GLOBAL - In what could surely be the largest such scheme in the world, the pension scheme for unorganised workers in India is expected to cover 370m workers in a country of 1bn.
The scheme will cover 122 categories of employment for mainly the weaker sections of society – most of the country’s workforce.
Two months ago the Indian Cabinet turned down the idea proposed by the labour ministry, saying it was too ambitious. In a compromise it will be set up as a pilot scheme to provide social security for two years in capital cities, for 5m workers.
But it will later come into force for the entire working population in the informal sector, said government sources.
Parliamentary affairs minister Sushma Swaraj said: “We would definitely like to give a statutory shape, but before this we would like to experience how the pilot project functions.”
The 35m labour force in the organised sector already enjoys social security schemes implemented by the Employees Provident Fund Organization (EPFO).
The new pilot scheme will also be implemented by the EPFO. It provides a monthly pension of Rs500 (US$11) on retirement, or permanent and total disablement, or to the widow on the death of a worker.
It is financed by contributions from employees, employers and the government at the rates of Rs50, Rs100 and 1.16% of the national floor wage, presently Rs1800 per month per worker. It also provides for purchase of personal accident insurance and universal health insurance. Workers earning less than $144.40 per month are eligible to become members.
The labour ministry said: “The scheme is voluntary for workers where there is no identifiable employer and for the self-employed. However, it is mandatory in the case of registered and unregistered establishments where business and/or economic activity is carried out with the deployment of workers.”
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