Table of Contents
1. Social security for the informal sector: Designing pilot projects; Wouter van Ginneken
The context and aims of pilot activities
Intended beneficiaries and their social security needs
Project areas in Gujarat and Andhra Pradesh
Descripción y análisis de las localidades seleccionadas
Descripción y análisis de las instituciones
Viabilidad del proyecto por componente
Conclusiones:
Perspectiva de replicabilidad a nivel nacional
Investigating conditions in Arusha and Mbeya
Assessing the feasibility of the pilot projects
Remark: Not all the tables referred to in the text have been included
in this Web document. In order to obtain a copy of the complete document,
kindly contact the Social Security
Department.
Shashi Jain, Consultant, New Delhi
Security and support are required by all persons in
order to face difficulties and to mitigate hardships when struck by losses
involving health, income and inability to work and life itself. It is
only a planned and comprehensive social security system that can ensure
protection to all members of the society. Although the need is universal,
its availability is very much limited, especially in the economically
less developed countries like India. The extension of social security
in India is mainly through the mechanisms of statutory entitlements; through
the universally available services such as health and public distribution
of essential commodities; by means of targeted social assistance programmes;
and, through social insurance schemes.
1.1 Coverage by statutory schemes
There exists extensive legislation which provides
for mandatory social security benefits either solely at the cost of employer
or on the basis of joint contribution of the employers and the employee.
While protective entitlements accrue to the employees, the responsibility
for compliance largely rests with the employers. The major enactments
are:
-
* The Workmen's Compensation Act, 1923, requiring payment of compensation
to the workman or his family in cases of employment related injuries
resulting in death or disability;
* The Employees' State Insurance Act, 1948, covering factories and establishments with ten or more employees provides for comprehensive medical care to the employees and their families as also cash benefits during sickness and maternity, and monthly payments in the events of death and disablement;
* The Employees Provident Fund (&MP) Act, 1952, being applicable to all scheduled factories and establishments employing 20 or more employees, ensures terminal benefits of PF, superannuation pension, and family pension in case of death during service. Separate laws exist for similar benefits for the workers in the coal mines and tea plantations;
* The Maternity Benefit Act, 1961, providing for 12 weeks wages during maternity as also paid leave in certain other related contingencies;
* The Payment of Gratuity Act, 1972, providing 15 days wages for each year of service to employees who have worked for five years or more in establishments having a minimum of 10 workers.
In order to understand the availability of statutory
entitlements to the Indian people, the extent of coverage, vis-a-vis the
workforce needs to be seen. Of the total 315 million workers, the EPF(&MP)
Act, the law with the widest coverage, reaches around 18 million subscribers
- which, together with other PFs for coal mine and tea plantation workers
comes to about 7% of the workforce. To this if we add another 3% or so
employees of the Central and State Governments, it is clear that the above-mentioned
statutory protections are largely confined to 10% of the working population.
These mainly belong to the organised sector even though the laws do not
themselves have any restrictive classification or conditions in respect
of the unorganised or informal sectors. In fact, in case they were to
be enforced more strictly, a large number of workers in the latter category
would be covered, since the laws recognise fundamentally the responsibility
of the principal employers for casual and contract workers including those
working in their homes. Judicial pronouncements have upheld the applicability
of the EPF and the ESI Acts to the home-based workers involved in beedi
rolling, carpet manufacturing and in various cottage industries. And yet,
these workers are not able to access the benefits because of difficulties
in establishing the indirect or tenuous employer-employee linkages coupled
with the employers' predilections for evasion. As such, the coverage of
unorganised workers is merely 2 million, constituting less than 10% of
the EPF and ESI subscribers and only 1% of the workers in this sector.
Apart from the numerous informal sector workers, the
statutes leave out groups of employees such as:
-
- those working outside the scheduled industries and establishments;
- the ones in smaller enterprises;
- those drawing salaries beyond the wage ceilings; and,
- the very substantial category of the self-employed (comprising 54% of the workforce) who are not even targeted for being brought within their protective ambit.
It is indeed possible to extend coverage through filling
up of the gaps in the legislative provisions as also by setting up and
developing appropriate implementation instruments.
A few of the uncovered or excluded categories are
sought to be given some protection through the mechanism of welfare funds
targeting specific employment areas. At the Central level, there are five
such Funds established out of the cess monies levied on the employers
and cover beedi rollers besides cine workers and those working in certain
mines. In all, they cover around 4.5 million workers. Through another
recent central law, the State Governments are expected to set up welfare
funds for workers in the building and construction industry. However,
in view of the welfare orientation and the non-contributory nature of
these Funds, the level of benefits is rather low. Besides, although statutory,
the legal entitlement base for social protection rights for the individual
workers is extremely weak. Some of the States have also set up welfare
funds for the agriculturists (who constitute 65% of the workforce on an
all-India basis), artisans, construction workers, etc. The most notable
of these efforts have been made by the State of Kerala which has set up
over 30 such separate funds on a contributory basis. The multiplicity
of funds has led to high administrative costs and the State Government
is considering their integration which is a difficult and complex venture.
This points to the need and the possibility of a higher level of benefits
being made available through a single contributory scheme organised for
a defined area.
Certain essential aspects of social security, notably
health care including maternity benefit, have been sought to be universally
provided through a public service network meant to be largely free of
cost. The overall health status of the people of India in terms of the
basic health indices is rather poor - the life expectancy being around
60 years and the birth, death and infant mortality rates are high. As
such, the achievement of the goals set under Health for All by 2001 is
a veritable challenge. The public and even the private health infrastructures
are themselves very much inadequate and are also not universally accessible
for ensuring a fair level of medical care. Nor are the health services
free of cost. Indeed, of the Rs.320 per capita health expenditure per
year, the largest share (75%) comes from the out-of-pocket expenses incurred
by households (World Bank 1995). The cost and burden of treatment for
hospitalisation is very high especially for poor families in whose case
a single episode may be the equivalent of an entire month's consumption
expenditure. Although there are wide variations between the costs in different
States, generally the treatments are costlier in rural areas and when
offered by the private providers (Krishnan 1994). Group health insurance
could play a vital role as envisaged in the National Health Policy formulated
by the Government of India in 1983. Para 16 of the Policy states "Besides
mobilising the community resources, through its active participation in
the implementation and management of national health and related programmes,
it would be necessary to devise well considered health insurance schemes,
on a State-wise basis, for mobilising additional resources for health
promotion and ensuring that the community shares the cost of the services,
in keeping with its paying capacity." This resource is yet to be tapped
on an extensive scale since besides the Government sector significant
health insurance exists only under the ESI Scheme. However, the few initiatives
taken are a pointer to its possible use for the unorganised workers. Better
benefits could thus be extended through a properly designed health insurance
scheme for a lower premium than the level of expenditure which such households
are required to make in any case at present.
With unemployment at over 23 million and a sizeable
population (almost 30%) having incomes below the poverty line, the need
for support programmes to carry people through spells of unemployment,
disability and deprivation, of old age and destitution becomes necessary.
Although the impact of overall economic growth on poverty reduction is
well established, the trickle down effect' is not felt by many population
groups and regions who are in a way by-passed by the developmental process.
To correct the imbalances, a number of promotional and protective measures
for disadvantaged groups have been undertaken in India as part of an anti-poverty
policy. These have focussed mainly on the areas of employment, food subsidies
and old age pensions. A large number of programmes have been taken up
under the two clearly identifiable streams - the self-employment and income
generation stream, and, secondly, the wage employment and infrastructure
development stream. These include credit linked self-employment schemes
for individuals and groups (Integrated Rural Development Programme, Development
of Women and Children in Rural Areas); training for skill upgrading (Training
Rural Youth for Self-Employment, Self-Employment Programme for Urban Poor,
Support to Training and Employment Programme for Women), programmes of
wage employment (Jawahar Rojgar Yojna, Prime Minister's Rojgar Yojna and
Employment Assurance Scheme); and housing (Indira Awas Yojna).
Apart from the above, a degree of security for the
contingencies of death, disability and loss of economic assets procured
against credit has been extended through the Group Insurance Schemes,
the premia for which are mainly subsidised from the Social Security Fund
with the Life Insurance Corporation. The balance of premium being paid
by the Government and in some cases shared by the beneficiaries.
Although evaluation of the individual programmes have
identified several strengths and weaknesses, it has been generally observed
that a more committed local Government, vigilant local groups and non-governmental
organisations have had a crucial role in ensuring a more effective reach.
There clearly exists a possibility for enhancing the utility of such programmes
through better organisation and initiative.
1.2 Extending social security protection
With a view to universalise the access to social protection,
it is evident from the foregoing that there exists a need and a possibility
for extension of a reasonable level of social security to a large number
of workers in the self-employed and in the unorganised and informal sectors
through an appropriately designed scheme, the modalities of which could
be tried out especially through the medium of a pilot project. It would
be necessary for such a scheme to take into account the inherent characteristics
of the unorganised labour force which have been clearly identified. Besides
the absence of a clear and continuing employer-employee relationship,
they include seasonal work and under-employment, marginal and peripheral
jobs at times involving migration, dispersed workplaces which are mostly
home-based, low levels of earnings and hardly any unionisation. It is
also evident that any meaningful system must have the secure foundation
of a contributory base to be financially viable. Since the facility of
collection of contributions through the deduction from wage payments made
by the employers is either not available (as in the case of self-employment),
or not easy (as in the indirect and informal employments), a pragmatic
and workable arrangement has necessarily to be found and set up. A similar
arrangement would be essential for organising a worthwhile delivery of
benefits. It is clear that the informal sector schemes built around the
individual employment areas and being rooted in the employer-employee
relationship are not suitable. Even when admitted through sectoral welfare
funds, besides leaving out many undefined informal sector jobs, their
multiplicity induces compromise on cost effectiveness. A reasonable alternative
thus seems to be to work out schemes on an area basis. Moving away from
the vertically organised employment spheres to a person- centred approach,
the aim would be to cover all workers in a compact geographical area.
Some of the normative requirements that an area based security scheme
for the unorganised should be expected to fulfill may be mentioned as
follows:
-
- its scope and applicability must extend to all categories of workers
including the home-based, the self-employed and women workers, irrespective
of the duration of any specific work;
- the scheme must be economically viable and self
financing, being worked out on the basis of adequate identified sources
of funds, including compulsory contributions from the workers and agencies
carrying on economic activities
- the benefits of insurance and security cover that
are extended should be self-evident, and be seen to be advantageous
by the persons for whom they are meant
- an extent of flexibility must be built-in, beyond
prescribed minimum levels, in order to cater to the local needs and
priorities;
- its basic features should be easy to administer
and enforce, involving a system of decentralisation going down to the
local areas, the administrative costs being kept to a minimum;
- the delivery of benefits ad services must be worked out with reference to the convenience of the covered members.
Since this would be a difficult venture, pilot projects
in carefully selected areas would be required to be set up for trying
out and evolving a scheme, permitting modifications in the package of
benefits and the procedures to be introduced and experimented with. Apart
from the special scheme, it would possible for the project to aim towards
better social protection in two other spheres - one, through the extension
of formal sector schemes, and, two, through ensuring better access to
the social assistance programmes of the Government. This should be feasible
on account of the special base created at local levels for implementation
of the project.
2. Project areas
in Gujarat and Andhra Pradesh
Pilot projects are intended to be set up in selected
areas of two States in India, namely, Gujarat and Andhra Pradesh. With
a population of 41 million and 66.5 million, respectively, together they
hold 13% of the country's people. Each of these States represent a different
level of development. While Gujarat is a more progressive state with a
greater degree of industrialisation and urbanisation, Andhra Pradesh is
more agrarian and rural based. In terms of per capita income, Gujarat
is amongst the first five highest Indian States. Andhra Pradesh, on the
other hand, is one of the more backward and poorer States with almost
32% of its population below the poverty line as against Gujarat which
has around 18% and the national average of 29% population below the poverty
line. Gujarat has achieved a much higher level of urbanisation (34.5%)
being second in the country while Andhra Pradesh with less than 27% urban
population lags behind ranking 15th amongst Indian States.
While both the States have a higher than the all-India
work participation rate, agricultural employment in Gujarat is only 56%
as compared to 80% in Andhra Pradesh (national average being 65%). Women's
share of employment is, however, more in Andhra Pradesh (35%) than in
Gujarat (31%). Both the states are representative of the country's general
trend towards increasing rates of women's employment. In terms of literacy,
Gujarat also has shown a much better performance (61%) while Andhra Pradesh
with 44% of literates is much below the all India level (52%).
The social security projects taken up in these two
States would thus be relevant and useful for other States of the country
which, being at different stages of development, may be closer to either
of the project states..
Keeping in view the requirements for a successful
experiment in a difficult and complex sphere, suitable areas in the two
States have been identified with reference to certain broad parameters
for taking up appropriate pilot projects. Within an identified district,
a project area has been selected in consultation with State Government
officers for setting up a special scheme for providing social protection
to the informal sector and self-employed workers in order to move towards
universal coverage. These parameters pertain to -
-
- the existence of a substantial population which is not covered by
the existing schemes especially the informal sector ones, which would
establish the need;
- the area being representative in having both urban
and rural population and also being able to specifically target women
workers;
- a paying capacity and a willingness to contribute
- elements that are essential to make the scheme financially viable;
and,
- the availability of a proper organisational network that would make the operation of the scheme feasible.
Keeping in view the above parameters, Anand taluka
(a revenue division) of Kheda district in Gujarat and Nizamabad revenue
division of the Nizamabad district in Andhra Pradesh have been selected
for pilot projects in consultation with the state and district authorities.
A description of certain salient features of the project areas in the
above context would bring out the positive factors favouring the selection
and would also indicate the broad directions which the new scheme would
take under the pilot project.
2.1 Anand in Gujarat
Anand in Kheda has been a pioneer in the cooperative
dairy movement in the country and is comparatively a more prosperous area.
The Kheda district is largely agrarian and has a sizeable working population
(around 65%) depending on agriculture and related activities as against
the State average of 56%. The increase is mainly on account of a higher
proportion of agricultural labourers who are generally poorer and more
deprived as against cultivators. Facility for irrigation appears to be
available to over 60% of the cultivated area. In Anand, where women constitute
about a fourth of the workforce, it needs to be appreciated that most
of them are engaged in disadvantageous jobs. Women form one third of total
field labour and almost the total (96%) of marginal workers. Combined,
these two categories form 76% of the women workers.
The level of urbanisation while much less in Kheda
district (only around 23%) has attained the average level for the State
in the Anand taluka (35% of its population being urban). Anand has two
municipalities and four boroughs. The overall density of population for
Kheda district is high (478 per 1000), being next only to the capital
district of Gandhinagar and Ahmedabad. The higher percentage is mainly
due to the rural areas being about two and a half times more densely populated
than the State average. In terms of special groups, while Kheda has a
little less of the Scheduled Caste persons than in the State as such,
there are very few Scheduled Tribes. The proportion of people under the
poverty line in the district is only marginally higher than the State
level of 18.23%.
In terms of literacy, although Kheda with around 66%
literates fares better than the overall level in Gujarat State, it is
worth noting that the female literacy in rural areas is only at 44%. Moreover,
despite the comparative edge that the district has from some of the developmental
aspects, it has alarmingly high rates of child mortality, in fact the
highest in the State. Also, the public health infrastructure is much less
extensive in Kheda district when compared to the overall level in the
State. There are fewer Community Health Centres, Primary Health Centres
and Sub-Centres per one lakh of population. However, the district has
a good number of hospitals in all, including Government, Government aided
and in non-Government sectors. It also has a medical college, two homoeopathic
colleges (all three located in Anand taluka) and an Ayurvedic college.
The major strength of the Kheda district is the prevalence
of cooperatives. There are as many as 3301 registered cooperative societies.
The most numerous of these being the milk cooperative societies (950)
which are organised all over the State in three tiers, the village level
society, the District Union and the State Federation. The milk products
of Anand Milk Union Limited (AMUL) have become a household name all over
India. There exist now around 80,000 milk cooperative societies with more
then 8 million member farmers in the country. Apart from dairy, the prominent
areas in which large number of cooperative societies are functioning are
agricultural credit and non-credit, irrigation, employees' credit, marketing,
banking, housing, labour, etc. Although all cooperatives are not successful,
Gujarat with its traditions and cooperative culture has many of them functioning
well, even the milk cooperatives which have been extremely successful.
And yet, there is a feeling and an assessment that the poorest have been
left outside the cooperative movement which has benefitted many. Insofar
as the trade unions are concerned, although there are some unions affiliated
to the Textile Labour Association, the Indian National Trade Union Congress,
All India Trade Union Congress, the general impression is that they are
not very active.
Anand also has the presence of the Gujarat Cooperative
Milk Marketing Federation Limited (a prominent State level body); the
National Dairy Development Board which has been instrumental in the movement
for dairy development in the country (and generally referred to as the
white revolution'); and the Institute of Rural Management, Anand, which
conducts short and long term courses for specialisation in rural development
and management.
Gujarat, like some other Indian States, also has a
strong base of voluntary organisations working in many social and development
areas. Their presence and credibility, apart from their own activities,
is considered to enhance people's access to public services and also to
facilitate the taking up of new programmes. Mention may be made, by way
of illustration, of two of the NGOs that are active in Kheda and in Anand.
Emphasising the overall and integrated development
approach, the Self-Employed Women's Association (SEWA) has been trying
to give both economic and organisational strength to women workers especially
in the informal sectors. With over 40,000 members of the SEWA union in
Kheda, it is operating in about 400 villages of the district and has been
able to mobilise savings groups in half of them. For making women self-reliant,
its strategy involves the forming of cooperatives, the development of
women's leadership and providing supportive services in health and child
care, banking and legal aid. It is making efforts to link up with the
Government's poverty alleviation programmes (notably Integrated Child
Development Services and DWCRA) which came to the district rather late
on account of its perceived comparative prosperity. The organisation is
proud of being instrumental in bringing about a 25% increase in the wages
of tobacco workers in farms and factories (half of the 40,000 such workers
being women) even though the wages are said to be still below the minimum
levels notified by Government. SEWA, Ahmedabad, has also taken initiative
in operating a health insurance scheme (joined by 15,000 of its members)
as part of an integrated social security package. Another voluntary organisation,
Tribhuvan Das Fonadation, is concentrating on preventive aspects of health
care along with curative services for common ailments, supplemental nutrition
and development of handicrafts in the rural areas. Safe deliveries have
also been a point of focus for the organisation which have found that
70% of the total are home deliveries. The Foundation has been able to
raise small regular contributions from its members besides being financially
supported by the milk union. Improvement in health care services is felt
to be the urgent need of the area.
So far as formal social protection is concerned, in
the State as a whole, only 7% of the workforce is covered under the Employees
Provident Fund (&MP) Act (around 1.2 million subscribers out of a
total of 17 million workers). The percentage of those covered in Kheda
district and in Anand taluka is not likely to be any higher. The ESI scheme
is yet to come to Anand, although it might become available for about
10,000 workers in the near future since the State has already recommended
the same to the ESI Corporation. But, this would mean a benefit for merely
5% of the organised sector workers (most of whom are in the overlapping
purview of EPF) out of the total workforce of over 210,000 of Anand taluka.
The benefits of gratuity and maternity under the relevant laws are largely
available to the same organised sector, where also the actual receipt
of the benefits on an all-India basis has not been found to be very satisfactory.
The main benefits for the majority of workers are
thus only available through the social assistance schemes of the Central
and State Governments, the extent of some of which may be briefly noted
here. The poverty alleviation programmes mentioned earlier are mostly
applicable in the district. The self-employment schemes targeted to those
below the poverty line (18% in Gujarat) especially the IRDP, have been
stated to have assisted the women workers very significantly (up to 70%
of the total beneficiaries). The extent to which the programme helped
them in crossing the poverty line was, however, not readily known. The
wage employment programmes which have the virtue of self-targeting were
in some evaluations found to have certain positive features along with
a number of negative factors. Where implemented very intensively, the
programmes were found to have brought about wage increases and to have
reduced the debts as also the extent of out-migration. Although the idea
of a social audit' by the poor was not yet achieved, the village Panchayats
were observed to be learning to use the funds more effectively for public
works, albeit a great scope for improvement was noted. (Reference 16,
Basic Social Protection for All in Gujarat)
The State has been giving a small monthly pension
to the destitute above the age of 60 years under the Old Age Pension Scheme.
In Kheda district, such assistance is being given to around 900 persons,
70% of whom are women. The pensions for those above the age of 65 years
are reimbursable to the State by the Central Government under the National
Social Assistance Programme. The second benefit under this Programme pertains
to a life insurance cover for the primary bread winner of the family to
the extent of Rs.5,000/- in the case of natural death and Rs. 10,000/-
in case of death due to accident. Assistance during maternity to the extent
of Rs. 300/- is the third benefit under the NSAP which is likely to be
available in the Kheda district shortly. The national scheme replaces
the states scheme of maternity benefit for landless women agricultural
labour under which a higher benefit of 6 weeks and 4 weeks notified minimum
wages (amounting to Rs 630 & Rs 420) for the first and second pregnancies,
respectively. The scopes of the two schemes though overlapping are not
identical; the national scheme being extendable to families of all workers
below the poverty line while the state scheme, although restricted only
to women landless agriculture workers, covered such workers above the
poverty line as well. It may be mentioned that all these social assistance
programmes are limited to those below the poverty line and are thus not
available to more than 80% of the workers.
The coverage by central welfare funds in the district
is insignificant. A small assistance of Rs.500/- for the cost of medicines
is available under a State scheme for agricultural and rural labour in
cases of serious diseases but the extent of utilisation is rather limited
(around 2,000 persons in a year all over the State).
Various group insurance schemes are also being implemented
in the district. The landless agricultural workers are insured for a sum
of Rs. 1,000 and Rs.2,000, respectively, in cases of natural and accidental
deaths. The sum assured is meagre, and small cultivators (not being landless)
and other informal sector workers in non-agricultural sectors would not
be covered under the scheme. However, the most extensive cover that is
now offered to all classes of agricultural and other rural workers, numbering
around 7 million, is through a new scheme effective as from January 26,
1996 and manage by the Life Insurance Corporation to whom the premium
is paid by the State government. The sum assured is also substantial being
Rs. 20,000 in cases of accidents resulting in death or permanent disability
and Rs.10,000 where partial disablement occurs. However, the scope is
limited since natural death is not covered. An initiative has also been
taken by the milk union to provide an insurance to its over half a million
members, the premium being shared by the member, the village society and
the district union. Again, it covers only accidental death and disability
while leaving out natural deaths. It is significant to note that out of
every 1,000 deaths there are only 6 or 7 accidental deaths. Thus, most
families losing the earning member would not really be helped even though
their loss would be as great. Natural death cover is provided mainly under
Landless Agricultural Labour Group Insurance Scheme mentioned at the beginning
of this para.
2.2 Nizamabad in Andhra Pradesh
Revenue division of Nizamabad comprises 14 out of
the 36 mandals (blocks) of the Nizamabad district, having both rural and
urban areas and holds almost half of the district's total population of
over 2 million. The district falls in the most backward Telengana region
of Andhra Pradesh (the coastal region being the most prosperous and the
Rayalseema having an intermediate level of development). Within this backward
area, the Nizamabad district is comparatively more advanced mainly on
account of better irrigation facilities. The major and medium irrigation
projects (Nizamsagar, Sreeramsagar, Pocharam and Ramadugu) together with
other minor sources means that irrigation serves 59% of the cultivated
area of the district as against the state average of 39%. This has helped
the agriculturists comprising 65% of the one million workers in the district
- half of them directly (the land owning cultivators) and the balance
agricultural labourers through provision of work opportunities in the
more extensive double cropped areas. For most of the rural workers, it
means a situation of almost no unemployment.
The work force participation rate (WFPR) of 48% in
Nizamabad is much higher than the state and national averages of 43% and
38%, respectively. Besides agriculture, the largest employment sector
is beedi manufacturing which employs more than 200,000 workers in around
2400 establishments. The district also has a much higher proportion of
workers in the household industry sector (16%) as compared to 5% in the
State as a whole. While the district has a favourable sex ratio, it also
has an overall female WFPR of 45.3% which is substantially higher in the
rural areas (52%) - an evidence of greater economic compulsions rather
than of any advanced status of civilization. The proportion of child labour
in the workforce (7.75%) in Andhra Pradesh, which is the highest in the
country, is a clear indicator of its low status in human development terms.
Most of the women workers are agriculturists but a majority of them work
as hired wage labour on other farmers' fields. The household industry
sector employs most of the women working outside agriculture (28%). In
the urban areas, over 45% of the women workers are engaged in this sector.
Since both agricultural labour and household industry are employment areas
which lack security of work and wages, women workers are in a particularly
disadvantageous position.
The level of urbanisation in Nizamabad district (20%)
is less than the overall State level (27%) making the district even more
rural (80%) and agrarian in character. The main urban centres are the
headquarters of its three revenue divisions, namely Nizamabad, Kamareddy
and Bodhan which have municipalities and only three other town areas (Armoor,
Sriramsagar Colony and Banswada). The project area with 30% urban population
has 3 towns and 321 villages (over a third of the districts 923 villages)
and 252 gram panchayats.
The district has a low level of literacy (34%) which
is even lower than the percentage for Telengana region (35%). This presents
an anomalous situation especially in view of the districts comparative
prosperity within the backward region. Andhra Pradesh itself has a lower
literacy level (45%) than the all India average (52%) and Nizamabad is
deficient by a further 11%. Female literacy in rural areas is abysmally
low at 15% and very high drop out rates, which for the scheduled tribes
at 80% are amongst the highest in the State.
The health infrastructure in the district is inadequate
with only 12 hospitals, 37 Primary Health Centres (PHCs) and 6 Community
Health Centres (CHCs). According to the norms adopted at the national
level, a substantial strengthening is required; PHCs need to be twice
and the CHCs thrice the existing numbers. For hospitalised care, the bed
strength available is only 815 which amounts to one bed for every 2500
persons as against the norm of one bed per thousand. In terms of locational
accessibility, only one fourth of the villages in the district have any
medical facility, the majority having access within 3 kilometres, while
for 10 per cent of the villages such facility is more than 3 kilometres
away. Since the public health care is generally cheaper than from the
private sources, the lack of public facilities both for domiciliary and
hospitalised treatments hits the poor and the low income groups the hardest.
It is also noteworthy that in rural areas of Andhra Pradesh out-patient
treatment is 4 times costlier than in the urban areas. It is for these
reasons that various groups of workers as well as women seem to consider
health services as the most important priority requiring attention. For
this benefit, a willingness has also been expressed for making regular
monetary contributions. Insurance against death and disability and credit
facility are other areas where need for security appears to be keenly
felt by the workers.
It is surprising that even with almost 60% of irrigation
facilities, Nizamabad continues to have 41% of its population below the
poverty line which is only marginally lower than the State average of
43.7%. For the people belonging to the Scheduled Tribes, this proportion
is much higher (57.7%) . The situation is indicative of the prevalence
of significant inequalities in income distribution. The national and state
programmes for poverty alleviation mentioned earlier are, however, being
implemented in the district. The availability of cheaper rice for the
poor, subsidised to the extent of 75% under the special state scheme 'Rs.2
a Kg rice', has been much appreciated. Other welfare measures include
a grant of a monthly old age pension to various categories of destitute,
widows and landless agricultural labourers under different state schemes.
The amounts of pensions available to more than 30,000 persons in the district
are quite meagre ranging between Rs.30 to Rs.50 per month, and for old
age pensioners above the age of 65 years this amount has now been enhanced
to Rs.75 per month under the central government's National Social Assistance
Programme (NSAP). A more liberal maternity assistance of Rs.900 (as against
Rs.300 under the NSAP) limited to two pregnancies is being given to more
than 2000 women every year in Nizamabad. Insurance benefits are also available
under various group insurance schemes, the sum assured varying between
Rs.1000 to Rs.10,000. The benefits are limited since most of the natural
deaths either remain uninsured or the coverage is for very low amounts;
the benefits are comparatively more substantial in the case of accidental
deaths.
Under the formal social security, the district has
comparatively better coverage under the Employees' Provident Fund (and
Miscellaneous Provisions) Act, 1952, there being almost 350,000 subscribers
in Nizamabad and the neighbouring areas falling under the Nizamabad Sub
Regional Office of the EPF. Andhra Pradesh and Nizamabad District within
the State have indeed set an example for coverage of beedi workers under
the EPF despite their being largely home-based. This has been possible
through the mechanism of issue of identity cards under the Beedi Workers'
Welfare Fund, a statutory fund established at an all India level with
the cess moneys collected from the beedi manufacturers. More than 2/3rds
of the beedi workers in the State have already been issued the identity
cards which has facilitated the informal sector of beedi workers getting
the benefit of the formal sector schemes for Provident Fund and now also
for a comprehensive pension. The beedi workers under the Welfare Fund
have also, especially in Nizamabad, got other benefits such as educational
scholarships for the children and housing, an area where notable achievement
has been possible through a good team work and coordination amongst the
officers of the central and state govts. and the district authorities.
The Employees State Insurance scheme (ESIS) , however, has a low coverage
in the district, only 5500 employs, and two dispensaries have been set
up (although a 50 bedded hospital is, now coming up in Nizamabad) . But
it may be mentioned here that the ESIS does not yet extend to the beedi
and workers with the result that its significant comprehensive health
care benefit is not available to them. As for the health care facilities
extended under the Beedi Workers' Welfare Fund there is merely one static-cum-mobile
dispensary for more than 200,000 beedi workers in the district as against
the norm of one dispensary for every 5000 workers.
3. The area-based
pilot project
From the foregoing it is evident that viable schemes
for comprehensive social insurance are feasible in Anand and Nizamabad
on contributory basis under pilot projects. The present availability of
such protection is insubstantial leaving out many groups of the workforce
and is also unsatisfactory in qualitative terms. The workers have shown
their capacity as well as willingness to contribute for life insurance
and health services. The social protection areas and the level of benefits
in order to be meaningful will have to be worked out under the project
in consultation with the beneficiaries, their representative organisations
such as the cooperatives, the voluntary agencies, as also the insurance
companies and local and State administration. Informal consultations with
various agencies (workers associations, voluntary agencies, women's groups,
Government officials in various Departments) indicate that the priority
areas requiring support and protection are health care and insurance against
death and disability. Provision of an old-age pension and availability
of credit for productive enterprises as well as education of children
are also seen as significant requirements for the purpose. To be realistic,
at the outset it may be better to begin with benefits that are seen as
the most crucial and the very minimum, these being a system of health
insurance and life security. Other benefits can be considered for addition
after the scheme establishes itself and its various mechanisms are worked
out.
While the working out of a health insurance scheme
in detail would be an exercise to be taken up as a project activity, some
of its broad aspects may be mentioned here. So far as the scope of health
care is concerned although the insurance companies prefer to limit it
to major illnesses and hospitalised treatments, the beneficiaries themselves
favour a more comprehensive package that would include primary health
care as well. Since the day to day requirements are seen as more immediate
and real it would be desirable to work out a system that can take care
of primary and even preventive health needs. This would further necessitate
a decentralised delivery system which can ensure locational access to
the insured workers and their families. Apart from assigning of doctors
for identified geographical areas the health insurance scheme would require
tie-up arrangements with hospitals (public and private). A certain degree
of managerial control by the local groups would also be necessary for
an effective and satisfactory service. The organisation of medical assistance
in terms professional service and financial arrangements could take different
forms with reference to the primary, secondary and referral services.
The premium collected would require to be pooled for the entire project
area in order to have a broader base for setting off the higher expenditure
levels in complicated and chronic cases. Yet, there could be provision
for allocation or retention of a portion of the collections at intermediate
levels to defray certain types of expenses. The public and private infrastructure
could both be considered for utilisation as providers but the extent and
manner of use would need to be worked out.
Since most of the group insurance schemes introduced
are unable to give adequate security in cases of natural death which are
indeed the most numerous, it would be desirable to extend cover for an
equal sum assured irrespective of the cause of death or disability. With
the group being large, this may not be difficult. Also an appropriately
graded level of benefits would take care of the different economic strata
as well as of the rural and urban priorities. For large groups insurance
schemes offer significant discounts (extending to over 66% for groups
of more than 50,000 in some cases) which can be availed of. Past experience
has shown that simplicity and convenience of procedures will be essential
as also a degree of flexibility. The role and association of the nodal
agencies will be crucial at all stages, from the working out of the scheme
to the delivery of services and its supervision. It would thus be possible
to formulate viable schemes keeping in view the normative requirements
mentioned in para 10 earlier. Financial contributions from the State Governments
which have shown a great deal of commitment as also others could be identified.
The conditions existing in the project areas indicate that taking up of
such a project could be a promising exercise. Activities proposed under
the project are described in annexes 1 and 2.
In the case of informal sector workers collection
of contributions and disbursement of benefits linked to them being a challenge,
the process of designing and evolving a scheme would require a number
of activities including studies, extensive and intensive consultations,
workshops, training, finalisation and implementation of the scheme, its
monitoring evaluation and efforts for its replication. An initial study
with base data collection would be required in respect of the current
social security status in the project area covering formal social insurance
systems, the social assistance programmes and the self-financing initiatives.
The study would be expected to lead to identification of gaps and difficulties,
their analyses and remedial possibilities.
In each area the project is proposed to be administered
at the district level under the guidance and supervision of the state
government, the national project coordinator having the overall responsibility.
Collector of the district would head the governing body of the public
trust or the registered society, a legal entity for the social insurance
scheme and fund, other members being drawn from representatives of the
democratically elected panchayats and municipalities, the concerned government
departments, groups and societies of the beneficiaries, NGOs, providers
of the benefits and services, and the professional agencies. There would
be a project team, (fitting within the district administrative set up
itself), consisting of a project officer and two other staff (including
one with proficiency in finance and accounts). This team would work on
various activities under the project including identification of target
groups and their organisation, holding detailed consultations with them
regarding aspects that are crucial to their social insurance (contributions,
benefits, administrative mechanisms and detailed procedures) which would
be important inputs in the evolving of the scheme. Ascertaining the possible
role of the local government bodies (both rural and urban), the tie-ups
with various government and professional agencies, private providers especially
for health insurance are likely to substantially engage the project team
in the initial phase besides giving necessary assistance in conducting
the studies and base line surveys. Once the scheme is finalised the team's
major responsibilities would be in terms of its implementation, direct
supervision and constant review with all the participating groups and
organisations, maintaining of necessary records and documentation for
monitoring and evaluation.
The replaceability of the pilot project once it succeeds
in Anand and Nizamabad would appear to be greatly possible. The setting
of the project within the district framework while advantageous for the
continuance and sustain ability of the scheme would also facilitate its
replaceability. Expansion of the scheme within the district to areas outside
the project is in fact built into the structure of the project itself
and can be achieved without requiring any further mechanisms. As for other
districts in the project state as also other states in the country since
the administrative framework is broadly similar at the district level
throughout the country once the feasibility of the scheme is established
in the project areas its introduction elsewhere with necessary local adaptations
would be easier. The need all over the country is self-evident. Central
as well as other State Governments have been showing increasing concern
and commitment towards programmes for social protection. As the framework
for a large scale coverage especially of the self-employed and informal
sector workers emerges many local variations would be facilitated. A beginning
made from a point of strength gives confidence and hope for a promising
expansion.
Annex 1 Project activities
Remark: Not all the tables referred to in the text have been included
in this Web document. In order to obtain a copy of the complete document,
kindly contact the Social Security
Department.