions form
the interests of the poor and vulnerable unorganised
a part of the third chapter of this report.
workers because despite numerous schemes and
multiple high level committees recommending social
In sum, we contend that all the components mentioned
security measures, the actual coverage of social
here are undoubtedly desirable for a social protection
security among Indian workers is very low.
floor in India. However, even as the other elements of
social security have received the attention of the state
In fact, it has mostly been a question of the political
in varying measures from a rights-based perspective,
outlook on issues prioritising human development
contingent social security for unorganised workers
over interests of international financial capital.
appears to suffer the most from government apathy.
Jhabwala (1998: L-7) points out that a critical
The discourse on unorganised workers’ social security
determinant of the state’s approach to financing
is gradually gaining ground but it has been relegated
also lies in the conception of the beneficiary itself.
to a policy blind spot of the state. With uncertainty
If beneficiaries are seen as merely being poor, needy
surrounding the real import and implementation
and unemployable, the financial costs of providing
of UWSSA for almost a decade, the momentum for
social security to them is naturally seen as a burden
unorganised workers’ social security needs to be
on the other productive members of society. However,
rebuilt from scratch. This report is an attempt on the
if the beneficiaries are seen as productive members
part of the Right to Social Security Campaign to take
of society who necessarily input their labour through
up this task.
their lifetime into economic production and social

26
 The Meaning and Realisation of the Right to Social Security

reproduction, whether paid or unpaid, regular or It has also been found that owing to complex
contingent, organised or unorganised, any costs institutional structures for the delivery of social
incurred for maintaining their decent living standards security benefits, many a times the administrative
can be seen as an investment in compensating and costs are more than the actual expenditure on benefits
promoting a healthy workforce. Thus, the perspectives (O’Keefe and Palacios, 2006: 3486). Therefore, the
and positions on financing social security essentially quest for financial viability and sustainability also
derive from prevailing social norms on which includes institutional innovations to simply the
consensus is built through political processes. systems of delivery. Therefore, it is important that
While contemporary regimes are comfortable with the financial plan for the operationalisation of service
discourses invoking ‘pro-poor’ terminologies, the delivery is integrated in the policy design.
recognition of their productive role in society in an
alternative ‘pro-worker’ discourse is often considered This report acknowledges that the fiscal space
politically motivated and detrimental to ‘economic available for designing social policy is very dynamic
growth’. where fiscal choices are not exclusively based on a
state’s political choices. That said, scholars have
Generous tax-financing of pensions for public sector consistently offered solutions for issues related to
(organised) employees is justified as, among other social security financing (See, for instance, Jha and
things, compensation for lower salaries and limited Acharya, 2016; Srivastava, 2013:112).
rights for wage-bargaining compared to private
sector employees (Hujo, 2014: 19). By that logic General Policy Design
similar compensation in terms of financing social
Since we have articulated the question of social
security should be offered to unorganised workers
security as a political choice for the state to meet its
who subsist under similar constraints albeit with
objectives of social justice and human development,
drastically lower socioeconomic status and without
it is critical that the policy design is sensitive to these
opportunities of exiting for alternative forms of
objectives in line with a group-differentiated approach
employment. However, the quantum of money
to citizenship entitlements. The aspiration embodied
disbursed as pensions and other benefits under
in much of the discourse on social security in India,
welfare schemes particularly to unorganised workers
is that of equality and dignity. However, scholars and
is generally only a small fraction of similar benefits
activists pursuing these questions are also aware of
received by employees in the organised sector (Gopal,
the profound social cleavages of caste, religion and
2006: 4483).
patriarchy that obstruct uniform outcomes of policies
across social groups and regional geographies.
In the case of unorganised workers, the state has Therefore, while the outcomes expected in policy
no alternative but to contribute towards the social design will create a level-playing field in the labour
security expenses of unpaid and unemployed workers, market with special attention to deprived groups,
especially those below the poverty line (Neetha, 2006: the approaches for realising these outcomes for
3499). Non-contributory social pensions have been Dalits, Adivasis, women and Muslims will require that
especially effective in terms of poverty reduction, the design is informed by the peculiarities of their
equity and redistribution with relatively low costs and historical deprivation.
if provided as part of a larger social protection package
they can help can overcome challenges of adequacy,
Social Realities Precede Theory. Given the political
universal coverage and financial sustainability (Hujo,
predominance enjoyed by neoclassical theories
2014: 24). If the role of pensions and other social
of economics in the contemporary global political
security measures is duly recognised by states as
economy, policy designs tend to subjectively alter
promoting coping and resilience in the face of market
the facts of social realities to best fit the dictums
volatilities and economic crises, political choices to
of a neoclassical approach. Therefore, they often
channel financial resources towards them on priority
neglect the diverse social experiences of various
can be strongly justified.
identities leading to divergences of outcomes from
the objectives professed in the design. A case in point

27
Social Security for Unorganised Workers in India

is the increase in domestic violence in Bangladeshi objectives in their constituencies, have been seen as
households after the introduction of cash transfers severely undermining the benefits of decentralisation.
to women. It has been suggested that integrating In societies like India, rent-seeking and clientelism in
questions of gender or for that matter caste, cannot the delivery of public services have historically marred
be through simplistic ‘add women and stir’ tweaks the outcomes of the most well-intended policies
to policy design. Instead the need is to break out (Devranjan et al., 2007: 15). Hence, policy designs
of set theoretical prescriptions in accordance with will do well to complement decentralisation efforts
the specificity of the social conditions of the target by creating accountable institutions in which all
population (McKay, 2005: 2). stakeholders, particularly workers, can participate in
the interest of democratic accountability. Experience
Mainstream economists have argued against state with tripartite models in welfare boards as endorsed
interventions such as universal old age pensions in NCEUS and UWSSA should be set up for policy
based on an abstract theoretical argument that design and implementation.
such interventions will discourage individuals from
saving for old age during the productive years of Information Systems. The availability of data on the
their lifecycle (McKay, 2005: 26). Fiscal contraction in unorganised workforce in India is highly deficient;
social expenditure the world over is a result of similar this has also been recognised by many scholars
abstract theorising and subsequent prescriptions and activists. Successive government commissions
from dominant financial institutions such as the including NCL-II and NCEUS have recommended
International Monetary Fund (IMF). However, such developing a robust database of unorganised workers
policy choices are profoundly flawed for their lack to facilitate informed policymaking. However, there
of understanding of human behaviour in developing has been little movement in this direction by the
world contexts such as that in India. In the Indian Indian state and such a delay is likely to have a
labour market, it cannot be assumed that gainful grievous impact on millions of workers who may get
employment is available to all during their productive left out of the state’s welfare systems owing to their
years and the income received from that is sufficient invisibility in data.
to meet an individual’s immediate subsistence needs
and also leave a surplus as savings. NCEUS’ finding 2.4 Conclusion
that more than three-fourth of the Indian population
Social and economic rights including the right to
survives on less than Rs 20 a day is a simple and
social security are indispensable for the realisation
frontal rebuttal of the underlying assumptions of
of full citizenship. Their relegation to non-binding
such theoretical positions.
DPSP in the Indian Constitution has led to cynical
instrumentalisation of social and economic
Old age pensions in India are required because most entitlements by vested interests to foment fissures
of the unorganised workers go through considerable in society. A liberal political democracy warrants
periods of underemployment and unemployment seeing citizens as an end in themselves who are
during their productive years despite their perennial entitled to the full realisation of their human potential
quest for decent work. Most of those who find through inalienable rights. In India, the liberalisation
employment often slip through the cracks in labour of governance systems poses a challenge in meeting
laws and end up receiving less than the state- the conditions of the democratic functioning of
mandated level of minimum wages. society.

Decentralisation with Tripartite Decision-making A claim to universal national minimum social

Bodies. Local government institutions have been security rests on the premise of recognition of
found to be the most suited for identifying target various forms of labour, above and beyond the
beneficiaries for service delivery within their mainstream conception of ‘work’. This is critical for
constituencies. However, lack of clarity in policy the recognition of unorganised workers, particularly
design about their specific roles in service delivery, women and unpaid, underemployed and unemployed
financial management and most importantly workers. Such a transformation in the policy outlook
accountability in case of failure of realisation of policy is of utmost importance in the Indian context since

28
 The Meaning and Realisation of the Right to Social Security

major projects for fundamental social transformation to landmark Supreme Court judgments and mass
such as land reforms and inclusive urbanisation actions by civil society. Rights to education, nutrition,
have failed to redistribute resources in society. While food and work, etc. are successful instances of
this reality allows vested interests to promote state this progress. However, contingent social security,
paternalism in social policies for political advantage, particularly linked to the precarious conditions of
the recent discourses on the right to food, education work of unorganised workers, has suffered a peculiar
and work, etc. advance a credible challenge to such apathy from the state. Therefore, a strong case
an outlook. New mass mobilisations by informal can be made for a right to social security which
women workers and civil society have re-articulated embodies critical elements of contingent social
the project of achieving social and economic rights security. The state’s attitude towards such a demand
as a conduit for activating the political agency of is more a function of its political outlook than its
unorganised workers en-masse. fiscal abilities. Uunorganised workers have already
borne irreparable costs due to the state’s alibi of
The movement for the right to social security as underdevelopment and the promises of a progressive
a social and economic right gains from earlier realisation of social and economic rights. There is
campaigns. Civil society and policy experts in credible evidence from international experience that
India have been able to generate considerable the level of national economic development has not
consensus on key issues in the design of social been able to obstruct public provisioning of social
policy including population coverage, components security benefits. Thus, the Indian state would do
of social security, financing of services, goods and well to revisit the constitutional ideals to move the
delivery institutions and social imperatives for a right to social security from DPSP to fundamental
larger policy design. Universal coverage of right to rights. At the same time, it will also be instructive
social security, albeit via a calibrated expansion to learn from the experience of implementing earlier
and differentiated bundles of benefits, is considered social policies and investing in a policy design that
widely desirable. Key elements of social security, prioritises specific social contexts over theoretical
that address capability deprivation, have seen prescriptions of western financial institutions.
significant progress in government provisions owing

29
 CHAPTER 3

LEGISLATING SOCIAL
SECURITY IN INDIA

This chapter has three main sections. The first section workers. Further, with increasing awareness about
discusses the evolution of an understanding of the the conditions of work and the social security needs
needs and solutions required for ensuring minimum of unorganised workers, the approach of these reports
decent conditions of work and social security for has focused on the profound internal diversities of
unorganised workers. The second section reflects on unorganised workers owing to their geographical
the understanding developed in various government locations, occupational positions and socioeconomic
reports and in the recommendations made in backgrounds.
proposals for policy formulation for unorganised
workers. The third section reviews the provisions and From NCSEW to NCEUS, we notice consistently
imports of the Unorganised Workers’ Social Security increasing recognition of the specific challenges
Act, 2008 in light of the policy recommendations faced by women, Dalits, Adivasis, religious minorities,
discussed earlier. The chapter uses tabulated persons with disabilities, rural populations, migrants
discussions for facilitating comparative reviews and other such categories. At the same time, there
across the timelines of various reports and bills. also appears to have been an effort to move beyond
the traditional categorisations of rural and urban,
3.1 State Discourse on agricultural and non-agricultural, etc. So, in effect,
Unorganised Workers the workforce appears divided into two primary
categories of organised and unorganised. Within this,
Discourse in the government and in civil society on
various commissions and civil society have done well
the issues of unorganised workers picked up in the
to recognise the interdependencies between the two
latter half of the 1980s. Since 1988, there have been
sectors as well as the fluidity of the workforce across
at least five major government reports recommending
formal and informal forms of employment.
policies for regulating unorganised workers’
conditions of work and social security unorganised.
NCL-I is used here as a reference point to underscore
An important departure in this discourse has been
this shift in the discourse. As discussed in earlier
the conception of unorganised workers/sector as
chapters, NCL-I was significant in recognising the
a distinctive and quasi-permanent feature of the
need for organising unorganised workers to be
workforce in India. We have noticed a paradigm shift
able to inform policy for their distinctive needs and
in the state’s approach to the unorganised sector,
aspirations. It saw a sincerer implementation and
wherein the post-independence expectation (as
coverage expansion of existing laws and policies
acknowledged in NCL-I) of progressively bringing
with constructive participation of the workers
it in the ambit of laws and policies meant for the
themselves as a way out of their invisiblisation in the
organised sector is replaced by an admission of the
policy discourse. For this it advocated institutional
reality that such inclusion has by and large eluded
reforms with the objective of increasing access to
policy implementation. In line with this, these reports
unorganised workers. At the same time, the state
advocate separate legislations for unorganised
was exhorted for the protection and promotion of
Social Security for Unorganised Workers in India

workers’ capacities to exercise their democratic social security has been widely documented. As the
rights individually and collectively. However, NCL-I’s state underwent fiscal contraction to create space for
approach lacked clear policy recommendations for private capital, it led a systematic deregulation of the
legislative and institutional reforms catering to the labour market. Thus, the expectation of the gradual
unorganised sector. This can be seen as a limited yet incorporation of unorganised workers in the formal
much needed start of the state’s engagement with sector was rendered meaningless. As informalisation
unorganised workers’ distinctive issues. in the organised sector started increasing, the state’s
lip service to fulfilling the recommendations of its
The following decades saw the state’s policies for own committees deteriorated the working and living
unorganised workers refracted through the lens of conditions of millions of workers.
state paternalism for poverty alleviation. Towards
the late 1980s we saw the revival of state concern NCL-II came at a time when de facto deregulation of
for unorganised workers from specific vantage the Indian labour market through state actions and
points of women’s rights and the condition of rural judicial pronouncements had relegated most of the
labour. NCSEW’s intervention is seen as critical for Indian population to conditions of extreme poverty
problematising the notion of ‘work’ in the policy and vulnerability. A few years after NCL-II, NCEUS
discourse. It is here that NCSEW successfully quantified the pandemic levels of socioeconomic
underscored the structural exclusion of women from deprivation in the fact that more than three-fourth of
property rights being aggravated by the simultaneous the population lived on less than Rs 20 a day. NCEUS’
devaluation of their labour in the realms of the recommendations attempted to salvage the situation
‘family’ (including reproductive functions) and the by reminding the state that the largely negative
larger economy. Making a strong case for gender outcomes of liberalisation for the working population
parity and dignity for unorganised workers, NCSEW’s needed to be countered by a minimum level of state
recommendations exposed the inaction of the state protection. NCEUS conceived an umbrella legislation
since NCL-I. to regulate the conditions of work and provide social
security to all the unorganised workers.
This was also a time when vibrant new farmers’
movements mainstreamed the agenda of rural It was a chance for the BJP-led central government
development in national politics. The state was forced of the time to show the people that liberalisation,
to acknowledge the failure of ‘trickle down’ policies even if irreversible in mainstream thinking, could be
with NCRL bringing to light the adverse results of implemented differently than the former Congress-
systemic neglect of agricultural workers, migrants led regimes. However, the efforts in the direction
and other rural occupations in state policies. Rural of operationalising NCL-II’s recommendations,
workers and migrants constituted the largest share including a pilot programme, bore far from satisfactory
of unorganised workers whose conditions of work results. With no concrete measures to allay the pain
and social security requirements largely escaped of a starving population, the government’s slogans
any regulatory and welfare arms of the state. NCRL of ‘India Shining’ rang hollow. In its wake came the
recommended their proper identification, enumeration UPA-I government which gave limited but critical
and protection by overdue legislative interventions by space to civil society through NAC in the processes
the state. Here we note an early instance of a demand of policy formulation.
for separate legislation for unorganised workers
which was partly due to the distinct conditions of NCEUS was mandated by the UPA-I government
agricultural workers but not without a tacit admission to do a comprehensive review of the conditions of
of the state’s failure to expand the coverage of labour unorganised workers in the country. Although NCEUS
laws beyond the organised non-agricultural sector. has received its own fair share of criticism, its role in
foregrounding the contributions and trepidations of
It was around the time of the NCRL report that India unorganised workers in sustaining a rapidly growing
embraced the policies of liberalisation, privatisation national economy are highly commendable. In a
and globalisation. The logical adverse fallout of the series of reports, NCEUS was able to re-articulate the
regulation for decent work conditions and provision of discourse on poverty alleviation and social security

32
 Legislating Social Security in India

in India. It demonstrated that the livelihood activities and social elements of NCEUS’ proposals. It was the
of unorganised workers were indispensable if India same bill that was ultimately passed by Parliament
wanted to continue on the path of high economic as the Unorganised Workers Social Security Act,
growth. At the same time, it was these very activities 2008 (UWSSA). Many have defended the value of the
and occupations in the formal and informal sectors final Act which they consider a bold first step in the
that bore an unmistakable correspondence to sub- direction of providing social security to unorganised
human conditions of work and high levels of poverty workers. Substantive flaws in the Act aside (discussed
and vulnerability. For all the preceding analysis and later in this chapter), it is hard to buy this ‘first step’
efforts by the state, unorganised workers largely argument. Table 3.1 gives a detailed illustration of a
subsisted at the peripheries of the society unattended deep political non-commitment by the Indian state
by state institutions and exploited by employers. Like to the cause of unorganised workers’ protection and
the NCL-II, the NCEUS combined the challenges of social security. It took the state, five comprehensive
providing social security to unorganised workers with reports at the national level and eight different bills --
the objectives of regulating their conditions of work. all developed with herculean efforts in research and
Its approach was informed by a deep understanding of consensus building across a country as large as India
the internal occupational and social diversities of the -- to take a ‘first step’ whose direction is unclear. The
workforce and the distinctive position of agricultural commissioning and submission of all these reports
and non-agricultural workers. NCEUS submitted two and bills took decades of struggle on the part of
separate bills for addressing the conditions of work unorganised workers. If the state attributes such
and social security requirements of agricultural and minimal value to the lives of the people who build this
non-agricultural workers. country brick by brick, we have no choice but to face
a crisis of democracy as it functions in India today.
NCEUS’s recommendations and legislative proposals By turning a deaf ear to the most enlightened advice
got a lukewarm reception by the UPA-I government. of numerous experts in these commissions, the state
The government integrated the separately proposed appears adamant on compelling working people to
bills for agricultural and non-agricultural workers into seek charity and not rights
a single bill in 2007 that overlooked key policy design

Table 3.1: Evolution of an understanding of unorganised workers’ needs

and solutions in major government reports

Year Institution/Report
1969 NCL-I
Main Recommendations a) First hand detailed surveys from time to time to understand the problems of the different
categories of unorganised labour.
b) Legislative protection by the state for unorganised/ unprotected labour.
c) Simplification of legislative and administrative procedures applicable to small establishments.
d) Expediting education and organisation in unorganised labour.
e) As there is no alternative to the existing implementation machinery, what exists should be
reinforced, and the inspection system should be strengthened.
f) Steps for the protection of workers against middlemen, and development of self-help through
cooperatives.
g) Cooperatives should pay adequate wages and bonus, and give employment opportunities to the
underemployed and unemployed among them.
1988 National Commission on Self-employed Women and Women Workers in the Informal Sector (NCSEW)
Main Recommendations Enlarging the definition of work done by women to include all paid and unpaid activities performed
within the home or outside as an employee or on ‘own account.’
Devising strategies which will enhance their ownership and control over productive assets.
More stringent observance of existing labour laws and the introduction of deterrent penalty clauses.
Simplification of judicial procedures, particularly to enable unorganised workers to obtain legal
redress without undue harassment.

33
Social Security for Unorganised Workers in India

Year Institution/Report
Fixing a minimum wage, and passing legislation to regulate conditions of employment, social security
and security of employment for domestic workers.
Minimum wage rates and piece rates to be increased keeping in view the requirements of women
workers and their families.
Widely prevalent wage discrimination against women workers despite existing legislation needs to be
corrected.
The setting up of an Equal Opportunities Commission under a central law, and also that such a
commission should have wide powers of investigation, direction, advice and monitoring.
For ensuring due coverage of workers, particularly women, by legislations on conditions of work and
social security, tripartite boards must be constituted with due representation of workers with powers
to monitor and regulate implementation.
A separate wing should be set up in the Labour Department for unorganised workers with adequate
number of women employees at various places.
To justifiably account for the reproductive functions of women universal maternity benefits and
childcare should be the responsibility of all employers (through a levy system) and the state.
A comprehensive law on health and safety be formulated and enacted.
1991 National Commission on Rural Labour (NCRL)
Main Recommendations Creating infrastructure to improve productivity and employment.
Enforcement of minimum wages and social security.
Introduction of a central legislation for agricultural labour providing security of employment,
prescribed hours of work, payment of prescribed wages and a machinery for dispute settlement.
Introduction of a system of registration and providing identity cards to these workers.
Creation of a Welfare Fund with employers’ contributions in the form of a cess on land, and a nominal
contribution from agricultural labour.
Specific recommendations for various categories of workers, including handloom workers, beedi
workers, construction workers, brick kiln workers, toddy tappers, fishermen, leather workers,
sweepers and migrant labourers.
Comprehensive amendments to the Inter State Migrant Workmen (Regulation of Employment and
Conditions of Service) Act, 1979 (ISMW) to protect migrants, with clearly laid out responsibilities for
contractors, sub-contractors and principal employers.
2002 NCL-II
Main Recommendations Major overhaul of labour laws for their simplification and wider coverage of small enterprises.
An umbrella legislation for the social security of unorganised workers.
2007 NCEUS (Report on Conditions of Work and Promotion of Livelihoods in the Unorganised Sector)
Main Recommendations Ensuring minimum conditions of work for both agricultural and non-agricultural unorganised workers
through two separate legislations.
Rights-based universal national minimum social security scheme covering life, health and
disability, maternity and old age protection funded through a National Social Security and Welfare
Fund (NSSWF) to be provided for mainly by the central government besides the employers’, state
governments’ and workers’ contributions.
Special programme to address specific credit and other needs as well as debt relief for small and
marginal farmers with emphasis on accelerated land and water management for equitable and
sustained rural development.
Improving institutional credit flows to the non-agricultural sector.
Encouraging livelihood promotion through strengthening self-help groups and micro-finance
institutions.
Creating a statutory National Fund for the Unorganised Sector (NAFUS) for the overall integration of
the unorganised sector’s credit and promotional needs.
Expanding employment through strengthening self-employment programmes and universalisation of
NREGA.
Increasing employability through skill development.

34
 Legislating Social Security in India

3.2 The Legislative Evolution

Towards Unorganised Workers
Social Security
Table 3.2: Summary of the legislative evolution towards Unorganised Workers Social Security, 1997-2007.
Year Proposing Institution/Body Proposed Bill/s Following Recommendations of
1997 Ministry of Labour and Employment (MoLE) A comprehensive legislation National Commission for Self-
for regulation of employment, employed Women and Women
conditions of service and Workers in the Informal Sector
provides for welfare measures (NCSEW) 1988; National
of agricultural workers Commission on Rural
Labour(NCRL), 1991
Highlights Focus: conditions of work and social security.
Sectoral Differentiation: agricultural workers.
Coverage: covered wage workers only; registration of labourers and issue of identity cards.
Benefits: included regulation of hours of work, overtime rates, payment of ‘prescribed’ wages, continuity of employment,
child-care facilities, safety measures as prescribed; prohibited unfair labour practices against trade union activities.
Financing: unclear.
Organisation and Service Delivery: Agricultural Welfare Boards and a three-tier structure for dispute resolution.
2001 Private Member’s Bill (Hannan Mollah) A comprehensive legislation MOLE Bill 1997
for regulation of employment,
conditions of service, and
provision of welfare
measures of agricultural workers
Highlights Broadly similar definitions, coverage and provisions as the 1997 MoLE bill; additionally, system of enforcement by inspectors
and a two-tier dispute resolution structure.
2002 NCL-II Unorganisd Sector Workers NCL-II 2002
(Employnt and Welfare) Bill
Highlights Focus: conditions of work and social security.
Sectoral Differentiation: single umbrella legislation to be integrated into relevant existing laws to cover employment both in
the agricultural and non-agricultural sectors, which were to be listed in the schedule appended to the Act.
Coverage: recognition and protection of all types of unorganised sector workers regardless of industry, occupation, work
status and personal characteristics.
Benefits: included social security, health and safety, working hours, holidays, prohibition of child labour, workers’ right to
access common natural resources for developing and increasing their productivity through work, traditional rights related to
work and space, protection from unfair labour practices, retrenchment without a reasonable cause, education, training and
skill development.
Financing: unclear.
Organisation and Service Delivery: proposed organisational structure of Central Board-State Boards-Employment-based
boards at state levels with district level boards and worker facilitation centers at the local level for implementation, dispute
resolution, timely payment of minimum wages, income promotion and protection measures for self-employed workers in the
Act.
2004 MoLE Unorganised sector Workers Bill NCL-II 2002
(revised in 2005)
Highlights Focus: conditions of work and social security.
Sectoral Differentiation: all sectors.
Coverage: covered both wage workers as well as self-employed workers (although only those in scheduled employment) in all
sectors.
Benefits: provisions for minimum conditions of work, including an eight hours work day with a half an hour break, overtime at
a rate twice the ordinary wage rate; and payment of wages at prescribed rates not less than the statutory minimum wages.
Financing: social welfare schemes under the Act to be funded by central and state governments with workers’ contributions.
Organisation and Service Delivery: followed the central and state boards with the structure of worker facilitation centers for
implementation; no separate dispute resolution mechanism.

35
Social Security for Unorganised Workers in India

Year Proposing Institution/Body Proposed Bill/s Following Recommendations of

2005 National Centre for Labour; National Campaign Two Bills proposing Based civil society engagement
Committee for Unorganised Sector Workers comprehensive legislation with various issues and types of
for regulation of employment unorganised workers over the
and conditions of service, years
social security and welfare of
unorganised sector workers
Highlights Focus: conditions of work and social security.
Sectoral Differentiation: exclude agricultural, plantation, sericulture, horticulture, poultry farming, animal husbandry workers
and other allied workers and persons employed in factories and mines.
Coverage: cover wage workers, homebased and out-workers duly registered under the Act.
Benefits: provisions for regulation of working conditions, provision for continuity of employment, bonus and social security,
non-discrimination
and provisions against harassment of women workers; right to have a uniform social security card; occupational and other
safety measures; vocational training and guidance and ensuring special protection for migrant workers.
Financing: unclear.
Organisation and Service Delivery: implementation through tripartite boards and inspection powers to trade unions with
dispute resolution councils and appellate authorities in place.
2005 National Advisory Council (NAC) (forwarded by PMO) Draft Unorganised Sector Based on engagement with
Workers’ Social Security Bill various stakeholders in the civil
society and government in the
NAC
Highlights Focus: dedicated bill for social security; does not cover conditions of work.
Sectoral Differentiation: single bill for both agricultural and non-agricultural workers.
Coverage: all workers in the unorganised sector and workers without any social security.
Benefits: health, life and permanent disability insurance plus maternity benefits without any
contribution from workers; old age benefit schemes with pension but with contribution from workers.
Financing: (i) levy and collection of cess, tax or fees, (ii) grants and loans from the central and state governments, and (iii)
contribution from workers.
Organisation and Service Delivery: National Social Security Authority (corporate body) with state-level ‘facilitation agents’ for
implementation of schemes through district-level committees and local organisations of unorganised workers designated as
‘Workers’ Facilitation Centers.’
2005 NCEUS Unorganised Sector Workers’ Based on, inter-alia, the MoLE and
Social Security Bill NAC bills of 2005
2005 NCEUS Unorganised Sector Workers’ Based on, inter-alia, the MoLE and
(conditions of work and NAC bills of 2005
livelihood promotion) Bill
2007 NCEUS Agricultural Workers’ Conditions NCEUS’ review of all preceding
of Work and Social Security Bill recommendations and its own
findings
Highlights Focus: conditions of work and social security.
Sectoral Differentiation: only for agricultural workers.
Coverage: registers agricultural workers only; must be 18 years of age; set monthly income at Rs 7,000 in 2007.
Benefits: include physical conditions of work, duration of work and payment of wages for agricultural workers; mandates
the central and state governments to implement a package National Social Security Scheme with health insurance, life and
disability cover and old age security to which all agricultural workers would be entitled. Allows central and state boards to
formulate additional schemes.
Financing: constitution of National Social Security and Welfare Fund; total estimated outlay of scheme for agricultural
workers Rs 19,400 crore.
Organisation and Service Delivery: establishes a national board for unorganised workers and state boards only for agricultural
workers; state boards responsible for delivery of mandatory minimum social security benefits; creates a dispute resolution
council and conciliation committees at district and sub-district levels.
2007 NCEUS Unorganised Non-agricultural NCEUS’ review of all preceding
Workers’ Conditions of Work and recommendations and its own
Social Security Bill findings

36
 Legislating Social Security in India

Year Proposing Institution/Body Proposed Bill/s Following Recommendations of

Highlights Focus: conditions of work and social security.
Sectoral Differentiation: only for unorganised non-agricultural workers.
Coverage: registers unorganised non-agricultural workers only; must be 18 years of age; set monthly income at Rs 7,000 in
2007.
Benefits: include physical conditions of work, duration of work and payment of wages for wage workers and homeworkers;
mandates the central and state governments to implement a package of National Minimum Social Security Scheme to which
all unorganised workers would be entitled.
Financing: constitution of National Social Security and Welfare Fund; total estimated outlay of scheme for unorganised non-
agricultural workers Rs 12,950 crore.
Organisation and Service Delivery: establishes national board for unorganised workers and state boards only for non-
agricultural workers; state boards responsible for delivery of mandatory minimum social security benefits; creates a dispute
resolution council and conciliation committees at district and sub-district levels.

2007 GoI Unorganised Sector Worker’s NCEUS recommendations and

Social Security Bill bills
Highlights Focus: only social security.
Sectoral Differentiation: uniform for all sectors covering unorganised workers.
Coverage: registers unorganised workers (does not differentiate); must be 14 years of age; allows central or state
governments to set qualifying limits on monthly incomes.
Benefits: allows the central government to formulate suitable welfare schemes for different sections of the unorganised
sector relating to life and disability cover, health and maternity benefits, old age protection and any other benefit decided by
the government.
Financing: does not include the formation of any National Social Security and Welfare Fund or any financial estimates of
outlay required.
Organisation and Service Delivery: establishes a national board and state boards for all unorganised workers (including
agricultural workers); no dispute resolution machinery proposed.

3.3 The Unorganised Workers Some managed to sustain an optimistic outlook in

Social Security Act, 2008 describing the law as ‘the first step that will, hopefully,
trigger a process of mobilisation of public opinion for
Over the decade before UWSSA actually became
a more comprehensive social security entitlement to
a law, more than ten versions of the social security
workers in the unorganised sector’ (Saxena, 2009:
for unorganised workers bill came from the central
281) while others who did not mince words termed it
government and other bodies. Legislative efforts
as an ‘exercise in futility’ (Sankaran, 2009).
intensified after UPA-I came to power and NCEUS
was constituted under government’s mandate of a
A review of this law could have been more sympathetic
common minimum programme. The Unorganised
given the gigantic and critical task it aimed to
Sector Workers’ Social Security Bill, 2007 was
accomplish. However, a blatant and blanket rejection
introduced in the Rajya Sabha on September 10,
of the aspirations of about half a billion workers
2007 and was referred to a Standing Committee on
contributing more than 60 percent to the national
Labour chaired by S. Sudhakar Reddy. The committee
product, is hard to swallow. More so because: one,
did a thorough review of the bill using NCEUS and
what is being asked for is not conspicuous freebies
others’ previous recommendations. It not only
but constitutionally mandated minimum entitlements
redrafted the bill for the government but also majorly
as citizens of the country; two, the legislation itself,
improved upon its drawbacks. However, for reasons
for all its weaknesses, was delayed by at least a
ostensibly based on UPA-I’s electoral calculations
quarter century if not since independence; and
and not expressly articulated by the government,
three, as the government of the day chose to nearly
the final version of UWSSA passed by the Lok Sabha
completely overlook the recommendations of its
on December 17, 2008 practically ignored most of
own commissions (NCEUS) and NCL-II, let alone
the Standing Committee and NCEUS’ inputs. The
the countless struggles of civil society for decades.
final version of the law was a grave disappointment
In all, as an ardent advocate of workers’ rights put
for unorganised workers for various reasons.

37
Social Security for Unorganised Workers in India

it, ‘one is struck by total lack of legislative policy or of ministries and agencies of the central and state
intent’ (Sankaran, 2009). The most glaring illustration governments under the present design of the Act.
of this non-committal approach of the government
is the fact that the law itself does not mandate Benefits. The Act is unclear about the composition
any time-bound implementation of even the few of the ‘national minimum social security’ package to
schemes that its Schedule I has. Not surprisingly, be delivered to all unorganised workers. It appears
as of date, about a decade after UWSSA became a to have brought the existing ‘poverty alleviation’
law, there is little by way of its implementation on schemes of the central government into the ambit
the ground. Subsequently, there is little review of its of the Act. All these schemes mentioned in Schedule
implementation. I have variable benefits and limited coverage as
of now. The Act fails to reorganise and streamline
In terms of the import and value of the law itself even these limited schemes to fulfil the mandate of
for unorganised workers, the recommendations of national minimum social security to unorganised
the Standing Committee on Labour (henceforth the workers. The Committee had recommended that at
Committee) provide a comprehensive evaluation. the most within three years of the Act coming into
This section bases its review mainly on these force, all the relevant schemes’ coverage should be
recommendations. A few other criticisms by civil expanded to all eligible workers. The Act makes no
society are cited where necessary. such commitment.

Time-frame for Implementation. The Committee Funding. Both the Committee and NCEUS
recommended a phased expansion of coverage recommended the formation of dedicated national
across various states and areas of the states for and state level funds for unorganised workers’
different schemes under the Act within six months social security. The final Act totally skips this critical
from the date of the President’s assent. The Act left it recommendation and allows unlimited flexibility
to the executive discretion of the government to bring thus creating uncertainty regarding the funding of
its provisions into force. the national minimum social security benefits. This
evasion includes dereliction on the part of the central
Definitional Issues. The definition of ‘employer’ government to at least provide assured funds for the
in the Act by not including ‘natural or juridical’ as maintenance of the national minimum levels even
recommended by the Committee has left a loophole as states variously attempt to improve upon the
for a variety of employers to escape accountability minimum.
under the Act. A few other definitional issues in the
Act can potentially exclude agricultural workers or Role of Trade Unions and Civil Society Organisations.
workers with more than one simultaneous employer. There is widespread consensus on the adoption of
the tripartite model of design and implementation
Further, given the inherent difficulty of perfectly of social security schemes to ensure adequate
defining unorganised workers or the sector, there is a representation to the workers. Both NCEUS and the
risk of excluding categories of workers like anganwadi Standing Committee argue for trade unions and
workers who do not fit into sectoral definitions per se. other workers’ organisations to be incorporated in
the national and state level boards under the Act.
Additionally, the Act is confusing regarding the They have also been deemed the most suitable
definition of ‘family’ which leans towards a narrow actors for local level implementation and monitoring
understanding of nuclear families that are not of the schemes, if they are accorded the status of
necessarily the norm in case of unorganised workers Workers’ Facilitation Centers under the Act’s design.
(Saxena, 2009). However, there is a glaring exclusion of trade unions
and civil society organisations in the final design of
Identity Cards. While the Act does talk about portable the Act. They appear to have been deliberately kept
smart identity cards, it is unclear if a single card can out to weaken the role of workers’ representatives
be used to access benefits disbursed by a variety (Sankaran, 2009).

38
 Legislating Social Security in India

National and State Social Security Boards. While the

government removed the ‘advisory’ tag from these
boards, their powers and composition remain limited.
The Standing Committee emphasised the need for
strengthening their role in the implementation of the
Act. However, the government appears to have paid
little heed to such advice.

Synchronisation with Existing Schemes. The actual

efficacy of the Act remains clouded by its reluctance
to clarify how its provisions will sync with the existing
programmes of the central and state governments

39
 CHAPTER 4

CONTEMPORARY DIRECTION OF
THE SOCIAL SECURITY POLICY

The Ministry of Labour and Employment (MoLE), other stakeholders on DLCSSW since the publication
Government of India published a revised Draft Labour of the first draft to come out with a revised draft in
Code on Social Security and Welfare (henceforth, the March 2018
Code) on March 27, 2018.11 The purpose of the Code
was to simplify, rationalise, consolidate and amend 4.1 A Framework for a Review
all existing labour laws related to social security (15 of the Code
labour laws including the EPF Act, the ESI Act, the
This report is cognisant of the fact that the Code in
Maternity Benefit Act, the Payment of Gratuity Act,
its draft form can at best reveal the intentions and
the Employees Compensation Act, the Unorganised
direction of the present government’s policy on social
Social Security Act and various welfare cess /fund
security. As we will see later in this chapter, trade
acts) into one Code on Social Security and Welfare.
unions have been able to negotiate key changes in
the second draft. In this light, this chapter teases out
In MoLE’s own words, the core principles that have
the broad policy directions on some important issues
been incorporated are:12
contained in the Code. This is done as an exercise
(a) Universalisation of the entire workforce to answer some fundamental questions that may be
(b) Integration of fragmented schemes useful in enriching public discussions on this policy.
This is done while being fully aware that the final
(c) Decentralisation of administration policy may acquire a distinct shape and approach
(d) Rights-based approach when it is legislated upon.

It is the third draft Code in a series of four separate Among the multiple possible vantage points for
codes proposed to be made into laws to amalgamate reviewing the Code, we choose a direct approach in
the existing 44 different central laws on the subject trying to answer questions that a common worker
of labour . The other two draft codes that preceded may pose to the Code.
the Draft Labour Code on Social Security and Welfare
(DLCSSW) cover laws related to industrial relations In subsequent sections, we lay out the provisions of
and wages. The last of the four codes was published the Code on the following aspects:
on July 20, 2018. It covers laws related to occupational 1. Nature of benefits that come under this Code
safety, health and working conditions.
2. Quantum of each benefit to be received under the
MoLE held discussions with workers, employers and Code

11. This chapter reviews the Code with reference to the most updated draft published on March 27, 2018 and available on the Ministry of
Labour and Employment’s website at: https://labour.gov.in/sites/default/files/SS%20Code%202018-03-28.pdf
12. As per the presentation made by the Ministry of Labour and Employment on the first draft of the Code. These principles are implied but
not explicitly stated in one place in the presentation made on the second Draft of 2018.
Social Security for Unorganised Workers in India

3. Eligibility criteria for receiving the benefits b. Role of private agencies in its implementation
a. Among various employment types c. Power-sharing between the center and states
under the new regime
b. Among employment sectors
6. Proposed time-frame for implementation
c. ‘Dependent’ family members
7. Grievance redressal mechanisms
d. Among internal and international migrant
workers This chapter first summarises the provisions of
the Code. This is followed by a preliminary critical
e. Definition of ‘beneficiary’ as ‘scheme member’
commentary in light of the issues raised in the other
chapters.
4. Means of participation in social security schemes:
a. VIKAS card 4.2 Nature of Benefits
b. Employment and income challans Clause 24.5 of Part D of the Code lists the types of
c. Contributions schemes to be designed under the new framework.
The nature of benefits under these schemes is
5. The institutional structure of the new social supposed to correspond to the benefits currently
security regime: provided under EPF, ESIC and UWSSA (Table 4.1).

a. Ways of funding schemes under the Code

Table 4.1: Summary of various beneficiary schemes and situations guiding the benefits.
Name of the Situations under which benefits
Benefits
Scheme shall be provided
Superannuation pension and Upon cessation of employment due to superannuation or
Pension retirement pension retirement
(a)
Scheme
Family pension to family members Upon death of the pensioner
Dependents’ Dependents’ benefits to Upon death of the scheme
(b)
benefit Scheme a scheme member’s dependents member during work life
Disablement Disablement benefits to a scheme A scheme member who meets with an accident during
(c)
benefit Scheme member service or work life
Sickness
Providing for periodical cash In case scheme member
(d) Benefit
payments to scheme members contracts sickness that requires confinement
Scheme
In case of confinement or
Maternity Providing periodical or other
miscarriage or sickness arising out of a pregnancy,
(e) Benefit payments in the form of
confinement, premature birth of a child or miscarriage to
Scheme maternity assistance
a woman scheme member
Provision of medical treatment
Medical Any condition of the scheme member or his immediate
and attendance to scheme
(f) Benefit family which requires medical treatment
members and their immediate
Scheme and attendance
families
Providing an unemployment
Unemployment In case of loss of job or earning due to lay-off,
allowance to a scheme member; providing
(g) Benefit retrenchment or any other eventuality specified in the
measures for re-employment of persons rendered
Scheme scheme
unemployed
Providing Provident Fund benefits
Provident Fund to scheme members wherein
(h) Upon any eventuality specified in the scheme
Scheme the members’ contribution can be invested and
made available.
International
(a) Superannuation pension or
workers’ Upon cessation of employment due to superannuation or
(i) retirement pension to
pension retirement
international workers;
scheme
Source: Labour Code on Social Security, 2018 Version 2.1, published on March 27, 2018, pp. 81-82.

42
 Contemporary Direction of the Social Security Policy

The Code does not commit itself to a specific bundle the appropriate government. The present draft just
of benefits that constitute the social security floor clarifies that Socio-Economic Categories (SEC) I, II, III
in the government’s view. The details of the benefits and IV, will contain workers from the strongest to the
are to be contained in (yet to be framed) subordinate weakest socioeconomic status, in that order. Special
legislations promulgating a plethora of schemes for provisions have been made for SEC IV category
various benefits. Dedicated chapters address details workers. For instance, workers in this category are
of gratuity and maternity benefits. The details of exempted from paying the additional ‘administrative
the schemes, where specified, are largely based on charges’ (Clause 38.2.b). Further, both employees
existing schemes and programmes, and do not stretch and self-employed workers categorised under SEC
beyond these in terms of the nature of benefits. IV are also exempt from contributing towards their
social security accounts (Clause 20.3).
In addition, as per Clause 22.2, existing welfare funds
like the building and other construction workers fund On the question of the nature of existing benefits
and the beedi workers fund are to be reconstituted under 16 schemes with organisations like EPFO
under each state board under the framework of the and ESIC Part T on the Transitionary Provisions
Code. This re-organisation comes with the proposal states that the existing schemes and funds and their
of two new sectoral funds – for domestic workers respective organisations will cease to exist under
and agricultural workers. At the same time, the the Code. The assets, liabilities, rights, accumulated
existing funds have been re-imagined as Contribution funds and ongoing litigations, etc. will be apportioned
Augmentation Funds (Clause 22.1) where money to the state level bodies under a new institutional
is credited through budgetary allocations or cess. framework.
These funds are considered instrumental for
categories of workers for whom the establishment of 4.3 Categories of Workers That
a clear employer-employee relationship may not be Will Benefit
possible. However, in an introduction to the second
draft of the Code, it is clarified that the provision of Types of Employment
cess collection has been included only as an alternate Clause 2.42 of the Code provides the definition of
mechanism for the collection of contributions from ‘employee’ to be covered under the provisions. It
workers and employers. In cases, where cess is effectively overs a wide range of ‘paid employment:’
levied, the employers’ contribution rates may be 1) part-time worker
accordingly reduced. Such augmentation funds
have been proposed only for workers classified in 2) casual worker
the Socio-Economic Category IV based on their 3) fixed term worker
registration details.
4) piece rate worker including commission worker

It is germane here to point out that the Code envisions 5) apprentice not covered under the Apprentice Act,
differential treatment of different classes of workers 1961
based on a 4-level socioeconomic categorisation of 6) informal worker
those who register (Clause 11A.3). The classification
is based on the following broad criteria: (a) Income 7) outworker
(b) Source of income of household (c) Social profile, 8) seasonal worker
(d) Demographic profile (e) Immovable assets owned
9) wage worker
(f) Land holding, and nature of land held (g) Movable
assets of such kind as may be stipulated (h) Nature 10) domestic worker
of dwelling (i) Occupation (j) Nature of employment 11) home-based worker
(k) Nature of disabilities or adversities of the bread-
winner (Clause 11A.4). 12) a railway servant as defined in Clause (34) of
Clause 2 of the Railways Act, 1989 (24 of 1989),
Further details on the methodology of such a excluding those:
categorisation have been left to future stipulation by

43
Social Security for Unorganised Workers in India

a. permanently employed in any administrative 7. any charitable activity or advocacy

district or
8. any activity by a Non-Governmental Organisation
b. sub-divisional office of a railway
9. any religious service or activity
13) a master, seaman, a captain or other members
10. any activity by a political party or a trade union
of the crew of a ship or an aircraft registered in
India 11. any educational institution
12.
any agriculture, horticulture, animal husbandry,
14) a person recruited by a company for work
fishery,
abroad
13. operations of railways, waterways, airlines or any
15) a person recruited as driver, helper, mechanic,
other transport service
cleaner or in any other capacity in connection
with a motor vehicle registered in India, and 14. any trade, commerce or manufacture
who is employed outside India 15. any adventure or concern in the nature of trade,
commerce or manufacture
16) any worker employed or engaged on ‘retainer-
ship fee’ basis 16. any transaction in connection with, or incidental or
ancillary to, any trade, commerce or manufacture,
Employees covered under the Army Act, 1950 (46 of
adventure or concern
1950) or the Air Force Act, 1950, or the Navy Act, 1957,
Apprentices Act, 1961 and employees of the police
force and prisons are excluded from the purview of
Dependent Categories
the Code. Clause 2.37 lists the types of kin who may benefit
from the provisions of the Code:
Others are covered under 3 types of ‘workers’ 1) a widow/widower, a biological or adopted son
category (Clause 2.140): (or transgender) who has not attained the age
(a) an employee of 25 years, an unmarried biological or adopted
daughter
(b) a non-employee
2) parents
(c) an international worker
3) a biological or adopted offspring who has attained
Besides continuing with exclusions in these the age of 25 and who is infirm, if wholly dependent
categories of employees, the category of ‘worker’ on the earnings of the deceased person at the
also excludes those providing ‘honorary services’ – time of his death
effectively the unpaid work of ‘house-wives/house-
husbands’ in running their households. 4) if wholly or in part dependent on the earnings of
the deceased person at the time of his death —
Sectors of Employment a) a minor biological or adopted daughter, married
Clause 2.15 of the Code lists the sectors of or widowed
employment that are covered under the definition of b) a minor brother, minor transgender sibling or
‘business’, as: an unmarried sister or a widowed sister if a
minor
1. any factory
c) a widowed daughter-in-law
2. any mine
d) a minor offspring of a pre-deceased son
3. any plantation
e) a minor offspring of a pre-deceased daughter
4. any shop where no parent of the said offspring is alive
5. a provision of service, but excluding services f) a grand-parent if no earning parent of the
provided by an employee person is alive
6. any contractor or sub-contractor

44
 Contemporary Direction of the Social Security Policy

g) parents of the spouse if the spouse is not cum-challan by (a) own account worker, (b) head of
alive household, that employs domestic help for running
the household, (c) employer of establishment
The Clause leaves out the category of abandoned and
belonging to the unorganised sector (d) landlord,
divorced women.
and (e) any entity liable to pay cess under this Code
(Clause 37.2). The return-cum-challan is required to
4.4 Worker as a Scheme Member have details of income, employment and the form
Not all workers who register under the Code, of livelihood as may be specified in the rules to be
automatically become beneficiaries of the schemes. prescribed later. Failure to furnish such challans by
Three critical conditions have to be met by every any of the above entities is bound to be penalised.
worker to avail or continue to avail benefits under the Moreover, those workers who are found unable to
Code. comply with the requirement of filing the returns for
any reason will after a stipulated period lose their
The first condition is that every worker is required registration as scheme members.
to register in an Aadhar-based registration system
for a social security account called Vishwakarma An implied benefit of such a system of registration,
Karmik Suraksha Khata (VIKAS) (Clause 11). contributions and filing of returns by both workers
That this registration is mandatory and failing in and employers is the development of an authoritative
being registered can bar a worker from not only mapping of the plethora of employer-employee
accessing social security benefits but also from legal relationships, registration of nearly 500 million
employment in general. Clause 11.4 clearly states workers in the organised and unorganised sectors
that ‘No – (a) entity shall employ any worker beyond and partial formalisation of all paid work through
such period as may be stipulated; or (b) contractor social security and other protections offered in the
shall undertake execution of any work for an entity Code.
or provide services of contract workers to any entity;
unless the said worker or workers are registered.’
4.5 The Universalisation of
On the positive side, the VIKAS account is meant to
enable portability of benefits for internal (Clause 31)
Contributory Social Security
and international migrants (Clause 20.5, etc.). The primary sources of funding social security
schemes under the Code are only the contributions
The second condition is amply clear in the definition made by workers (through a stipulated share of their
of ‘scheme member’: ‘“scheme member” means a monthly wages) and employers (through stipulated
covered worker in respect of whom subscription contributions, or cess) (Clause 2.32 and DLCSSW,
towards the Scheme under consideration are or 2018: 11). Without going into the details of the means
were payable under this code and who is, by reason for calculating the contribution liabilities, involving
thereof, entitled to the benefits provided under the ‘deemed wages’, ‘benefit wages’, ‘ceiling wages’ and
concerned Scheme’ (Clause 2.111). In other words, the national minimum wage, we describe the rate
only those workers are treated as scheme members of contribution for various categories of workers,
or beneficiaries under the Code who have: one, employers and other employing entities.
completed all processes of registration to activate
a VIKAS account; and two, are able to make or draw The contribution per worker to be made by employers
contributions from the account as per the terms of and various forms of employing entities is capped
the Code. at 17.5 percent of the deemed wage of every worker
employed by them. Further, depending on any
While SEC IV workers may be exempt from this cess levied or exemptions provided by appropriate
requirement, workers from other categories who fail governments, the contribution by employers can be
to make contributions regularly also fall out of the relaxed partially or completely.
Code’s security net.
For the four categories of workers further divided
The third condition for becoming a scheme member along lines of employees (all types of wage workers
under the Code is the periodic filing of a return- with established employer-employee relationships)

45
Social Security for Unorganised Workers in India

and non-employees (self-employed workers), the (n) Salt workers’ Contribution Augmentation Fund
rates of contributions as laid out are given in Table
(o) Agricultural workers’ Contribution Augmentation
4.2 (Clause 20.3).
Fund

Workers are also allowed to make ‘voluntary

An important point to note about these Augmentation
contributions’ over and above their ‘dues’ (Clause
Funds is that these funds will also be recipients of the
2.136).
income generated out of the ‘professional investment’
of the accumulated funds in each of these categories
The other source that may contribute in supporting
(Clause 22.7).
SEC IV workers (who are exempt from making
contributions) is described as the Contribution
Augmentation Fund (Clause 22.1). As pointed out
4.6 A Brand New National Social
earlier, the source of money for this fund is budgetary Security Administration
allocations and cess. Part B of the Code lays out a whole new institutional
framework for the design and implementation of
Besides this general role of the fund, the central social security schemes across all states of the
government is expected to reconstitute the existing country. The new system has the following bodies in
and some new sectoral welfare funds under the state order of hierarchy:
boards for the following 15 sectors (Clause 22.2): 1) National Social Security Council of India

(a)
Building and other construction workers a) Regulator General of Social Security of India
Contribution Augmentation Fund b) Central Advisory Committees
(b) Iron ore mine workers’ Contribution Augmentation 2) Central Social Security Board
Fund
a) Director General of the Central Board
(c)
Aluminum ore mine workers’ Contribution
b) Executive Committee
Augmentation Fund
3) State Social Security Board
(d)
Manganese ore mine workers’ Contribution
Augmentation Fund a) a Commissioner of Social Security in each
State
(e)
Chrome ore mine workers’ Contribution
Augmentation Fund b) Standing Committees

(f)
Copper ore mine workers’ Contribution c) Medical Benefit Council
Augmentation Fund d) State Advisory Committees
(g) Zinc ore mine workers’ Contribution Augmentation
Fund The National Council is to be headed by the Prime
Minister and constituted of key representatives
(h) Mica mine workers’ Contribution Augmentation
of central and state governments along with
Fund
representatives of employers, workers and experts
(i)
Limestone mine workers’ Contribution (Clause 3.3). Similarly, the state social security boards
Augmentation Fund will be headed by the chief ministers of the respective
(j)
Dolomite mine workers’ Contribution states (Clause 3.9). The Code goes on to detail the
Augmentation Fund constitution and functions of each of these bodies.
Going into these details is beyond the scope of this
(k) Beedi workers’ Contribution Augmentation Fund chapter. However, it is important to briefly discuss the
(l) Audio-visual workers’ Contribution Augmentation hierarchy set for the new institutional structure.
Fund
Part S of the Code lays out the hierarchical relationship
(m)
Domestic workers’ Contribution Augmentation
among all the bodies of the new system. It can be
Fund
comfortably concluded from this and various parts

46
 Contemporary Direction of the Social Security Policy

of the Code that the National Council chaired by the companies with a credible presence in consumer and
Prime Minister will reign supreme above all the other capitals market. The Code relies on an observation
bodies including those in the states (Clause 144). This by NCL-II (DLCSSW, 2018: 203) which talks about
top-down system is further confirmed by the Order of the international experience in outsourcing and
Precedence outlined in the Code (Clause 146.2) as: subcontracting delivery services under such systems
and the need for India to adapt similar practices
‘Order of Precedence for the purpose of the provisions providing autonomy to the agencies. When it comes
of this Part shall be: to intermediate agencies, the Code, at no point makes
it explicit that key functions will be ‘outsourced’
A. National Council and thereafter Central Board and
or ‘subcontracted’ to private companies. However,
thereafter a State Board, and
with the indicative criteria for the selection of the
B. Central Government and thereafter a State intermediate agencies and their control resting with
Government’ the Central Board, we can expect large corporate
players to be the main beneficiaries of this new
As is clear from the ongoing developments in service delivery ‘market’ being created under the
negotiations on the provisions of the Code, and Code. That private companies will enter this market
given that labour remains a concurrent subject in the with ‘for-profit’ ventures is clear from the eligibility
constitutional system, the exact shape of the final criteria laid out for them.
institutional framework may be very different from
the proposed model in the Code. With these key aspects of the provisions of the Draft
Code on Social Security and Welfare (2018), we
Delivering Social Security Services conclude the summary of key imports of the Code
While the more than 200-page-long Code delves for workers, employers, governments and third-
deep into many aspects of the proposed national party entities. The following section gives a brief
system of social security, here we attempt to draw preliminary comment on the Code based on the
attention to a critical provision of the Code regarding information available till now.
the role of service delivery. Part K of the Code lays
out the various roles in the service delivery system 4.7 A Preliminary Comment
that may be performed by what have been called the on the Code
‘intermediate agencies’. Some of these roles can This is a preliminary commentary on the Code as at
include any fund manager agency, point of presence the time of the publication of this report, the Code
agency, service delivery agency, benefit disbursement was a draft and some outcomes of the ongoing
agency or recordkeeping agency (Clause 2.62 and negotiations suggest that we can expect some major
Clause 88.1). changes in its coverage. For instance, recently the
government dropped the provisions of subsuming the
To get a sense of the type of entities that may play the institutions and resources of ESIC and EPFO in the
role of intermediate agencies, we look at Clause 88.2: new institutional structure of the Code in response
to demands by trade unions.13 News reports in fact
‘The intermediate agency, for grant of license, shall claim that the entire provision of forming the Prime
satisfy the eligibility norms as may be stipulated, Minister-headed National Council at the top of the
including minimum capital requirement, past track new institutional structure has also been dropped.
record, ability to provide guaranteed returns, cost and However, it remains to be seen how the outcomes
fees, geographical reach, customer base, information of these negotiations translate in a revised draft of
technology capability, human resources and such the Code that may be published soon. In this light, we
other matters as may be stipulated.’ attempt to work with the broad policy contours laid
out by the two drafts of the Code instead of examining
The nature of eligibility criteria offers an indication the specific details of each provision.
that such roles may be taken up by private

13. https://www.news18.com/news/business/labour-minister-drops-contentious-clauses-in-new-social-security-code-1952683.html

47
Social Security for Unorganised Workers in India

To begin with, the Code is a welcome move to religious minorities continue to be at the bottom of the
standardise and unify the disparate institutional socioeconomic status even if they move to relatively
systems linking a plethora of social security schemes better organised sectors/forms of employment.
currently in force. It is also commendable that, at Appreciating the historic resilience of the oppressive
least in principle, the Code envisages a gradual social structures of caste, gender and religion, and
movement towards universal social security. The the evident limitations of post-independence policies
definitions included in Part A of the Code appear to to bring about equality for these groups in the labour
indicate an inclusive approach towards highly diverse market, it is only fair to assert that a welfare or social
populations, sectors and forms of employment policy needs to mainstream affirmative actions for
particularly of unorganised workers. A longstanding these groups within larger institutional frameworks.
demand of the unorganised workers that their status Even as the Code attempts to address the internal
as ‘workers’ be recognised is sought to be addressed differentiations of the working population through
through the massive registration system for half a the socioeconomic categories, the sizeable Draft
billion workers envisaged through VIKAS accounts. of the Code has no mention of the word ‘caste’, no
Further, the Code is fair in making registration mention of ‘religion’, four mentions of ‘gender’, two
mandatory for employers including recruitment of ‘transgender’, one mention of ‘discrimination’ (in
intermediaries as well as households employing the context of maternity benefits) and no mention
domestic workers. In terms of the nature of benefits, of ‘inequality’. The category of SEC IV does include
the Code attempts to integrate a large number and social status among the criteria for inclusion.
types of benefits into an integrated system. A clear However, without a meaningful reference to labour
commitment to making the benefits portable comes market inequalities based on social identities, it
as a huge relief for migrant workers. The vexed issue leaves too much to hope that the marginalised social
of funding of social security schemes has also been groups will find equitable treatment within SEC IV.
frontally addressed albeit in favor of a contributory
system. In fact, the Code tries to allay employers’ fears The Code also tries to unambiguously link social
of rising cess collection by governments by clarifying security with employment by correlating employers
that cess will be a mechanism of secondary choice and entities’ obligations with their investments in
where employer-employee relationships cannot ensuring Occupational Safety and Health (OSH).
be ascertained. Moreover, the Code lays detailed The matter of OSH is especially important for
obligations, penalties and grievance redressal unorganised workers and this has been addressed in
systems for realising the effective implementation of the fourth Draft Code on OSH published in July 2018.
the schemes. However, early comments on the OSH Code find that
it will ‘exclude at least 95% in any sector that the
Having laid out the broad positive imports of the policy code covers which employs fewer than 10 workers,
framework embodied in the Code, it is important to according to the Sixth Economic Census, 2013-14,
also put forth some concerns of common workers. although the share will be much less if we exclude
own-account establishments, but the exclusion will
Chapter 1 of this report builds on NCEUS’ findings still be significant.’14 Hence, the linkages between
to emphasise the social conduits of the fundamental social security and employment through the OSH
elements of economic vulnerability for workers in the Code in effect, remain tentative at this stage.
labour market. It concludes that irrespective of the
type of employment, the indicators of vulnerability It is important to tie the question of social security
and inequality move in tandem with the movement of to employment for at least two key reasons. One,
marginalised social groups across sectors and forms social security benefits are a component of social
of employment – be it the organised sector or the wages that are every workers’ right to ensure that
unorganised sector. So, women, dalits, adivasis and they can sustain themselves and their families over

14. https://www.livemint.com/Opinion/1ssCkngxUDXarDBszRKA4K/Opinion--Workers-safety-code-excludes-more-workers-than-it.html

48
 Contemporary Direction of the Social Security Policy

long periods when they might be unable to work due the category of dependents. Unpaid workers are not
to reasons of age, disability or death. Two, delinking recognised as legitimate claimants of a genuinely
social security from a person’s work (paid or unpaid), universal social security even as they effectively
may feed into the patronage politics of a benevolent subsidise the cost of labour in the larger economy
state and project social security as a freebie than through their unpaid work. In doing so, the Code
as a right. However, the Code fails to take the next persists with the artificial distinction between ‘work’
logical step after recognising women’s unpaid work and ‘non-work’, where the state refuses to recognise
as ‘honorary services’ by slotting unpaid workers into ‘work’ that is not commodified by the market.

49
 APPENDIX

The Working Peoples’ Charter (WPC) has been should be along the lines of the provisions of the
consistently advocating for a basic minimum Construction Workers’ Welfare Board.
social security package to be universally provided
to all workers through its Right to Social Security Further, the government should take the following
Campaign. steps for the implementation of social security
programmes
The National Convention on Social Security held on 23
4. 4. Ensure, within six months, that all informal
November, 2017, with representation from 18 states
workers are provided with ID cards for social
of India, recommended that the central government
security which should be solely based on self-
provide the following:
declaration. Such registrations should not use
1. Old Age Protection. All old aged persons (men biometric identification systems. Also, these
and women), widows and physically/challenged must be independent of all existing identification
persons, not under a formal social security cover, cards, such as Aadhar and U-WIN. The union
should be provided with a pension which is at the budget must bear complete fiscal responsibility
level of half of the national minimum wage. The for this process.
age of eligibility for pension must be revised to
5. A single ministry should be created which will
50 years for women and 55 years for men in the
responsible for the provision and implementation
informal sector. Within this, special relaxations
of social security. All necessary funds for the
must be made for particularly vulnerable workers
programmes should be transferred to the
in various occupations and social groups.
Unorganised Workers Social Security Fund.
2. Health and Maternity. The universal health
6. Amendments should be made to the Unorganised
package should be made available through the
Workers Social Security Act (UWSSA) 2008 to
public health system and should cover OPD and
make the provision of universal social security
diagnostics. Women must be unconditionally
schemes rights based and with universal
entitled to a maternity benefit for nine months
coverage. Portability must be ensured.
(three months before delivery and six months
Nonetheless, the UWSSA 2008 Act should be
after delivery) at an amount not less than half the
implemented in its full spirit.
minimum wage.
7. The creation of the National and State Social
3. Life and Disability Cover: Workers must be
Security Boards should be mandatory under the
provided an insurance of Rs 100,000 for death
Act and should be done within six months. The
by natural causes and Rs 200,000 for death
boards should be given the necessary powers.
or permanent disability due to accidents. This
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