On 16 May 2006, after working and re-working on the Unorganised Sector Workers’ Bill, the National Commission for Enterprises in the Unorganised Sector (NCEUS) headed by Arjun Sengupta, submitted to Prime Minister Manmohan Singh, a full-fledged report rationalising their earlier Bills. This report states that the new and modified draft of the Unorganised Sector Workers’ Bill will cover 362 million workers in the informal sector.

“The Bill is still the same. Only a few amendments have been made,” says Dr K.P. Kannan, Member of the Commission. One of the major amendments made is the suggestion of an Old Age Pension for Below Poverty Line (BPL) workers when they reach the age of 60. Instead of the Provident Fund (PF) scheme, a monthly pension of Rs 200 is to be paid by the central government to aged workers. This will ensure that all old-age BPL workers will get a minimum protection. This can not be guaranteed in a PF scheme unless the worker has been registered for 20 years or more. The Commission has shown that the additional net burden on government on this account will be comparatively small. The pension scheme will cover an estimated 1.35 crore BPL old-age workers in the first year, compared to a coverage of about 72 lakhs under the National Old Age Pension Scheme, which is restricted to the destitute old above the age of 65 years. For all other workers, who contribute to the scheme, PF will be given.

NCEUS, an advisory body and a watchdog for the informal sector, was constituted by the UPA government to recommend measures necessary for bringing about improvement in the productivity of these enterprises and the generation of large-scale employment opportunities on a sustainable basis, particularly in rural areas, enhancing the competitiveness of the sector in the merging global environment.

After much dilly dallying and three draft Bills, including one by the National Advisory Council (NAC) previously headed by Congress president, Sonia Gandhi, and another by the Labour Ministry, the new Bill is significant as it coincides with the second anniversary of the UPA government.

The Commission has proposed a National Minimum Social Security Scheme for all unorganised workers. Besides the pension for old-age BPL workers and PF for the above poverty line (APL) workers, the scheme includes health benefits to cover hospitalisation and sickness allowance, maternity benefits and life insurance to cover natural and accidental death.

While addressing a press conference, Dr Sengupta said clearly, “It’s not the Commission’s job to say how the financial cost will be borne. That is the responsibility of the government.” According to him, the government could find the money through reallocation, from the existing revenue or by imposing a social security tax. “The expenditure will be worth it considering the huge benefits from the scheme for the poor workers,” he said.

The NCEUS reckons that the cost of the scheme, a much-debated issue that is said to have delayed the Bill, to be Rs 7,367 crores (.20 per cent of GDP) in the first year and Rs 25,401 crores (.48 per cent of GDP) in the fifth year when it reaches the last worker.

The large network of post offices in the country are to play a major role in making payments under the new Bill, which proposes the constitution of a nodal National Social Security Board (NSSB) headed by a Chief Executive Officer. The Commission has also held wide-ranging discussions with the Life Insurance Corporation of India and the General Insurance Corporation during the making of the Bill, says Dr Sengupta.

Both the central and the state governments will have significant roles in the implementation of the scheme, with the complementary role of NGOs and trade unions. However, the draft Bill omits the mention of ‘central trade unions’, which could become the bone of contention. At the state level, the responsibility for implementing the scheme rests with the State Social Security Boards followed by Worker Facilitation Centres, the actual places where workers will do most of their interaction.

Informal workers in the unorganised sector, including small and marginal farmers, agricultural workers and domestic workers, and informal workers in the organised sector will be covered under the scheme.

According to the Commission, women constitute 118 million of the 362 million unorganised workers in the country. The Bill also speaks of identity cards for the informal workers bearing distinct social security numbers. Under the scheme, the worker, employer and the government will have to pay Re 1, and if the employer cannot be identified, the contribution will be borne by the central government. Hospitalisation benefits for workers and their families will be Rs 15,000 per year, maternity benefits at Rs 1,000 and the life insurance amount will be fixed at Rs 15,000.