The government budget is considered an expression of its intentions, with regard to its expenditure over the following year, and its receipts to meet such expenditure in that year. Given this, the Ministry of Labour and Employment`s (MoLE’s) budget should reflect the nature of its commitment to social security for unorganised workers.

The `Notes on Demands for Grants, 2007—2008 and 2008—09` of the MoLE shows a figure of Rs 5 crores (Table 1) under social security for unorganised sector workers.

There is another figure of Rs 200 crores under the head, ‘Health insurance for unorganised sector workers’, making the total demand Rs 205 crores. The explanatory note to `social security for unorganised sector workers’ says that the government has already introduced a legislation in the Parliament to provide social security for workers in the unorganised sector, who constitute 94 per cent of the labour force. It further says, “One of the major insecurities of the workers in the unorganised sector is the inability of the workers to find money for medical care for themselves and their family members. To meet the requirement of health insecurity, the government has made a beginning by launching the Rashtriya Swasthya Bima Yojana for BPL workers and their family members on 1 October 2007. The benefits to workers will start accruing in phases from 1 April 2008. The scheme provides for a health insurance cover of Rs 30,000 for every BPL worker and his family.”

Of the total demand of Rs 1187.63 crores for ‘Social Security for Labour’, Rs 967.22 crores is for the government`s contribution to Employees Pension Scheme 1995 that provides for family pension and life insurance benefits to industrial workers, who are within the Provident Fund scheme. The demand for Rs 15.41 crores is the central government’s contribution to the plantation workers in Assam, governed by the Assam Tea Plantation Provident Fund and Family Pension and Employees Deposit Linked Insurance Act administered by the Assam government.

Why is public provisioning for social security for workers, especially the unorganised workers, in India so ridiculously low? It is argued here that social security was not seen as a right that all workers were entitled to but as something to be accomplished as a consequence of economic development, where a strong articulation of the non-viability of social security for all workers arose because the state looked at social security as an `economic, social and cultural (ESC)’ entitlement. It is also been argued that the provision of social security for some has become the justification for denial for many, due to the creation of a dual policy on social security.

The Non-Viability of Social Security

Social Security and Distributive Justice

‘Work’ establishes a distinctive human relationship with nature and makes humans a ‘species-being’. Amartya Sen has emphasised the importance of work in giving individuals identity, respect and purpose in life. But work is not always in the realm of freedom. All those who work need not enjoy their work. Workers usually experience alienation. The labour theory of value says that ‘work’ or ‘labour’ is the source of all value; under capitalism, all value generated in surplus labour’ beyond necessary labour’ is denied to workers. Given this, a semblance of equity or distributive justice in this situation may be achieved through wages, the portion of the value returned to the worker as opposed to the value accrued by the employer. A second measure that brings actual equity and distributive justice is the provision of social security, a measure by the state to meet the contingencies in the lives of workers and their families, as a right by the state.

The International Labour Organisation defines social security as “the protection which society provides for its members through a series of public measures against the economic and social distress that otherwise would be caused by the stoppage or substantial reduction of earnings resulting from sickness, maternity, employment injury, invalidity and death; the provision of medical care; and the provision of subsidies for families with children” (ILO, 1984). The International Labour Conference of 2001 further affirmed that social security “is a basic human right and a fundamental means for creating social cohesion”. Rapporteurs Maria Virginia Bras Gomes and Eibe Riedel of the UN Committee on Economic, Social and Cultural Rights, in their General Comment No.19 on Article 9 state that (1) the right to social security is of central importance in guaranteeing human dignity for all persons when they are faced with circumstances that deprive them of their capacity to fully realise their covenant rights; (2) the right to social security encompasses the right to access and maintain benefits, whether in cash or in kind, without discrimination, in order to secure protection, inter alia, from (a) lack of work-related income caused by sickness, disability, maternity, employment injury, unemployment, old age or death of a family member; (b) unaffordable access to health care; (c) insufficient family support, particularly for children and adult dependents; (3) social security, through its redistributive character, plays an important role in poverty reduction and alleviation, preventing social exclusion and promoting social inclusion. [General Comments No. 19 on Article 9 (right to social security) of the International Covenant on Economic, Social and Cultural Rights (ICESCR), May 2006]

Social Security Not a Justiciable Right

Under international commitments and obligations, India is expected to conceive of social security within the framework of human rights and to provide social security to all citizens equally. As a member of the United Nations, India has signed the Universal Declaration of Human Rights (UDHR), the ICESCR, the Convention on the Rights of the Child (CRC) and the Convention on the Elimination of all forms of Discrimination against Women (CEDAW). Articles 21 to 31 of UN ‘International Convention of on the Protection of the Rights of All Migrant Workers and Members of Their Families 1991’ provides for social security and other labour rights of migrant workers.

Though the overall spirit of the Constitution of India guarantees social security measures to unorganised sector workers, it does make it mandatory for the state to provide it as a right. This arises from the strong distinction the Constitution makes between the enforceable civil and political rights and non-enforceable economic rights. For instance, the ‘right to work’, the ‘right to education’, the ‘right to public assistance’, the ‘right to just and humane conditions of work and maternity relief’, the ‘right to living wage’ are under Part IV of the Directive Principles of State Policy, the provisions of which ‘shall not be enforceable by any court’. Subsequently, the Constitution has been amended (86th amendment) to make education a fundamental right of every child between the ages of six and 14; and laws have been made with regard to the right to maternity relief and the right to work. However, many of these steps do not provide full measures of entitlements, for instance, the National Rural Employment Guarantee Act (NREGA) 2005 restricts the right of employment to 100 days, to rural workers and for unskilled work.

The Indian state has resisted, steadfastly and consistently, any temptation to make the right to social security a justiciable right. It is often argued that the Indian state does not have the capacity to provide social security to all its workers. This argument echoed the statements of political leaders before independence, which became part of the formulation of the subject in the Constitution and is reflected in the Planning process and in all governmental positions.

Pandit Jawaharlal Nehru observed in his famous speech in Lahore Session of the Indian National Congress (31 December 1929) that India cannot aspire to be a ‘welfare state’ because ‘there was no existing wealth to divide’. The same concern is reflected in Article 41 of the Indian Constitution on the rights to work and social security, “The State shall, within the limits of its economic capacity and development (emphasis added), make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want.” In 1955, during his prime ministerial tenure, Nehru reiterated a similar sentiment, “These goals can only be achieved by a considerable increase in national income and our economic policy must, therefore, aim at plenty and equitable distribution. We must produce wealth, and then divide it equitably. How can we have a welfare state without wealth?” (Quoted by P Chidambaram, Finance Minister, in his 2008 budget speech).

The Government of India, in its periodic report on the implementation of the ICESCR (2007) admits that a budget-funded social security system similar to that available in developed countries is not feasible for India at present (Implementation of the International Covenant on Economic, Social and Cultural Rights—Periodic Reports Submitted by State Parties under articles 16 and 17 of the Covenant, p. 57 para 178). It also admits that till the 9th Five Year Plan, the Plans made no mention of social security (paragraph 179). A study group on social security constituted by the government in 1958 (set up vide Order No. L and E-1(5)57, dated 3 August 1957) rejected the idea of comprehensive or integrated social security. In its report it said, “Under existing circumstances, any large extension of social security measures will not be possible either in terms of coverage or actual benefits. The aim should be to improve upon existing measures and to simplify administrative procedure, restricting additional financial levy for the time being, to what is required for this limited purpose.” Among the members of this committee were VKR Menon, Director, International Labour Office, Delhi; Col. VM Albuquerque, Director General, Employees State Insurance Corporation, and SN Mubayi, Central Provident Fund Commissioner.

Dual Social Security Systems of Exclusion from Protection

Such strong articulation of the non-viability of social security for all workers arose because the state looked at social security as an ‘economic, social and cultural (ESC)’ entitlement and because the state created a dual policy on social security. As has been observed earlier, ESC rights, contingent upon the economic growth of a nation, are seen more as aspirations rather than rights proper. The second proposition that the state created a dual policy on social security needs further elaboration.

National Planning and Dual Social Security Systems

When India became independent in 1947, political leaders, intellectuals, industrialists and trade unions entered into an unwritten contract based on a consensus that the immediate objective was nation-building and the creation of wealth. There were certain premises on which the social compact was made between the industry, state and the organised workers: (1) Wealth should be generated before we can think of distributive justice or ESC rights can only be achieved progressively when wealth is created; (2) India will eventually move into becoming a modern industrial state from a backward agrarian economy and the workers from a state of ‘un-freedom’ to free wage labourers. As such, the state accepted the rights of the industrial working class, including the rights at work (wages, working conditions, industrial relations, trade union rights etc.,) and social security [Central Government Employees Pension Scheme, State Government Employees Pension Scheme, schemes being run by the Employees Provident Fund Organisation (EPFO), Employees State Insurance Corporation (ESIC), etc.].

These measures reflected a pursuit of the constitutional objectives of equity and justice. They were, however, premised on the idea that all workers would eventually become industrial workers with defined employer-employee relationships. This was not to happen, as history shows, and these measures consequently created a dual labour market and a dual system of social security in India.

The periodic report of the Government of India to the UNESC accepts that social security measures can be grouped under two categories—the organised sector and the unorganised sector. Institutionalised social security cover for the organised sector is provided through the EPFO and ESIC schemes. The Employees State Insurance Act (ESI Act) 1949; the Employees Provident Fund and Miscellaneous Provisions Act (EPF & MP Act) 1952; the Workmen`s Compensation Act (WC Act)1923; the Maternity Benefits Act (MB Act) 1961, and the Payment of Gratuity Act (PG Act) 1972 are among the principal security laws enacted in India. Other Acts include Coal Miners Provident Fund, Coal Mines Labour Welfare Fund Act, Mica Mines Labour Welfare Fund Act and Assam Tea Plantation Provident Fund Act.

The nature of employment of unorganised workers, who are generally low paid, is casual, without an identifiable employer-employee relationship. In subsistence livelihood systems, unorganised workers do not enjoy any of the social security benefits such as health care, maternity benefits, old age pension, etc., which are available to the workers in the organised sector.

The periodic report of the Government of India to the UNESC informs us that the existing social security arrangements in the unorganised sector are in four groups, namely, (1) centrally funded, social assistance programmes; (2) social insurance schemes; (3) social assistance through welfare funds of central and state governments; and (4) public initiatives such as self-help groups by NGOs.

The centrally funded, social assisted programmes include schemes for both rural and urban areas under the National Social Assistance Programme (NSAP), which has three components, that is, National Old Age Pension Scheme (NOAPS), National Family Benefit Scheme (NFBS) and National Maternity Benefit Scheme (NMBS). The social insurance schemes available to the unorganised sector are operated through the LIC under a number of group insurance schemes, including Janashree Bima Yojana and Krishi Shramik Samajik Suraksha Yojana. Welfare funds operated by the central government through the Ministry of Labour include those for beedi workers, limestone and dolomite mine workers, iron ore, chrome ore and manganese ore mine workers, mica mine workers and cine workers.

Unlike for organised sector workers, the benefits available to unorganised workers are available through schemes only, and are not given to them as a matter of entitlement. The schemes are implemented by various departments and ministries and show little coherence or coordination. Moreover, the schemes are changed frequently, probably based on bureaucratic initiatives or political exigencies, leaving the beneficiaries confused. For instance, the centrally sponsored ‘National Scheme of Welfare of Fishermen’(NSWF) was launched in 1991-92 by amalgamating two earlier schemes—Janata Personal Accident Policy (started in 1982-83) and National Welfare Fund for Fishermen (started in 1986-87). These two schemes were made independent components of the NSWF and were renamed as ‘Group Accident Insurance for Active Fishers’ and Development of Model Fishermen Villages’, respectively. Simultaneously, a new programme called ‘Saving-cum-Relief’ was also added to the scheme as the third component in that year. The NSWF thus has three components and each component has a specific welfare objective in view.

Unorganised Workers in the Budget

Unorganised workers fall into myriad categories. Among them, though the list is not exhaustive, are small and marginal farmers, landless agricultural labourers, sharecroppers, fishers, forest workers, those engaged in animal husbandry, beedi workers, building and construction workers, toddy tappers, scavengers, loaders and unloaders, midwives, domestic workers, barbers, vegetable and fruit vendors, newspaper vendors, etc. Based on the nature of employment, unorganised workers may belong to contract and casual labourers, be self-employed, attached agricultural labourers, bonded labourers, migrant workers or unpaid family workers. Most unorganised workers are dalits, adivasis or women because of the historical social, economic and skill-based incapacities they have experienced.

Various official sources now give us the magnitude of the unorganised workforce. In the interest of brevity, let us quote from the report of the Standing Committee on Labour, which states, “The National Sample Survey Organisation (NSSO) carried out its 61st Round sample survey in 2004-05 and its results showed that out of total workforce of 457.5 million in the country, only 62.6 million workers are employed in the organised sector and remaining 394.9 million workers in the unorganised sector. However, of the total workers in the organised sector, 33.4 million workers had some kind of job and/or social security and, therefore, the remaining 29.2 million workers should be treated as unorganised (often called informal) workers in the organised sector. Further, only about 1.4 million workers in the unorganised sector had some kind of job and/or social security. This means that the unorganised workers in the Indian economy stood at 422.6 million (that is, 393.5 million in the unorganised sector and 29.2 million in the organised sector) as on 2004-05. These are the unprotected workers in the Indian economy.”

In his presentation of the Union Budget 2008 to Parliament on 29 February 2008, the finance minister, P Chidambaram, announced a number of schemes that figure in the Schedule of various versions of legislations on social security for unorganised workers: (1) the Aam Admi Bima Yojana, to provide insurance cover to poor households with an outlay of Rs 1500 crores; (2) the Rashtriya Swasthya Bima Yojana, implemented with effect from April 2008 and (3) the Indira Gandhi National Old Age Pension Scheme, expanded in November 2007 to include all persons over 65 years, falling under the BPL category with an outlay of Rs 3,443 crores. It further notes that the Rashtriya Swasthya Bima Yojana provides for a health insurance cover of Rs 30,000 for every BPL worker and his family, and will start accruing in phases to workers from 1 April 2008, that is, in 2008-09.

Despite this, no clear allocations are found against these schemes under the Ministry of Labour allocations. The non-plan expenditure component of the expenditure budget of the ministry shows a budgetary allocation of Rs 1464.24 crores in 2008-09 as against a revised budget of Rs 1468.22 crores in 2007-08; and under social security and welfare, Rs 695.38 crores in 2008-09 as against a revised budget of Rs 646.22 crores in 2007-08, showing no increase at all for non-plan expenditure under the heads of social security and labour welfare.

Similarly, the central Plan outlay for ‘Social Security for Labour’ does not show substantial increase. From Rs 519.52 crores in 2007-08, it has increased only to Rs 800 crores in 2008-09.

The Budget and the Public

Social Security is Public Provisioning

India is now the fourth largest economy in terms of purchasing power parity, and is projected, along with