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The Long Road to Social Security

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The four working papers published in this special newsletter deal with the broad theme of social security to the workers in India’s Informal Economy. As is well known by now, India has emerged as one of the very few economies with a high rate of growth of around 8 to 9 per cent per annum. Along with China whose growth rate is higher than that of India this phenomenon of high growth in two very large economies has the potential to change the world economic order in the medium to long term. However, within India the excitement over such a high growth performance of the economy is not shared by a vast majority of the people in general and the working poor in particular. This is because the benefits of this high growth spanning more than a quarter century have not trickled down to the working poor and their families so as to pull them out of the trap of poverty and economic vulnerability.

The realization that India’s high growth performance has in fact led to the strengthening of a dualistic economy – one represented by the formal sector with high productivity and income as well as social security and the other represented by the informal sector with low productivity, low income and very little of social security but accounting for nearly 86% of employment – the United Progressive Alliance Government assured the people in their election manifesto in 2004 that they will take a number of steps to provide social and livelihood security to the vast majority of the working poor along with measures to reduce the widening the gap between rich and poor.

It is in this context that a knowledge generation research project was initiated by Jan Breman of the Amsterdam School of Social Science Research and myself, K.P. Kannan, of the Centre for Development Studies, Trivandrum, Kerala, India and supported by Hivos. The main objective of this research project is to monitor the implementation of the two right-based national social security schemes in India viz., the National Rural Employment Guarantee Scheme (NREGA) and the National Social Health Insurance Scheme called the Rashtriya Swastha Bhima Yojana (RSBY). This research project is still an ongoing one because it is attempting to the document the process of implementation and its outcomes in selected local contexts in five different states in India. However, the four working papers published here are intended as a background to this research project.

The political economy of unfree labour in South Asia

This paper by Jan Breman discusses the political economy of unfree labour in the context of South Asia by focusing on the issue of the debt bondage. He discusses the narrow definition used in India to describe the prevalence of bonded labour and provides a critique of the same. According to him the prevalence of bonded labour due to debt bondage could be not less than 10% of the working population that would work out to nearly 40 million people as of 2005. While his paper focused mainly on the Indian situation he also notes the prevalence of debt bondage in the neighboring country of Pakistan where power and dominance of landlords are quite formidable and they are often in collision with local warlords. In terms of policy intervention Breman advocates both direct and indirect actions.

The challenge of universal coverage for the working poor in India

The paper by K.P. Kannan deals with the challenge of universal coverage for the working poor in India. He draws attention to the fact that both basic social security and contingent social security are important from the point of view of the working poor. The fact that social security entitlements as part of one’s employment is confined only to less than 10 percent of India’s work force points to the enormity of the problem of coverage and the long road that lie ahead. While welcoming the two major national legislations (National Rural Employment Guarantee Act 2005 and Unorganised Workers Social Security Act 2008), he points out the limited coverage as well as the limited entitlements of these legislations. It is also significant to note that the Unorganised Workers Social Security Act 2008 is a collection of piece meal schemes without any logic leaving behind vast numbers of vulnerable workers to fend for themselves. The main message of the paper is to point out the need to create a social floor consisting of a national minimum social security, minimum conditions of work and a national minimum wage so that no one is allowed to fall below this floor.

Afluence, vulnerability and the provision of social security

This paper by Varinder Jain is a study in assessing a sub-national state’s concern for the working poor in India. The state that he has selected is the prosperous state of Punjab in North West India. Despite Punjab’s relative prosperity both in rural and urban areas, what Jain finds is the pervasiveness of vulnerable livelihoods among large segments of the working persons and their households. While there are a few state-funded social security schemes in Punjab they hardly address the widespread problem of economic vulnerability. He traces the apathy of the state towards the conditions of the working masses to the nature of politics and the dominance of the farmers’ lobby in the state. On the other side collective organization of workers have become weaker over time both in rural and urban areas.

Contingent social security schemes for unorganised workers in India

As per the estimates provided by the National Commission for Enterprises in the Unorganised Sector (NCEUS), the unorganised workers constitute 92.37 percent of the Indian workforce – out of which, 86.01 percent eke out their living by performing various activities related to the unorganised sector whereas 6.36 percent work as unorganised workers in the organised segment. Exposure to various vulnerabilities is the common plight of these workers.

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