Opinion - Editorials

The search for a safety net

BY EXPLORING THE options for an insurance scheme for the country's unorganised sector, the Union Government has made a start, though belated, to put in place a much-required safety net for the sector. It is one of the cruel ironies of the planned economy that even five decades after Independence an overwhelming segment of the workforce is out of the radar screen of social protection. In a way it not only reflects the misplaced priorities of the past, but has also exposed the weakness of the earlier thinking that a vibrant public sector, with all its protective clauses for the workers, will ensure the creation of an equitable society. While there can be some justification for the slow mode in which labour reforms are proceeding, compared to the other components of India's economic restructuring, there can be no justification in delaying the early formulation of an acceptable safety net for the nation's workforce. In a way, the earlier such a mechanism is in place, the less difficult it will be for policy makers to move ahead with the more sensitive part of labour reforms.

It is against the backdrop of the larger changes the national economy is going through that the present efforts come as another attempt to provide answers to the unresolved issue of providing a form of security to the unorganised sector. While this effort, aimed at providing a pension scheme, is likely to fill a gap in the country's social security mechanism, it is still constrained by the thinking of the old mindset, which was tailored for the public sector. To meaningfully put in place a safety net for the unorganised sector an important prerequisite is the recognition of certain fundamentals. The first is the realisation that the unorganised sector contributes the bulk of the country's workforce, an overwhelming 92 per cent. Behind this piece of statistic are the 369 million workers in the unorganised sector, who have been largely out of the past scheme of thinking. The efforts, of late, at providing insurance cover for agricultural workers, the earlier attempts charted out for those in some sectors, beedi-manufacturing and construction, for instance, have had their own set of difficulties relating to procedures and implementation. What, hence, is required is a bold departure from the earlier solutions and to chart out a fresh, but simple form of social security system for the workers in the unorganised sector.

To start with, the mistakes of the past, especially those that have been a result of centralised decision-making, will have to be avoided. Temptations to adapt the system already in place for the organised sector to suit the needs of the unorganised should be avoided as the problems faced by the workers are different. Equally important is the recognition by the state that it will have to remain in the task and cannot resort to the option of handing over such issues to the private sector. One crucial corrective that is required is to increase the public expenditure on the social sector, which is at present low. The observation, some months ago, by the Second National Commission on Labour that close to Rs. 18,000 crores will be the additional annual requirement reflects the enormity of the task. With labour-related issues falling under the Concurrent List, the onus on the States is equally important, and no longer can their responsibility be restricted to repeating Central schemes. Challenging times are also those that provide the scope for innovations. As attempts are on to redesign the social security schemes for the organised workers, there is a need to expand the concept to bring in protective measures for those without regular employment or income. Winning the confidence of the workforce is important to ensure the acceptance of the economic reforms. Any delay in bringing in an appropriate safety net will only imperil the reforms process.

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