Protecting The Vulnerable

Providing social welfare to informal sector

workers

A new integrated model to ensure holistic

development of the informal sector

TEAM CO-ORDINATOR : VRINDA KAPOOR

TEAM MEMBERS

GUNJAN SAINI

KSHITIJ KUTHIALA

SRISHTI SAHU

RACHIT AGARWAL

Contact : vrindakapoor28@gmail.com

The Current Scenario

A vast majority of Indians earn their living through working in

unorganized sector but the present status of social protection is

very poor.

Output & Employment :

Nearly 92% of India’s workforce falls in unorganized sector

Entire farm sector falls under informal sector

Only one-fifth of non-farm workers in organized segment

In the non-farm sectors, as income increases, share of

informal sector declines

Informal sector accounts for 40% of total industrial output

and 35% of total exports.

Hypothesis :

Compared to employment, the output contribution of

informal sector is low.

Suggests the sector is not efficient and must be finding

difficult to survive tough competition with organized sector

Social Protection :

The NSS data from 1999-00, 2004-05 & 2009-10

employment surveys show that

(a) Share of informal sector in non-farm sector has

increased

(b) Percentage of workers with access to social

security has declined

According to the NCEUS, only about 7% of the

total workforce in India has any form of social

security.Major areas of vulnerability are:

i) illness requiring hospitalization,

ii) untimely death of bread winner,

iii) unemployment

iv) maternity episodes,

v) Retirement from work.

Hypothesis : Present schemes lack in design and implementation

Reach needs to be increased

SNAPSHOT OF PROPOSED SOLUTION

PROTECTIVE MEASURES

HEALTH INSURANCE

ACCIDENT & LIFE INSURANCE

OLD AGE PENSIONS

The above solution can be summarised by

the following flowchart :

CENTRAL GOVT

STATE GOVT

INSURERS

IDENTIFY

PEOPLE IN

UNORGANISED

SECTOR AND

MAKE UID’S &

BANK

ACCOUNTS .A

CENTRAL

DATABASE IS

CREATED

FUNDS

ALLOCATED

PER PERSON

ENROLLED

HOSPITALS BANKS

UID

TR

EA

TM

EN

T

UID

FIN

AN

CE

OFFICER

CENTRAL

DATABASE

POOL OF

UNORGANISED

PEOPLE

PROMOTIVE MEASURES

CHILD CARE SCHEMES

SKILL TRAINING PROGRAMMES

ORGANISATION INTO ENTERPRISES

S. No. STAKEHOLDER INCENTIVE RECRUITMENT

1. CENTRAL GOVERNMENT The government is able to ensure access to

health care and insurance to workers in the

unorganised sector.

A core committee of

officers to look into the

efficient working of the

system.

2. STATE GOVERNMENT The state and local governments also get

funds from the central government per person

enrolled. So, they are also provided with a

strong incentive to enroll as many people as

possible.

Needs to set up a

committee of around 50

people to help insurers

identify workers in the

unorganised sector and

look after the day-to-day

functioning of the system.

3. INSURER Paid premium for each person enrolled.

Motivation to enroll as many households

from the unorganized sector as possible,

resulting in better coverage of beneficiaries.

Needs to recruit insurance

officers to identify and

enrol people.

4. HOSPITALS Paid per beneficiary treated. So, public and

private hospitals have incentive to treat

beneficiaries as the money from insurer

directly flows to them.

Can make do with the

staff already hired by

them.

5. GRADUATE STUDENTS Graduate students are easily tapped in the

training programme as they get an

opportunity to build their resume and gain

training skills.

Once the enrolment of all

workers are done, the

Govt. needs to hire

approx. 50,000 students to

train them.

6. RETIRED PROFESSIONALS Retired officials have a lot of spare time and

they want to use their spare time a productive

way.

The number will be lower

than the number of

graduate students but

should be around 20,000-

25,000.

FUNDING

2 crore INR

5 crore INR

2 crore INR

FEATURE IMPLICATION/ADVANTAGE

1. Incentive driven

scheme (incentives to all

stakeholders)

• The funds allocated to state govts. ensure political will to implement the scheme

wand enroll as many as possible.

• Incentives to various stakeholders decreases the possibility of corruption in the

model .

3. Use of UIDs(Paperless

and cashless scheme)

• Biometric cards ensure that only enrolled person can use it. So, the services cant

be misused by any other person.

• Portability: People can go to any impaneled hospital or bank all over India and get

the benefit just by the use of their UID. This helps the migrants as they are not

asked for fresh documents at different places.

• Paperless and cashless scheme implying illiterates will find no problems.

4. Use of advanced

technology and central

database

• Fights inconsistency problems : A single database for whole country. So, a person

enrolling in many districts can be identified by the database with the biometric

details fed into the central database.

• Ensures monitoring and effective performance

• Ensures convergence in various benefits : Various benefits provided using the

same scheme ensures convergence, not found in current social policy.

IMPACT AND REACH

2. Decentralized scheme • Ensures maximum enrollment of people

5. Child Care Schemes and

Skill Training

• Flexibility to women: can take up formal jobs

• Skill training can enhance employment opportunities and increase income

CHALLENGES AND MITIGATIONS

CHALLENGES MITIGATION

CORRUPTION : The insurer may try to enroll

illegitimate people in order to gain more funds .

1. Central Officer : An employee from the Central

Government can be posted in all districts and

verify the legitimacy of enrolled people.

2. RWA: RWAs can also be given the responsibility of

verifying the legitimacy.

TIMELY PAYMENTS : The Central government or

the insurer may get very late in making payments to

the hospitals/banks because of which hospitals/banks

can refuse the services to the targeted people..

1. A legal contract to be signed between all the

stakeholders where a time limit for payment is also

specified.

2. In case the payment is delayed, heavy penalty

imposed on the defaulter . The hurt stakeholder can also

take the defaulter to court .

3. Complaint boxes :If any person is denied any service

he/she is eligible for, he can register a complaint from

any nearby Help Center (via a toll free call)

LOW INTEREST BY TARGET GROUP : The

illiterate and unorganised people may not be able to

weigh the benefits and not show keen interest in the

scheme.

1. Awareness campaigns : By affiliated NGOs and

volunteers

2. A help desk by NGOs at the UID Center to help

people in all possible ways , including registering

complaints

LOW VOLUNTEER TURN-UP 1. Nominal payments based on contribution to the

scheme

2.Awareness campaigns in colleges & public places

REFERENCES

•Bhalla, S. (2003) : The Restructuring of the Unorganized Sector in India.

•Srivastava, R. (2012): Gender and Economic Policy Discussion Forum

‘Engendering Social protection for Informal sector workers’

•www.rsby.gov.in

•http://www.epw.in/review-labour/unorganised-sector-workforce-india.html