Social Security Framework in India

Table of contents

India is witnessing a paradigm shift in social security with the proposed nationwide scheme for gig workers, integrating Ayushman Bharat, eShram registration, and a platform-funded pension system. With over 91% of the workforce in the informal sector (PLFS 2021–22), this marks a crucial move towards decoupling welfare from formal employment.
However, India must reform its fragmented and reactive social protection architecture into a universal and adaptive framework to ensure inclusivity and resilience.

Large Informal Workforce: About 91% (475 million) of India’s workforce is in the informal sector, with little to no access to social security. (PLFS 2021–22)
Low Enterprise and Worker Contribution: Only 1 million of 63 million enterprises and just 7.5% of the 550 million labour force contribute to monthly social security schemes.
Limited Coverage for Salaried Employees: Around 53% of salaried workers lack access to a provident fund, pension, health care, or disability insurance. (PLFS 2021–22)
Disparities in Social Security Access: Only 1.9% of the workforce’s bottom 20% income group can access any social protection benefits. (World Bank)
Gender Gap in Coverage: 47.8% of salaried men receive social security benefits, compared to just 44.3% of salaried women. (PLFS 2021–22)
Exclusion of Gig Workers: Gig workers, forming 1.3% of the active labour force, remain outside the traditional employer-employee framework and lack social security access. (PLFS 2021–22)

Code on Social Security, 2020: Consolidates 9 central labour laws to extend social security to unorganised, gig, and platform workers.
Gig Worker-Specific Developments: Recognises gig and platform workers as beneficiaries under social security schemes for the first time in Indian law.
eShram Portal: A national database for unorganised workers with over 29 crore registrations, enabling targeted welfare delivery.
Pension and Insurance Schemes: Programs such as PM-SYM, Atal Pension Yojana, PMJJBY, and PMSBY provide retirement and risk protection for the informal sector.
Ayushman Bharat – PM Jan Arogya Yojana (PM-JAY): The World’s largest health assurance scheme providing ₹5 lakh health cover per family/year to over 50 crore beneficiaries.
Welfare Boards: Sector-specific boards (like construction workers’ welfare board) provide workers social protection, education, and health support.

Limitations of Fragmented Approaches: Reliance on piecemeal schemes like welfare boards for specific groups leads to inconsistent and exclusionary coverage.
Arbitrary Worker Classifications: Creating separate categories for informal workers (E.g., gig vs. domestic) risks excluding many from vital protections.
Gig Work is Not a Silver Bullet: While gig work is expanding, it should not be seen as the sole path to formalising India’s vast informal workforce.
Need for a Holistic Framework: A comprehensive social protection model must blend universal coverage with targeted support for vulnerable groups.
Strengthen the Social Security Code: With the Code likely to remain, it should be treated as a baseline, not the end goal for future welfare policies.
Build Inclusive, Adaptive Systems: States must go beyond the Code to create robust, inclusive, and responsive welfare systems that evolve with changing work patterns.

Reactive and Outdated Policy Approach: India continues to react to emerging worker categories like gig workers rather than proactively reforming its social security architecture.
Lack of Global Alignment: Although India is a founding member of the International Labour Organization (ILO), it has not yet ratified the 1952 Social Security (Minimum Standards) Convention (No. 102).
Limitations of the Social Security Code: The Code, though intended as a universal framework, is hindered by vague definitions, diluted worker protections, and poor implementation.
Inefficiency of Welfare Boards: Welfare boards have underperformed, with ₹70,744 crore in unused cess funds, as revealed by RTI.
Need for Structural Reforms: Delayed payments and inactive welfare boards in progressive states like Kerala highlight the urgent need for transparency, accountability, and better governance.

Way Forward

Universal and Inclusive Coverage: Expand social security to cover all workers, especially those in informal and gig sectors, regardless of employment type or income level.
Strengthen Implementation Mechanisms: Ensure timely and transparent delivery of benefits by reforming welfare boards, enhancing digital infrastructure, and improving accountability.
Boost Awareness and Enrolment: Launch targeted awareness campaigns and simplify enrollment procedures to increase participation in schemes like PM-SYM, PMSBY, and eShram.
Promote Centre-State Coordination: Foster better collaboration between central and state governments to implement the Social Security Code uniformly and adapt it to local needs.
Leverage Technology and Data Integration: Integrate platforms like eShram with welfare schemes and use Aadhaar-linked databases to track beneficiaries, ensure portability, and plug leakages.

India’s social security must reflect constitutional ideals — not just as entitlements but as enablers of dignity. Welfare should be as universal as UPI, accessible as Jan Dhan, and resilient as Aadhaar. The goal must be to formalise dignity, not just employment.

Reference: The Hindu

PMF IAS Pathfinder for Mains – Question 151

Approach

Introduction: Briefly mention the current status of social security in India & the need for social protection.
Body: Discuss challenges in the current system & suggest measures to enhance accessibility and equity.
Conclusion: Write a futuristic conclusion mentioning the importance of universal and inclusive social security in India.