Drop the piecemeal ways to social security for workers

‘Relying on a piecemeal approach can fail to account for the precarious nature of all informal work’ 
| Photo Credit: Getty Images/iStockphoto

India’s efforts to establish social security for online (app-based) gig workers are gaining momentum, with the central scheme awaiting Cabinet approval. Benefits announced include health coverage under Ayushman Bharat, registration on the eShram portal for access to various social security schemes, and a transaction-based pension policy, where a universal account number assigned to each gig worker helps track their earnings across platforms for deductions and company contributions. This pension scheme is particularly notable because, in a way, it acknowledges that gig workers (operating outside traditional employee-employer relationships) can have multiple employers, and ensures that each contributes, albeit in a limited capacity, towards worker welfare. In a country where social security is typically tethered to formal employment and informal workers are excluded or otherwise disadvantaged, this is clearly a step forward.

However, this progress highlights the reactive nature of current social protection systems which tend to respond only when new worker categories emerge. This underscores the need for India to proactively reimagine its social security framework to address these evolving challenges.

The flaws in the existing system

Despite being a founding member of the International Labour Organisation (ILO), India is yet to ratify the Social Security (Minimum Standards) Convention, 1952 (No. 102), the ILO’s Convention aimed at establishing basic social security principles. India’s Code on Social Security (Code), one of its four new Labour Codes, enacted nearly 70 years after the 102 Convention, intends to provide a comprehensive framework for social protection. But it has faced significant criticism for its ambiguous definitions, watered down protections, and on-going implementation challenges.

One of the Code’s most prominent features is its insistence on relying on welfare boards for the distribution of social welfare — a process that has long been found falling short of its intended goals. For instance, a recent Right To Information petition showed that Welfare Boards for Building and Other Construction Workers of various States were yet to use ₹70,744.16 crore worth of cess they had collected from employers for the welfare of workers. In another instance, a Comptroller and Auditor General (CAG) 2024 report found that 99 local bodies in 10 districts had delayed remittance payments to the Tamil Nadu Construction Workers Welfare Board (TNCWWB), amounting to ₹221.8 crore. Even in Kerala, with its strong thrust on worker welfare, only five out of its 16 boards were found to function effectively, with some boards (as per 2016-17 data) not reporting any beneficiaries at all. This has led to repeated calls from activists and advocacy groups for improvements in the management and the functioning of welfare boards.

The problem with incremental approaches

One of the main arguments in favour of India’s fragmented, welfare-board run social welfare systems is its ability to provide targeted relief to segments of workers in need — for example, beedi and cigarette workers of Karnataka have sought the revival of a defunct welfare fund to deal with their welfare woes. Today it is the gig worker; but new worker categories are bound to emerge with advancements in technology or other forces of disruption.

So, relying on a piecemeal approach — as opposed to a combination of universal social protection and targeted support — can fail to account for the precarious nature of all informal work. Such an approach could also create artificial distinctions between different types of informal work such as between gig work and domestic work, and in turn impose arbitrary thresholds on who is deserving of social protection, and who is not.

It is also risky to assume that focusing on just one worker segment will automatically solve the challenge of formalising informal labour. Because right now, there is understandably growing excitement about how gig work will employ more people in the future. But banking on it as a solution to formalising informal labour is overly optimistic.

Towards universal social protection systems

As India strives to make its workforce ‘future ready’, it is crucial to create robust social protection systems that can withstand workforce and sectoral changes. Which raises the key question: what is the most realistic way forward? The Code, despite its implementation logjam, looks here to stay. And while it leaves the bulk of the oversight to the Centre, it allows States some flexibility to enact social security measures within its framework.

A sensible starting point might be to treat the Code’s mandates as the bare minimum, and use these as a foundation to build stronger, more inclusive, accessible and ultimately, universal social protection systems that leave no worker behind.

Renjini Rajagopalan is a lawyer and Research Lead at the Centre for Gender Analysis, JustJobs Network (JJN)