The Union Ministry of Labour and Employment intends to bring a legislation in the current session of Parliament to provide a social security cover to all workers in the current session of Parliament.
The legislation is near completion but before being introduced, it needs the approval of the Group of Ministers (GoM) and the Union Cabinet.
The Ministry hopes to introduce the long-awaited legislation in the latter part of the session, which begins on Wednesday, Minister of State for Labour and Employment, Oscar Fernandes said on the sidelines of the 14th Regional Conference of International Social Security Association for Asia and Pacific Region on Tuesday.
Fernandes said that the Ministry’s focus is now on workers in the "informal sector". "For every 10 jobs, seven jobs are created in the informal sector," he said.
More than 93 per cent of workers in the country are in the unorganised sector, and when the legislation becomes law it would help improve their lives.
Work on the legislation is on for a few years now. A first draft was circulated by the Ministry among "social partners" (employee’s representatives, state governments and experts) in 2004 during the NDA regime.
The National Advisory Council compiled and submitted a separate draft the Ministry. The Arjun Sengupta Committee made a third draft.
The third draft predicted that to fund a social security cover for all workers in the unorganised sector, the Centre would need Rs 25,000 crores over a period a five years.
That is where the problem with the proposed legislation is – funding. "In the organised sector, there is a defined relation between the employer and the employee.
"The structure for social security therefore could be made contributory from both sides. But in the unorganised sector, there is no defined relationship,’’ a Ministry official said.
The Centre and State governments would have to bear the cost. "One suggestion is to levy a cess to raise funds. The Government would have to decide how to do that.
"Where the employer can be identified, it could be contributory. But where there is no defined relationship, the Centre and State governments would have to share the burden," the official said.