Labour groups demand special fund for informal sector in Budget'24
High anticipation surrounds the upcoming budget announcement, focusing on the establishment of the Social Security Fund
New Delhi: There is good news for workers in India’s unorganized sector. The upcoming Budget 2024 under the Modi 3.0 government holds many big promises. In this budget, Finance Minister Nirmala Sitharaman may make some major announcements for the social security of daily wage workers. With the creation of a dedicated social security fund emerging as a focal point of the budgetary agenda. This initiative is sure to extend crucial benefits such as provident funds, pensions for the elderly, and health and accident insurance to millions of migrant workers across the nation.
According to the Economic Survey of 2021-22, India’s unorganized sector employed approximately 44 crore workers during the fiscal year 2019-20. As of July 18, 2024, nearly 30 crore workers are part of the labor portal. Yet these temporary employees currently lack adequate social security coverage.
On the other hand, workers in the organized sector, benefit from institutions like the Employees’ Provident Fund Organization (EPFO) and the Employees’ State Insurance Corporation (ESIC). As they provide comprehensive insurance and pension benefits. In cases of workplace fatalities, these schemes offer substantial support to the families of the deceased.
Demand to create Social Security Fund
Labor organizations recently met with Finance Minister Nirmala Sitharaman. They urged to create a Social Security Fund in the upcoming budget. This fund aims to cover migrant workers, gig workers, and agricultural laborers, benefiting millions. According to the Social Security Act of 2020, employers and companies may be required to contribute up to two percent of their earnings to this fund. Although, construction companies may face levies for non-compliance, with penalties adding to the fund’s resources. Importantly, the intention of this strategic move is to alleviate potential financial burdens on the government.
The allocated funds from the Social Security Fund are earmarked for accident coverage, health insurance, and minimum pension guarantees, mirroring the benefits provided by established bodies like EPFO and ESIC. Furthermore, the government is contemplating the establishment of a National Social Security Board. This is to oversee the welfare of unorganized sector workers and all gig workers at a national level. It also promises hospital-based medical treatment facilities for temporary employees and their families.
The Social Security Act of 2020 also envisions such provisions. This includes the recent initiatives from the Karnataka government, that is, introducing a draft bill aimed at safeguarding the interests of gig workers with multiple protective measures.
In response to diverse sectoral demands, temporary workers that come under daily wage labor category are commonly known as gig workers. Including contract laborers, online platform workers, contract firm employees, and call center agents, all of whom operate on a temporary basis.
Anticipation is high for the forthcoming budget announcement, with widespread expectations centered around the formalization of the Social Security Fund. This pivotal government initiative is sure to positively impact millions of families across the country. It also ensures equitable access to essential social security benefits.