The Importance of Social Security in India’s National decent work agenda and ILO

Abstract

In India, retirement benefits, in one form or the other, are currently available to only about 11 % of the working population, including Government employees. This leaves 89 % of the working population in the unorganized sector uncovered by any formal pension provision. Unfunded pensions have been a major fiscal drag worldwide. The pressure of pensions on Central and State finances is becoming increasingly burdensome. The concern about low coverage rates by social protection is widely shared. The statutory schemes has often been successful in covering formal sector working on the community-based schemes, and on the other hand, have reached out the occupational groups, rural workers, and disabled member of the community who is outside the pale of state-sponsored welfare programs.

Looking purely from the angle of fiscal sustainability of the States and the magnitude of the problem structural reforms are necessary for new employees, parametric changes are unavoidable for the existing employees as well as pensioners. Studies have shown that, on average, about 90 % of Government employees in India (mainly in Group 'D' and Group 'C' categories) earn more than their counterparts in the private sector. Such Government employees are in a better position to save for their future when compared to the average employees in a large number of private organizations, especially those working in informal/ tiny sector, Small and Medium Enterprises/ service sector organizations, etc. Hence, it would be quite fair and equitable to sanction Government employees an earnings-related pension, which is price indexed, but not wage indexed.