Date:10/08/2004 URL: http://www.thehindubusinessline.com/2004/08/10/stories/2004081002930600.htm

Back Draft Bill on social security for unorganised sector soon

Pratim Ranjan Bose

Kolkata , Aug. 9

AS part of the common minimum programme, the Union Government is giving final touches to a draft umbrella legislation for increasing productivity in small and unorganised sector and providing social security to labourers in these sectors.

The law will include the agriculture sector as well. The draft bill may be placed before the Cabinet committee this year itself.

According to available estimates, the existing social security schemes including provident fund, ESI and others, provide coverage to only eight per cent of the entire labour force in the country.

Highly placed sources in Union Labour Ministry told Business Line that in its recommendation in June 2002, the Second National Labour Commission had pointed out that the small and unorganised sector was suffering from low productivity, low safety standards, low level of income and a near absence of social security schemes.

Following the recommendation, the Labour Ministry under the NDA Government had drafted a Bill for an "umbrella legislation" at the end of 2003. The Bill, however, failed to receive the Cabinet approval.

Stating that there were many differences of opinion among trade unions, entrepreneurs in small and cottage sectors, and the State Governments as regards the previously drafted bill, sources said that in its fresh attempt, the Ministry was trying to iron out the differences first.

"We have already started negotiating issues informally with all related parties to reach a better consensus. The issue will then be placed for discussion at the next meeting of the State Labour Ministers in Delhi to be followed up by formal approval of the State Governments and trade unions," the sources said.

"The entire process of consultation is progressing at a fast pace as we already have draft legislation in hand."

Hinting that the new legislation may require financial participation of both the Centre and the States, the sources said that effort were on to reach a consensus on financial issues. "We cannot leave every responsibility with the States."

Incidentally, promoters of the small and cottage sector industries raised strong objections to proposals for contribution towards any social security fund for employees.

"From the implementation point of view it would be unrealistic to expect social security cover comparable to those available with the organised sector. Inspiration can rather be drawn from the social security cover offered to the unorganised sector in West Bengal where both the State Government and the employee contribute Rs 20 each," they felt.