People's Democracy
(Weekly
Organ of the Communist Party of India (Marxist)
No. 10
March 07, 2004
(Weekly
Organ of the Communist Party of India (Marxist)
|
Vol.
XXVIII
No. 10 March 07, 2004 |
WITH the general elections round the corner, the Vajpayee regime targets nothing but the votes of the unsuspecting, gullible masses of the country, indulging in everything – sops, doles, lavish advertisements, false promises, unabashed lies, frauds and what not. The most cruel part of this package of fraudulent exercises of the BJP government is the one resorted to in the name of a new Unorganised Sector Workers Social Security Scheme.
The
prime minister, Atal Bihari Vajpayee, at a function in his constituency, Lucknow,
on February 22, 2004, launched the social security scheme for workers of the
unorganised sector, providing them old age pension, health insurance and
personal accidental insurance cover for a monthly contribution of Rs 50 and Rs
100, depending on the age of the beneficiary. Vajpayee also handed over National
Social Security numbers to 14 workers at the inaugural function and expressed
the commitment of his government to take care of the social security problems of
workers in the sector.
But
what the prime minister did at Lucknow was only a re-staging of the drama
already enacted by the union labour minister, Sahib Singh Verma. He had launched
the same scheme with much fanfare on January 28, 2004, at the Indira Gandhi
Indoor Stadium, New Delhi.
There
is no second opinion that the social security needs of the vast multitudes of
unorganised sector workers deserve to be taken care of by the government. In
fact, we are tired of oft-repeated exhortations by successive prime ministers,
ministers and the advocates of the liberalised economic policy regime that
‘social safety net’ for the workers, particularly for those in the informal
sector, should be put in place as a priority agenda of the government. Hence,
the ‘commitment’ expressed by the prime minister in this context is
unexceptionable.
But,
the question naturally arises as to why the prime minister remembered this most
important commitment only at the fag end of his six year-long tenure, and that
too after the dissolution of the Lok Sabha and while heading the government in a
caretaker status. The haphazard manner in which the scheme is ‘launched’
raises many concerns, which are neither addressed now nor likely to be addressed
in the near future. These are not mere concerns, which can be dismissed as those
articulated by one with a suspicious eye on the commissions or omissions of the
present regime at the centre. They are such as to cast serious doubts over the
legality, practicality and sustainability of the scheme itself, whatever the
avowed objectives proclaimed by its authors.
DEVOID
OF LEGISLATIVE BACKING
The
first and foremost concern is that the new scheme is not backed up by any
legislation, which is a necessary prerequisite.
Have we not been tired of hearing the prime minister and others crying hoarse on the need for an “umbrella legislation for ensuring a minimum level of protection to the workers in the unorganised sector”? This was precisely one of the two terms of reference to the Second National Commission on Labour, appointed by the Vajpayee government in January, 1999. There had been innumerable sessions of dialogue on this “umbrella legislation”. The prime minister, Vajpayee, himself had, while inaugurating the 39th session of the Indian Labour Conference on October 16, 2003, said: “An umbrella legislation to provide labour protection, medical care, old age pension and insurance cover to the workers in the unorganised sector is also on the anvil”. (Press Information Bureau Release dated October 16, 2003)
Prior to this announcement by the prime minister, it was reported in September, 2003 that “the government plans to offer the unorganised sector of about 370 million workers a scheme which would give them old age pension as well as life insurance and medical cover. A Group of Ministers (GoM) headed by the deputy prime minister, L K Advani, met today (September 26, 2003) and cleared the scheme. … The seven-member GoM decided to provide three basic necessities to the workers in the unorganised sector. A draft Bill has been prepared - the Unorganised Sector Workers’ Bill - under which each worker and five members of his family will get medical cover up to Rs 30,000 a year through a Universal Health Insurance Scheme. It will also give him a life insurance cover for Rs 1 lakh and an old age pension of Rs 500 per month on attaining the age of 60 years. … The union labour minister, Sahib Singh Verma, said that the centre intended to levy an additional surcharge of 10 paise per litre on petrol and diesel to partially generate resources for this voluntary scheme that will cost the government Rs 1,000 crore for covering 5 million workers in the next 10 years. … The scheme will not suffer for paucity of funds because the centre has agreed to bear the expenses," Verma said while indicating that besides this no other cess or tax would be levied. ” (The Hindu, September 27, 2003)
In
fact, the union cabinet did take up the Unorganised Sector Workers' Bill for
consideration at its meeting on November 6, 2003 but deferred a decision
thereon. Sushma Swaraj, speaking to newspersons after the cabinet meeting,
claimed that the Bill sought to extend minimum wages and other social benefits
to labourers in 122 sectors and said the Group of Ministers (GoM) has already
cleared the Bill and the cabinet will again take it up in a week to 10 days.
"The cabinet today discussed the Bill and it was felt that it needs to
fine-tuned and loose ends tied up," she said. She also added that the Bill
was sent back to the labour ministry. (Business Line, November 7, 2003)
The
labour minister, Sahib Singh Verma, in a written answer to a question in Rajya
Sabha seeking to know ‘whether the government is bringing a comprehensive
legislation to cover workers of all the unorganised sectors under the Social
Security Scheme to ensure employment guarantee and to determine the service
conditions’, gone on record as under:
“The
government proposes to introduce a comprehensive Bill for the unorganised
workers. The Bill, inter alia, envisages to regulate the employment and
conditions of service of the unorganised workers. The proposal is under active
consideration of the government.” (Unstarred question No. 1052, Rajya Sabha,
Decemeber 11, 2003)
Sahib
Singh Verma was repeatedly declaring that the Bill would be introduced in and
enacted by Parliament. The Bill never saw the light of the day and ‘generating
resources’ for the new scheme did not figure even among the many election-eve
sops announced by the finance minister in his mini-budget, prior to dissolution
of the 13th Lok Sabha.
But
mysteriously the need for ‘an umbrella legislation’, ‘fine tuning of the
Bill already cleared by the GoM’ etc. have all vanished and the same union
cabinet cleared the Unorganised Sector Workers’ Social Security Scheme all of
a sudden on January 7, 2004.
Nobody
in the government or the EPF Organisation seems to be clear as to how the new
scheme can become operational without an enabling legislation. Yet, the Vajpayee
regime is beating the drums loudly that ‘This scheme will dispel the fears
from the eyes of our poor for all time to come’. It is also blatantly
lying that all the 37 crore workers are covered by this scheme!
If
there was no need for an enabling legislation to introduce social security for
the unorganised sector, why then did the NDA regime indulge in studies and
debates on that very question for years together? Why did it not take this step
during its ‘full’ tenure of office over the last five years? There is only
one answer to all such questions. This is just an election gimmick timed to
garner votes!
Announcing
the decision of the union cabinet to launch the new scheme, parliamentary
affairs minister, Sushma Swaraj, gave a descriptive outline of the salient
features thereof to the media on January 7, 2004.
Neither
the central trade unions nor even the Central Board of Trustees of the Employees
Provident Fund, which is supposed to ‘professionally manage the scheme’ have
been taken into confidence on the details of the new scheme. The website of the
Ministry of Labour has put out two items related to this. One is the draft of
the scheme; another its salient features.
Tall
claims are being made about what the new scheme would fetch the 37 crore
population of unorganised workers in the country. They are being told that they
would get:
The
‘salient features’ published on the ministry website claims the new scheme
to be ‘fully funded’. But, it is not a regular or a permanent scheme. “The
scheme will only be implemented for 25 lakh workers in 50 districts for two
years on a pilot basis, to be jointly reviewed by the Ministries of Finance and
Labour”
If
the assessment of the Group of Ministers during September, 2003, was that to
cover 50 lakh workers the government was to bear a cost burden of Rs 1,000 crore,
one can logically expect that even for a ‘pilot scheme’ to cover 25 lakh
workers an outlay of Rs 500 crore ought to have been provided. Where is the
provision? Will the prime minister and other ministers busying themselves in
‘launching’ the new scheme at different cities in the country bother to
answer?
When
it is claimed to be a ‘fully funded scheme’, the government makes no
mistakes; it clearly stipulates that it would be funded by contributions of the
workers and the employers (where identifiable) and a 1.16 per cent contribution
by the government calculated on the national floor level wage which is presently
Rs 1,800 per month. (The scheme is supposed to cover workers drawing income not
more than Rs 6,500 per month; but the government contribution will be limited on
Rs 1,800 only!)
Where
it is specifically stated that this ‘pilot’ scheme will run for two years
only, the draft of the scheme stipulates that ‘workers in the age group of
36-50 will be eligible to become members only for a period of five years from
the notification of the scheme’ and thereafter doors will be shut for them.
When will the scheme be notified? It is a mysteriously guarded secret. The
draft, as appearing on the ministry website, has only this: “This Scheme will
come into force from …………” (Date left delightfully blank!)
If
the proposed scheme targets a membership of just 25 lakh from among the 37 crore
workers in the unorganised sector in two years, just imagine how many decades it
will take to bring the entire population of the unorganised sector workers under
cover of social security, not to speak of the natural accretions in their
numbers? Is there any guarantee that at the time of review after two years, the
finance ministry, which had reservations over the funding proposal mooted by the
labour minister (through a cess on petrol and diesel) will agree to provide the
massive resources that will be needed to extend the scheme to the whole
community of unorganised workers?
Thus,
the much trumpeted claim of this government having performed the feat of
reaching social security to 37 crore unorganised workers is an empty rhetoric.
The working people in the country cannot be fooled by such falsehoods and will
treat such hypocritical hype with the contempt it deserves!
INCONCEIVABLE
BURDEN
And
what burden the hapless ‘poor with fear in their eyes’ will have to
shoulder?
The
government announcements seem to suggest that the contribution from the workers
will just be a token Rs 50 or Rs 100. But, a detailed scrutiny of the proposed
scheme throws up grim revelations. There are three slabs, according to the age
of the workers, for determining the contributions.
II
Workers between the age group of 36 - 50 years – Rs 100 per month
III
Workers above 50 years of age - Rs 200 per month.
Workers
with no identifiable employers will have to shell out an additional Rs 50 or 100
or 200 per month, as the case may be. Even the government estimate is that only
in 30 per cent of the cases the employer could be identifiable! So,
in effect the contributions will be Rs 100, 200 and 400 per month! And this
contribution has to be paid month after month till attainment of 60 years of
age!
Moreover,
for any unorganised sector worker to become a first time member, one time
enrolment fee of Rs 600/750 (presumably for the 1st and 2nd slabs in the
age-wise grouping) has to be paid towards first year insurance upfront cost! It
will be naïve to believe that the unorganised sector workers will be in a
position to shell out such an amount upfront.
The
government itself has only prescribed a national floor level minimum wage of Rs
1,800 per month. This is on the assumption that the workers in the informal
sector get gainful employment of 25 days in a month. But, the ground reality is
that even the statutory minimum wage fixed for various scheduled employments is
far below the 'national floor wage' and nowhere they are enforced.
An
overwhelming proportion of the unorganised workers do not come under such
'scheduled employments' and the level of wages they get is only a pittance. In
several industries falling under the unorganised sector and more particularly in
the rural sector, workers do not get employed even for 8 to 10 days a month.
Under
such distressing conditions, how does one expect these workers to pay such
phenomenal contributions - judged by their standards - for buying their 'social
security'?
HAPHAZARD
PROPOSALS
The
unseemly hurry with which the scheme has been launched is evident from the
haphazard proposals contained in the draft itself.
The
scheme suggests that “Subject to the provisions of Section 1 (3) (a) and (b)
of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, this
scheme shall apply to all the workers and establishments in the activities
listed in the schedule to the Act.
The
catch is that the pension of Rs 500 per month will be available to only those
who contribute fully and regularly for 30 years and will be
proportionately reduced in other cases!
As
for the health, accident and hospitalisation benefits that have been bandied
about, the less said the better. Four companies, forming part of the General
Insurance Corporation of India, have been identified to deal with the different
regions – north, east, west and south, as agencies providing insurance cover.
But, nothing concrete has been worked out with these companies or with the
Insurance Regulatory and Development Authority (IRDA). The latter had its own
blue print rolled out earlier for what it termed as ‘pension sector reforms’
to cover the unorganised sector as well. But the proposed scheme put out by the
labour ministry is totally divergent from the IRDA prescriptions and it is not
known whether the IRDA will clear the new scheme in its present form.
It
is also not clear whether insurance will be in individuals’ names or as a
group policy. In any case, the workers will be left to fend for themselves to
obtain their claims under the ‘insurance’ cover. If there is a break in
contributions, which is bound to occur in the case of these sections of the
workers, it will benefit only the insurance companies - grabbing the premium
amounts, with no corresponding liability - rather than the workers!
The
cabinet decision outlined by Sushma Swaraj clearly spelt out that the new scheme
proposed “to cover the entire working population in the informal economy and
the uncovered workers in the formal economy due to their being ineligible under
the provisions of the Employees Provident Fund (Miscellaneous Provisions) Act,
1952”.
If
the unorganised workers are ineligible for coverage under the EPF Act, how the
new scheme can be ‘professionally managed’ - note the usage of the word, it
is not ‘administered’ - by the EPF organisation?
AN
UNALLOYED FRAUD!
As
an afterthought, a meeting of the CBT of the EPFO was convened on February 23,
where the proposed scheme, though sketchy, was placed.
The
EPF Act provides for only three schemes – PF, Pension, and Deposit Linked
Insurance. The new scheme is not even an addition to the existing three. But,
the EPFO is directed to roll out funds to the tune of Rs 5 crore on a loan basis
for operationalising of the new scheme initially. But, ‘loan’ to whom? There
is no ‘body’ in place under the new scheme.
The
EPFO has also been directed by the labour minister to create new posts of
officers and staff to attend to the proposed scheme. If this expenditure is to
be later passed on as administration expenses to the new scheme, it is well nigh
impossible. Otherwise, the new scheme will default in delivering the benefits
promised.
If
the EPFO is going about advertising the scheme and incurring the expenditure for
the huge ‘melas’ organised for launching it in different centres, is it not
taking a contingent liability by way of securing the announced benefits to the
members enrolled under the scheme? Where is the authority for EPFO to undertake
such a liability? According to reliable sources, when such questions were sought
to be raised in the meeting of the CBT, the chairman of the CBT is reported
to have told that all the loose ends will be tied up in three months time. What
will happen in the next three months? Only one thing is sure – the elections
will be over and whatever the mileage the BJP wants to derive from presenting
themselves as the ‘benefactors of the 37 crore unorganised sector workers’
will be achieved or missed, depending upon the response of the people.
The
new scheme has an ‘innovative’ provision to appoint individuals,
organisations, NGOs etc. as ‘facilitators’ to enrol members. This has all
the potential of opening up a new scam, where moneys collected could find its
way to fill the coffers of greedy and unscrupulous elements.
Thus
the new scheme for unorganised workers is just not a gimmick
alone - it is a case of unalloyed fraud played against the poor and
destitute sections of the working population of the country. This fraud must be
fully exposed and perpetrators of this fraud meted out the punishment they
deserve - a crushing defeat in the forthcoming polls!
