India’s current social security architecture is ill-suited to protect the vast informal and gig workforce. In this context, critically examine the need for a universal and inclusive social protection framework. (15M)

India is undergoing a gradual transformation in social protection with schemes like Ayushman Bharat, the eShram portal, and the proposed gig worker pension framework. However, with over 91% of the workforce in the informal sector (PLFS 2021–22) and 76% lacking any formal social security, the need for a universal and inclusive social protection framework is crucial to ensure comprehensive and equitable coverage.

Challenges in the Current System:

• Fragmented Architecture: Multiple schemes and welfare boards with overlapping mandates and underutilized funds. E.g., ₹70,744 crores in unspent construction cess (RTI).
• Limited Coverage: Only 12% of the workforce is covered by formal pension systems; informal schemes like Atal Pension Yojana (APY) reach just 5.3% of the population (FY24).
• Marginalization of Gig and Informal Workers: Gig workers (1.3% of labour force) remain excluded from most protections.
• Gender and Digital Divide: Only 44.3% of salaried women receive social benefits (PLFS 2021–22) whereas digital access remains limited to 50% of the population.

Government Measures:

• Ayushman Bharat – PM-JAY: ₹5 lakh health insurance for 50 crore citizens.
• eShram Portal: Centralized database for unorganised workers with over 29 crore registrations.
• PM-SYM & Atal Pension Yojana: Voluntary pension schemes for informal workers.
• Pradhan Mantri Jeevan Jyoti & Suraksha Bima Yojana (PMJJBY, PMSBY): Life and accident insurance for the unorganized sector.
• Social Security Code, 2020: Consolidates 9 laws to extend benefits to unorganised and gig workers.

Despite these efforts, access remains patchy, underfunded, and poorly implemented, necessitating systemic reform.

Reforms Required:

1. Institutional Integration:
   1. Merge fragmented pension schemes under a unified regulator.
   1. Strengthen the Social Security Code with clearer provisions and robust enforcement.
2. Tech-Driven Service Delivery:
   1. Expand Aadhaar-linked platforms like eShram for seamless registration, portability, and benefit tracking.
3. Financial Literacy and Outreach:
   1. Embed retirement education in school curricula.
   1. Use civil society (e.g., SEWA) for grassroots awareness.
4. Greater Fiscal Commitment:
   1. Raise social protection expenditure from 8.6% to match the global average of 13%.
   1. Subsidize contributions for low-income or vulnerable groups.
5. Universal, Tiered Pension Framework:
   1. Tier 1: Flat-rate basic pension.
   1. Tier 2: Auto-enrolled occupational schemes.
   1. Tier 3: Tax-incentivised private savings.

Conclusion:

India must transition from a piecemeal welfare approach to a unified, proactive social security system. Inclusive pensions, digital inclusion, and strong institutional mechanisms will be pivotal in ensuring dignity, resilience, and equity for India’s vast and evolving workforce.

‘+1’ Value Addition:

• 76% of population lacks social protection (ILO World Social Protection Report 2020–22).
• Only 1.9% of bottom 20% of income earners receive any social protection (World Bank).
• India’s social protection spending is 8.6% of GDP, below the global average of 13%.
• Chile: Auto-enrolment in occupational pensions with matching state contribution.
• Mercer CFA Pension Index (2024): India scored mere 44% in pension adequacy.
• Quote: “Social security is not a cost. It is an investment in human capital.” – International Labour Organization

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