India needs a universal social security system
Replicate MGNREGS in urban areas, enhance skill development at work, and invest in public health systems
The lockdown necessitated by the Covid-19 pandemic has caused misery to all those workers whose daily incomes disappeared. This was revealed in the painful images of families of migrant labourers struggling to get back to their villages.
This tragedy has driven home the imperative of providing universal social security. The founders of the Republic wanted this. The Directive Principles of State Policy in Article 41 of the Constitution says that within the limits of its economic capacity, the State would provide “public assistance in cases of unemployment, old age, sickness, disablement, and in other cases of undeserved want”. The time has now come to make this a reality.
About 10% of workers are in the organised sector. They have the protection of social security under the labour laws. These laws are based on similar legislation in industrialised nations. Contributions from both the employers and the employees fund the social security provided to workers. This principle of joint contribution evolved in the early part of the last century as industrialisation and workers’ movements gained momentum. The organised sector workers, who constitute less than 10% of all workers in India, have far greater job security than the remaining 90%, who work as casual labour in large, medium, small, and micro enterprises in cities, at construction sites, in transport, in agriculture and non-farm work. Or, they are self-employed as street vendors or in job work. This 90% is the most vulnerable.
The intention to cover all workers is also indicated in the draft legislation on the Social Security Code that has been introduced in Parliament. The challenge for the State is how to provide social security to all with its limited financial and administrative capacities. A universal social security system will have to be built progressively.
The most pressing need of the most vulnerable citizens is income, preferably through work for pay. In fact, it is the lack of employment, or fragility of their employment and incomes, that made so many so vulnerable when the pandemic struck. The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), which assures 100 days of employment to the poor in rural areas, was a landmark development. In its design, it has the advantage of providing selfselection. Only those who are willing to do manual work can seek employment. Useful assets are created in villages through the programme. In the present crisis, the government has relied on this system to give relief to migrant workers.
The time has come to extend this programme to urban areas with municipal bodies being given the responsibility for providing 100 days work to all those seeking it.
Self-selection would work equally well in urban areas. Municipal bodies have a range of work to get done, such as improving sanitation, minor repairs, in which they could productively use labour. This should be financed by the Centre in the same way that MGNREGS is.
The principle of “learning while earning” should be more vigorously applied to improve India’s skill development systems. These have not delivered enough, in spite of great attention given to skills development in the last 15 years by the United Progressive Alliance and the National Democratic Alliance governments. In a dynamic marketeconomy, workers will lose jobs and this will happen at a faster pace with technological changes. Workers will have to keep learning to stay productively employed. The best way to learn useful skills is on the job, supplemented with off-line modules, which has been the successful approach of governments and employers in Germany and Japan.
An improvement that should be made in the design of MGNREGS-like schemes is to attach on-the-job skill development with the schemes. That way, not only can physical infrastructure be improved in rural and urban areas along with wage payments, but human capabilities will also be simultaneously developed. The principle of on-the-job learning supplemented with governmentsupported training can be applied in clusters of small and medium enterprises as well.
Covid-19 has highlighted the urgency for providing universal free health care. It has demonstrated that for-profit private health care is only for the wealthy. The poor need to be provided with good health care too. Raising the share of expenditure on health care to 2.5% of the Gross Domestic Product in the next two years would be a good beginning. Universal insurance coverage will not be enough.
The State must also provide the infrastructure and make doctors and facilities accessible. Digital technologies, telemedicine, pharmacy chains of generic drugs, promotion of healthier lifestyles, and greater use of trained nurses and paramedics can improve health care and lower costs dramatically.
Income support with skill improvement and good health care for all who need it, are essential for a universal social security system in India. The State must round these off with improvements to schemes for those who, due to life circumstances, cannot work, such as the disabled, the elderly, and expectant mothers.