Labour pains

Photo: Sayantan Bera

TWO WEEKS ago, Suresh Kumar, 30, a highly skilled hosiery worker, was laid-off by Happy Textile in Ludhiana. When asked how often he changed jobs, he laughs. “I don’t think I can count anymore. Usually, I’m out of work every other month,” says Kumar.

Living on the brink of uncertainty, like Kumar, over 800 million people, 94 percent of Indian workers, comprise India’s unorganised sector labour force. On December 17, 2008, the Unorganised Sector’s Social Security Bill was passed in the Rajya Sabha laying absolute responsibility on the government to provide workers with life and disability cover, health and maternity benefits, old age protection, children’s education, skills upgradation and provident fund assistance.

The Bill defines the unorganised sector as “…An enterprise owned by individuals or self-employed workers and engaged in the production or sale of goods or providing service of any kind whatsoever, and where the enterprise employs workers, the number of such workers is less than ten.” This definition has been deliberately left as wide as possible to bring in every sort of enterprise which employs less than 10 workers of the following categories — Home-based workers (beedi makers); self-employed workers (hawkers) and wage workers (daily construction labourers).

The Highlights of the Bill
•The Central Government may formulate welfare schemes regarding life and disability cover, health and maternity benefits, old age protection and any other benefit decided by the government
•The state government may formulate welfare schemes related to the provident fund, employment, injury benefits, housing, educational schemes for children, skill upgradation of workers, funeral assistance, and old age homes
•The Bill establishes advisory boards at the Central and state levels to help in formulating, implementing and monitoring social welfare schemes for workers
•Every unorganised sector worker shall be registered by the district administration and issued a portable smartcard carrying a unique identification number

What Critics Say
After rejecting 11 amendments suggested by the Left, the Bill has faced criticism for being redundant and not being able to practically back its plans with on field implementation support. In a separate statement, seven central trade union organisations (CTUO) slammed the Cabinet decision as “arbitrary.” The CTUO urged the government not to introduce any scheme without statutory backing and guaranteed resource allocation. “The proposed legislation,” its statement read, “should include conditions of work, regulation of employment, guaranteed minimum wages, equal remuneration for women and social security, with effective implementation machinery in place.” It is also being criticised for being only “an expression of intent” with no assurance of any floor-level security such as health coverage or old-age pension. The Cabinet has evidently paid little heed to the National Commission for Enterprises in the Unorganised Sector (NCEUS) or the trade unions, who believe that the mere notification of welfare schemes without legislation guaranteeing livelihood protection and assuring a certain financial obligation on the employers and the government will be ineffective and very difficult to implement.

KP Kannan, member of the NCEUS, points out three basic flaws. “First, the Bill must be rights-based, which means social security should be enshrined in legislation as a right,” said Kannan. “Secondly, a social security fund should be set up to administer the funds permanently, instead of depending on state discretion. Finally, there should be an empowered body instead of an advisory board.”

Another issue that is kicking up a controversy is a plan to rope in private insurance companies to implement social security for the nation’s unorganised sector. According to Sudhakar Reddy, Member of Parliament in the Lok Sabha and Chairperson of the Standing Committee, “No organisation that wants profit out of the social security scheme can do justice to the workers.” While an average human life is calculated to be 75 years, insurance companies will only agree to cover a lifespan of 70 years. Reddy says, “ At an age when the workers are most vulnerable, they are not going to be covered in this scheme, because of the profit-making motive of private companies.”



1. It is a social welfare scheme for the above 14 in India’s 800 million unorganised labour sector

2. It provides disability and life cover, health and maternity benefits, and old age protection

3. All workers will be issued smart cards with its unique ID registered with the district administration


1. No floor level plan of uniting various unorganised labour under one umbrella

2. Bureaucratic advisory boards instead of empowered administrative bodies

3. Funding remains ambiguous as Centre promises no social security fund dedicated for Bill


How it will work
The workers will be segmented into casual labourers, contractual labourers and the self-employed, depending on which, there will be the following components, adding to the worker’s social security fund — The employer, the employee and the government. For example, for as little as Rs 2 a day, a selfemployed worker will keep contributing to his/her social security. The government will match the amount, making it a sum of Rs 4 a day, Rs 1,460 a year and Rs 43,800 over 30 years!

Whether every unorganised worker will be covered under this umbrella still remains a question. The Left is banking on trade unions for outreach. But what happens to the housemaid and the dhobi working at our homes? Or the odd gardener? Or the migrant labourer from Bihar, working in Punjab? How can these people be individually linked to trade unions? While these are questions calling for answers, one needs to look at the brighter side — after 62 years, it might be a reason enough to celebrate that the government is accepting the necessity for social security for unorganised labour in India.

The Remedies
According to Bhairav Acharya, a Delhi-based lawyer, the Bill either needs to be withdrawn or be massively overhauled. Acharya has a few immediate suggestions — To create legal entitlements and clear rights that workers can avail; provide means by which workers can enforce these rights; a variable sector specific scheme in addition to the ‘floor scheme’; a regime of penalties, which can be applied wherever there is misuse; and the use of central and state appointed bodies and labour courts instead of bureaucratic advisory boards to monitor its implementation. Kannan believes that what is required is a collective acknowledgement of the contribution of the unprotected workers to the national income (estimated at 60 percent) and its likely enhancement when their basic insecurities are addressed. He says, “We need to overcome our deep societal antipathy to the plight of the working poor. Inclusion should not be a mere rhetoric. A 10 percent shining India enveloped by an ‘area of darkness’ of 90 percent cannot coexist for too long.” 


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