Eleventh Five Year Plan

Nutrition and Social Safety Net 151insurance, medical and sickness benefits are contributory(workers alone, or workers and employers, sometimessupported by the State), others like employmentinjury benefits, gratuity, maternity benefit are purelynon-contributory and are met by the employers alone.Most workers under the organized sector are coveredunder the Institutionalized social security providedthrough Employees Provident Fund Organization(EPFO), and the Employees State Insurance Corporation(ESIC).4.2.9 The EPFO is one of the largest provident fundinstitutions in the world in terms of members andvolume of financial transactions that it has been carryingon. The EPFO caters to: (i) every establishmentthat is engaged in any one or more of the industriesspecified in the Act or any activity notified by CentralGovernment, employing 20 or more persons, (ii) allcinema theatres employing five or more persons, otherthan those under the control of Central/State/localgovernment that provide equivalent/better benefits ofsocial security, and co-operative societies employingless than 50 persons and working without the aid ofpower, and (iii) any other establishment seeking coverageunder the scheme voluntarily. As on 31.03.2006,429.53 lakh persons were members of the Employees’Provident Fund, while 323.89 lakh persons were membersof the Pension Fund.4.2.10 The ESI Act was originally applicable to nonseasonalfactories using power and employing 20 ormore persons; but it is now applicable to non-seasonalpower using factories employing 10 or more personsand non-power using factories employing 20 or morepersons. The ESI Scheme has now been extended toshops, hotels, restaurants, cinemas including previewtheatre, road motor transport undertakings, and newspaperestablishments employing 20 or more persons.The existing wage limit for coverage is Rs 10000 permonth (with effect from 1.10.2006). The ESI Scheme isbeing implemented area-wise by stages and it nowcovers all the States except Nagaland, Manipur, Tripura,Sikkim, Arunachal Pradesh, and Mizoram; and in UnionTerritories of Delhi, Chandigarh, and Pondicherry.4.2.11 A scheme for providing employment to personswith disabilities in the organized sector hasbeen proposed to be launched. The main objective ofthe scheme is to provide incentives to the employersin the organized sector for promotion of regularemployment to persons with disabilities. Under thisscheme, the government would reimburse the employers’contribution of EPF and ESI for the first three years,aiming at creation of one lakh jobs for the physicallychallenged persons.WORKERS WITHOUT INSTITUTIONALIZEDSOCIAL SECURITY COVER4.2.12 Workers in the informal economy include:(i) the vast majority of the workers in the unorganized/informal as well as; (ii) the workers employed in aninformal capacity in the organized sector—the twotogether account for 93% of workforce. This categoryof the workforce is excluded from the institutionalizedsocial security cover referred to above.4.2.13 A number of schemes and systems are inoperation in the nature of social security to workersin the informal economy, following four differentmajor models. However, the major deficiency in thisapproach is the limited coverage (geographical areasand industrial activity). The benefits are confined toonly about 5–6% of the informal sector workers. TheNational Farming benefit scheme that provides anassistance of Rs 10000 in the event of death of familybreadwinner and the National Old Age Pension todestitutes above 65 years of age are other elements ofexisting social security structure.4.2.14 The Social Insurance Schemes available to theunorganized sector are operated through the LICsuch as Social Security Group Insurance Scheme. Allpersons in the age group of 18 to 60 years belongingto the 24 approved occupation groups, that is, beediworkers, brick-kiln workers, carpenters, cobblers, fishermen,hamals, handicraft artisans, handloom weavers,handloom and khadi weavers, lady tailors, leatherand tannery workers, papad workers attached toSelf-Employed Women’s Association (SEWA), physicallyhandicapped self-employed persons, primarymilk producers, rickshaw pullers/auto drivers, safaikarmcharies, salt growers, tendu leaf collectors,urban poor, forest workers, sericulture, toddy tappers,powerloom workers, women in remote rural hilly