Union Budget 2024: Empowering unorganised workers
This article is authored by Pooja Gupta and Eshita Trivedi, Policy and Development Advisory Group.
The Economic Survey of 2021–2022 estimates that 43.99 crore people worked in various forms of informal employment in India during the 2019–20 fiscal year, making up a significant proportion of the country's unorganised workforce. Domestic workers stand out within this large group as a pertinent but frequently disregarded chunk of the population that diligently supports households all around the country.
The government may address the long-standing injustices faced by these individuals through the Interim Budget 2024, laying the groundwork for extensive social security reforms, as India is moving towards for its general elections in April. Shedding light on the provisions in the 2020 Social Security Code, we explore the possible challenges in the implementation of the social security funds intended for unorganised sector workers. Examining these obstacles, we make recommendations, especially with regard to the e-shram portal, to ensure that any new provisions effectively benefit individuals at the grassroots level.
India plans to establish a sizable social security fund for workers in the gig economy and unorganised sector. This fund was envisioned in the 2020 Social Security Code and marks a critical step towards achieving universal social security coverage.
India's labour reform initiatives, which aim to promote ethical labour practices and safeguard the rights of businesses and workers, include the Social Security Code of 2020. Out of the four codes, Social Security Code 2020 is essential for providing social security benefits to workers, including those in the gig economy and unorganised sector. It seeks to strike a balance between company and workers welfare by combining 29 labour statutes. The code is also anticipated to help India facilitate ease of doing business.
The Social Security Code of 2020 represents a substantial increase in coverage, especially for workers who were previously not covered by the laws in place, such as gig workers and platform workers in the rapidly growing e-commerce industry. The Code provides essential benefits like life and disability coverage, maternity benefits, and pensions to gig workers. It also includes the unorganised sector, temporary workers, and migrant workers who work beyond state lines, broadening the purview of social security programmes. Notably, another previous coverage gap has been filled as fixed-term contracts are now eligible for coverage. The objective of the Code is to guarantee complete social security coverage for a diverse workforce by streamlining compliance and using a consultative approach through inspector-cum-facilitators and uniform definitions.
The overarching goal is to bring together all current social security programmes—which address health, housing, education, old age, pensions, provident funds, and health—under a single, all-inclusive Social Security Fund. This consolidation aims to streamline administration, enhance accessibility, and ensure comprehensive coverage for all segments of the workforce. Through these concerted efforts, the government aims to create a more efficient and equitable social security system that effectively addresses the diverse needs of the workforce. In pursuit of this objective, the government launched e-shram portal, to get the number of unorganised workers in the country.
In 2021, the ministry of labour and employment established the e-shram portal to facilitate the registration of unorganised workers and building a comprehensive national database. It enables an unorganised worker to self-declare and register under 400 occupations across 30 major occupational areas on the platform.
The e-shram platform was launched in August 2021 and has since gathered data on over 293.3 million unorganised workers. By leveraging the data collected through the e-shram platform, and now encompassing information on unorganised workers, the government is in an adequate position to provide benefits to these workers. However, there remains the question of the reliability of this data and its accuracy in representing the diverse and dynamic nature of the unorganised labour sector.
According to the most recent data from the Telecom Regulatory Authority of India, India suffers from a significant digital divide. The country's total teledensity was 88.07%, while in rural areas it was just 60.10%. Based on a 2017–18 National Statistical Office (NSO) poll, only 18.4% of people aged 15+ were skilled in computer operation, while 22.9% were proficient in internet usage.
In the context of the online registration process for the Social Security Code, this digital gap comes across as a serious challenge, particularly for India's 93% unorganised labour force, which frequently works in poor circumstances for little pay. It's probable that people without cell phones don't have the digital literacy, which is needed to use the portal efficiently. To make things more difficult, employees who constantly alter their contact information may not be able to register because the process requires an active phone number connected to Aadhaar. Given the technological shortcomings related to Aadhaar authentication, requiring Aadhaar for social security benefits raises difficulties. Aadhaar linkage to benefits financed by the Consolidated Fund of India is restricted as a result of the Supreme Court's ruling in the Puttaswamy case, as government bodies and the Parliamentary Standing Committee on Labour have noted.
Moreover, the scheme only applies to individual workers who register; it does not allow for the inclusion of information on the workers' families or dependents. Workers who are 60 years of age or older are being excluded. The Shram Suvidha Kendra is the only organisation that authenticates workers for registration, which may result in exclusion while managing the database that contains information on over 43 crore people.
In order to ensure that all workers benefit from the planned provisions in Budget 2024, it is essential that these challenges be addressed. It is imperative that the digital divide in India be addressed. The Aadhaar requirements and low digital literacy provide challenges for the unorganised labour population. Furthermore, data inclusion and accuracy are also impacted. To improve accessibility and inclusion, a number of measures need to be taken. Some of these can include the following:
· Alternative government-issued ID cards should be recognised as a valid form of identity verification for workers.
· Flexibility and user-friendliness would be improved by enabling employees to register using any desired number and to change it as needed.
· Workers who encounter digital difficulties should be accommodated by enabling offline registration through registration camps and common service centers.
· Door-to-door campaigns, local events, and a dedicated helpline for portal-related concerns would all contribute to the simplification of the registration process and increasing awareness.
As next steps, the government can enhance its efforts to address the challenges outlined above and ensure a more accessible and inclusive social security system for all Indian workers. Through the implementation of these measures, the government may efficiently close gaps and establish a strong social security system that meets the varied requirements of the labour force.
This article is authored by Pooja Gupta, senior consultant and lead, Strategic Communications and Eshita Trivedi, communications assistant, Policy and Development Advisory Group.