30 Aug 2022 Social Security/ Universal Basic Insurance(UBI)
GS Paper 3: Inclusive Growth and issues arising from it.
What is social security?
- Social security is the protection that a society provides to individuals and households to ensure access to health care and to guarantee income security, particularly in cases of old age, unemployment, sickness, invalidity, work injury, maternity or loss of a breadwinner.
- Social security mainly encompasses food security, health security and income security.
- Social security systems are like a safety net placed at a critical survival line.
- India operates the widest spectrum of social security schemes which cater to the largest number of people than any other country.
What are the types of social security nets?
- Passive safety net which catches those falling from line of basic living wages and prevents a fall below critical survival line. This is basically a social assistance programme meant for the most income-deprived sections of society.
- Active safety net which works like a trampoline so that those who fall on it are able to bounce back to the line of basic living wages. This safety net is a scheme with a higher outlay.
- Proactive safety net which acts like a launchpad so that those who fall on it will not only bounce back but will also move up beyond the line of basic living wages. This social security net is the most desirable option but requires immense resources and institutional capacity.
What are the various spectrum of Indian social security programmes ?
- For food security: India provided heavily subsidized food grain under the National Food Security Act (NFSA) to over 800 million beneficiaries. Under NFSA, about 120 million children are provided free lunch under the Mid-Day Meal Scheme. In addition, some 50 million people benefit from the free meals programme run by a few State governments.
- On the health security front, for the unorganized sector, there is the Ayushman Bharat Scheme of the central government with over 490 million beneficiaries. In the organized sector, the Central government runs the Employees State Insurance Corporation (ESIC) and Central Government Health Scheme (CGHS) catering to 130 million and four million beneficiaries, respectively. Health insurance schemes run by various State governments cover about 200 million people.
- Schemes to ensure Income security in the organized sector: there are three types of provident fund schemes: General Provident Fund (GPF) which is availed by about 20 million Central and State government employees in the country. The second is the Employees’ Provident Fund (EPF) which is available to about 65 million workers in the other organized sector. The third is Public Provident Fund (PPF) that can be availed by any Indian citizen but has contributions from the organized sector mostly. There are about 53 million New Pension Scheme subscribers in the country .
- Schemes to ensure income security in the unorganized sector: Pradhan Mantri Kisan Maan-Dhan Yojana (PM-KMY) and the PM-KISAN scheme is available to about 120 million farmers. Atal Pension Yojana (APY) benefits 40 million people. The Pradhan Mantri Shram Yogi Maandhan Yojana has about five million beneficiaries while there are about 50,000 beneficiaries under the National Pension Scheme for Traders and Self-Employed Persons (NPS-Traders) scheme. The largest unorganised sector income security programme is the scheme under the Mahatma Gandhi National Rural Employment Guarantee Act, which has about 60 million beneficiaries.
What are the issues faced by India in ensuring social security?
- Issues of financial sustainability and leakages in the food security programme.
- Despite these large-scale provisions, about 400 million Indians are not covered under any kind of health insurance. Only about 110 million people in India have private health insurance.
- Informality of the Indian economy as the hurdle in rolling out schemes such as unemployment insurance in the country.
- Implementation of social security schemes such as universal basic income has huge fiscal implications (around 4.5% of GDP), as well as runs the risk of implementation failure due to large-scale beneficiary identification requirements.
Way forward: Case for introduction of Universal Basic Income(UBI).
- Insurance penetration (premium as a percentage of GDP) in India has been hovering around 4% for many years compared to 17%, 9% and 6% in Taiwan, Japan and China, respectively. Universal basic insurance will help in insurance penetration.
- Development of social security portal like ‘Kutumba’, of Karnataka through the scheme of universal basic insurance as data of that informal sector are now available both for businesses (through GSTIN, or Goods and Services Tax Identification Number) and for unorganized workers (through e-Shram, which is the centralized database of all unorganized workers).
Sources: ILO Website; The Hindu
1.The Hindu: https://bit.ly/3xb8N8M ; Author Name: Rajesh Gupta
2. ILO: https://bit.ly/2JyFULp