Why India needs a new social protection deal

DailyO, June 02, 2020

By Himanshu Dube and Udai S Mehta

The scale of disruption in the Indian economy due to the current lockdown is massive. The Centre for Monitoring of Indian Economy (CMIE) estimated that India had a monthly unemployment rate of almost 25 per cent in April 2020, as against nine per cent in March. It also estimates urban unemployment to be slightly higher than the rural unemployment.

The experienced workers would be unavailable, as a significant proportion of the estimated 100 million migrant workers have joined the distressed Indian Lockdown Walkathon to their respective native places. These walks have been motivated by a variety of factors such as lack of savings, job losses, non-payment of dues by the employers, lack of access to food, or just the desire to face the pandemic with resources available at their native places.

This reverse migration has exposed the inefficacy of job infrastructure in catering to the employment demand of workers and the near absence of a social security net. Therefore, in order to address the job distress due to reverse migration and otherwise, the government has earmarked an additional Rs 40,000 crore under its Aatmanirbhar Bharat Abhiyan, for Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), adding to the earlier budget estimate of Rs 61,000 crore.

MGNREGS — the 15-year-old statutory scheme — has provided 2,854.66 crore person-days of work to 26.66 crore workers since its commencement, with a total investment of Rs 5,55,832.71 crore. And currently, MGNREGS possibly remains the only intermittent employment option for the rural poor at this time of distress.

Thus, with the current pandemic-led distress cutting across sectors, segments and habitations, India needs a new nationwide social protection programme to salve the widespread economic agony. India’s rapid economic recovery can be possible only if it gets to produce at its pre-Covid-19 capacity. The new social protection program can be driven by both the government and the private sector employers.

We propose this social protection program to have a limited tenure of two years initially, covering the current and the next financial year. The program, among other things, could include the following elements to begin with:

  1. Payment of 150 days of wages for all employees (unskilled, semi-skilled or skilled) registered under the Employees Provident Fund Organisation (EPFO). Even junior management personnel drawing salary equivalent to skilled worker wages could be under its ambit (since many exist under this category). Since the EPF is applicable only in organisations with more than 20 employees, employers with less than 20 employees also can access the above with a proviso that they register with EPFO within a period of three months. Gig economy platforms, which are aggregators, should especially be encouraged to register their worker-vendors with EPFO to ensure that they are socially protected. This may require changes in the mandate of EPFO which should be made at the earliest after discussion with the platforms.
  2. The government’s guidelines require industrial units to follow physical distancing. However, this will mean additional shifts and hence additional manpower. The new social protection scheme should provide minimum wages for up to 150 days to each additional worker that an industrial unit employs, to meet physical distancing norms. It should be coupled with a requirement that every such worker will be registered with EPFO and his/her employment should have exceeded 50 days in the first year.
  3. The widespread joblessness, in both rural and urban areas, will result in hunger and starvation. There is an urgent need to establish community kitchens in every village in the country and every half square kilometre of urban India. While many such kitchens are already functional and are being supported by philanthropic contributions from citizens, governments may do well to assign geographic areas to civil society organisations. The social protection scheme can support the wages of those employed by community kitchens.
  4. The pandemic has created an opportunity to augment and strengthen the healthcare systems in urban and rural areas. The “mohalla” clinic model of Delhi is now ripe for adoption across India, with some critical modifications like additional space for quarantine and assignment of trained-but-available-by-roster staff for nursing and contact tracing. In March, the government announced in the Rajya Sabha that the country currently has three million trained nurses. It is nearly half of the World Health Organization’s recommended norm of three nurses per 1,000 persons.

In pandemics like this, the requirement of the number of nurses is more to ensure shorter and well-spaced shifts. It is crucial to prevent infections among health workers. State governments, in a joint effort with local bodies, should assign maintenance of such facilities, training and roster management to civil society organisations. Like community kitchens, the social protection scheme should support the wages of those employed by these healthcare facilities.

Given the vast number and geographical spread of workers in different sectors, it is crucial to extend this proposed social security scheme across all industrial and service sectors. The registration criteria can be different for a diverse group of workers. For instance, street vendors can be registered through the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014.

Furthermore, those left out through such mechanisms can be included through the registration process under the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979. The subtle effort towards tackling this economic disruption requires a multi-pronged approach.

The efforts should be focused on facilitating the resumption of the industrial activity and simultaneously ensuring social protection to workers. Ensuring social protection to workers will instil trust in them, which will act as a catalyst to bring them back in the economic activity. It will also lead to enhanced demand, which will further contribute to addressing the economic disruption caused by Covid- 19. The social protection for workers now will potentially translate into the economic growth in future.

Himanshu Dube is the Director of Insight Development Consulting Group (IDCG) and Udai S Mehta is the Deputy Executive Director of CUTS International (Consumer Unity & Trust Society)

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