People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 03

January 18, 2004

On Recent Announcement of Safety Net for Unorganised Workers


IN a statement issued from New Delhi on January 8, the secretariat of the Centre of Indian Trade Unions (CITU) said the NDA government is in a hurry “to make announcements on the so-called social security for the unorganised sector workers and on many other things before the election is announced.” According to the CITU, in its haste, while throwing before the press the so-called pilot scheme on pension for informal sector workers the NDA cabinet “did not bother to set out the minimum basic requirement on structuring the scheme to make it a credible one.”


The CITU pointed out that the NDA government’s communique issued to the press, outlining the said scheme, stipulated the coverage of “the entire working population in the informal economy,” which means 37 crore people. But the truth is that the pilot scheme is slated to cover only around 10 lakh workers in selected states. Moreover, as reported in the media, these states are yet to be identified.


The scheme has not included the workers within the 36-50 age group unless they make a contribution of Rs 200 per month to purchase their pension. One will note that the said age group accounts for an overwhelming majority of the unorganised sector workers. Moreover, the CITU recalled that by the government’s own admission, the national floor level minimum wage is only Rs 1800, adding that in reality what many workers are getting is below that level. Hence, the CITU statement asked, “is it at all practical to ask them to shed off Rs 200 every month for the future and still survive as human beings at present?”


The official communiqué stipulates that the “scheme will be a fully funded and actuarially valued scheme.” But the proposed scheme of generation of fund is based on contributions from workers, those from employers (who are not identifiable in most of the cases in unorganised sector) and only 1.16 per cent contribution on Rs1800 (national floor level minimum wage) by the government. This, the CITU pointed out, can in no way ensure even Rs 500 pension for any substantial section of the unorganised sector workers, where there is no fixed age of retirement, not to speak of covering the “entire working population” as being loudly claimed by the government. 


The government’s communique said the Employees Provident Fund Organisation would be administering the scheme. But, from its dismal tract record of handling the employees pension scheme since 1995, exposing its failure to deliver pensionary benefit to more than 80 per cent of retired employees in the organised sector, the fate of the proposed scheme for the unorganised sector can be anybody’s guess.


The CITU statement summed up by saying that the NDA government’s pilot scheme on the so-called social safety for the unorgnaised sector workers is meant more for public consumption during the run-up to the forthcoming election than for full-fledged implementation. “And that is why after making exercise for more than one and half year on the proposed unorganised sector workers bill, the NDA government has ended up in shelving the bill and floating the so-called ‘pilot scheme’ without proper financial back-up, the real future of which is still uncertain as per the statement of government spokesperson herself,” the CITU statement added.

The CITU said the scheme is thus more of an election stunt rather than a reflection of the real intention to provide meaningful social safety net to the unorganised sector workers. (INN)