Social Security Code 2020 : Analysis – UPSC GS2

  • Informal workers constitute 91% of the workforce.
What are the Issues in Social security code 2020?
  • Only Merger of older provisions:
    • It is just a merger of existing social security laws.
    • The SS Code 2020 amalgamates and rationalizes the provisions of eight existing central labour laws.
    • Even in the new scheme the employee’s provident fund, employees state insurance (ESI), maternity benefit, gratuity still remain only for organised sector workers.
    • Only a subtle change done like:
      • In employees’ state insurance, the existing employee threshold has been withdrawn. Now the central government can extend ESI benefits to any organisation irrespective of the number of workers employed.
  • No regard for challenges of informal workforce:
    • SS 2020 scheme takes little consideration to solve the existing hurdles for informal workers in accessing Social security schemes. 
    •  It makes registration a prerequisite for universal coverage to avail social security.
    • However, it has failed to understand the underlying problem faced by the informal workers while making registration.
      • Most informal workers lack digital literacy and connectivity. Hence, providing them the option for Online registration will make the Social security scheme a failure.
      • Most informal workers are footloose casual workers (26% of all workers) and self-employed (46% of all). This makes it difficult for them to furnish all documentary papers required as part of the registration process.
      • Furnishing proof of livelihood and income details in the absence of tangible employer-employee relations is also very difficult.
  • Similar State Rules failed earlier:
    • Similar provisions are already there in existing social security schemes run by State governments under the Unorganized Workers’ Social Security Act, 2008.
    • Yet, many informal workers are outside the ambit of any social security because of the failure to address their concerns.
  • Need for inter-state workers not addressed:
    • Unorganised workers are spread across the length and breadth of India. However, the code does not address the need for inter-State arrangements and cooperation for providing social security net.
  • No Maternity benefit to unorganised women:
    • Under the SS Code, the provision of maternity benefits has not been made universal. Maternity benefit is presently applicable for establishments employing 10 workers or more. The definition of ‘Establishment’ in the proposed code did not include the unorganised sector. Hence, women engaged in the unorganised sector would remain outside the purview of maternity benefit.
  • No access to EPF to unorganised workers:
    • The SS Code maintains that the Employees’ Provident Fund Scheme will remain applicable, as before, to every establishment in which 20 or more employees are employed.
    • Thus, for informal sector workers, access to employees’ provident fund remains unfulfilled in the new code.

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