Fourth tweak in social security Bill likely to cover more workers

The government is devising a mechanism to ensure there is no additional burden on the wage bills of companies, whose finances have been severely impacted by the pandemic.
The migrant crisis which unfolded due to the national lockdown has sent the proposed social security law back to the drawing board.

A top government official said the labour and employment ministry would propose a tweak in the Code on Social Security, 2019, to ensure more unorganised sector workers get some form of social security cover through government funding — either under the Employees’ Provident Fund (EPF) or the Employees’ State Insurance (ESI) scheme. This will be the fourth time the National Democratic Alliance government will be redrafting the Bill.

The current social security laws in India exclude about 90 per cent of the workforce — mainly in the unorganised sector. This was one key reason why millions of workers in the unorganised sector decided to migrate back to their villages from cities when a lockdown was enforced on March 25 to curb the spread of coronavirus.

“In the context of the Covid-19 pandemic and based on suggestions from the Parliamentary Standing Committee, we are going to make changes to the labour codes so that they are more effective towards labour welfare. While making changes to our labour laws, our objective will be ensure better welfare for unorganised sector and migrant workers,” Union Labour and Employment Minister Santosh Gangwar had told Business Standard in an interview on Tuesday.

A labourer drinks water at a grain market on a hot summer day as temperature reached 48 degrees Celsius, in Bikaner
The government is devising a mechanism to ensure there is no additional burden on the wage bills of companies, whose finances have been severely impacted by the pandemic.

“The Bill has a provision for setting up funds for unorganised sector workers. We are working on modalities to ensure that there is no cost burden on private sector firms and we are able to mop up money from various sources for the proposed fund,” the official said.

In 2019, the government diluted its proposal to provide universal social security cover to all workers in the country, keeping in mind a slowing economic growth rate.

When the government had first proposed the Bill in April 2017, it had provisions for a universal social security cover to all workers — organised or unorganised, formal or informal, regular wage earner or self-employed — through self-contribution or a partial contribution, to be made by either employers or the government.

But after pressure from industries, especially micro, small and medium enterprises, the government dropped the plan. The Bill has been drafted three times in the past before it was introduced in the Lok Sabha in December 2019. It is pending approval of the Parliamentary Standing Committee on Labour.

After the panel gives its approval, the labour ministry will make changes and send the proposed Bill for the approval of the Union Cabinet, before re-introducing it in Parliament.

 


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