Making out a case for the other UBI in India
GS Paper 2: Welfare Schemes for Vulnerable Sections
Prelims exam: Various Social Security Schemes
Mains Exam: Providing Social Security to people through Universal Basic Insurance
Importance of social security
It took the COVID-19 pandemic to expose the precariousness of human society across the world. As the importance of social security came into focus after the major waves of the pandemic, the debate on universal basic income (UBI) began to resurface in policy circles across the globe. However, there is another UBI that needs to be examined in the Indian context, i.e., universal basic insurance.
Types of security nets
• Social assistance – non-contributory transfers in cash, vouchers, or in-kind to individuals or households in need.
E.g., fee waivers (for basic health and education services); and subsidies (for food, fuel).
• Social insurance – contributory schemes providing compensatory support in the event of contingencies such as illness, injury, disability, death of a spouse or parent, maternity/paternity, unemployment, old age, and shocks affecting livestock/crops.
• Social care services for those facing social risks such as violence, abuse, exploitation, discrimination and social exclusion.
• Labour market programmes – promoting labour market participation or ensuring minimum employment standards.
Social security mainly encompasses food security, health security and income security.
Social Security in India
• India operates the widest spectrum of social security schemes which cater to the largest number of people than any other country. The sheer scale of Indian social security programmes delivered to millions of households spread over a vast geography is mind-boggling.
• For Example:
o The Indian food security programme under the National Food Security Act (NFSA):
The NFSA is the world’s largest food security programme.
About 120 million children are provided free lunch under the Mid-Day Meal Scheme.
In addition, some 50 million people benefit from the free meals programme run by a few State governments.
• Ayushman Bharat Scheme for the unorganised sector with over 490 million beneficiaries.
• In the organised sector, the Central government runs the Employees State Insurance Corporation (ESIC) and Central Government Health Scheme (CGHS) catering to 130 million and four million beneficiaries, respectively.
• Health insurance schemes run by various State governments cover about 200 million people.
• Only about 110 million people in India have private health insurance.
Income security is the trickiest part to tackle in the social security basket.
• For the organised sector, there are three types of provident fund schemes:
o General Provident Fund (GPF) which is availed by Central and State government employees in the country.
o Employees’ Provident Fund (EPF) which is availed by the workers in the other organised sector.
o Public Provident Fund (PPF) that can be availed by any Indian citizen but has contributions from the organised sector mostly.
• There are about 53 million New Pension Scheme subscribers in the country.
For Unorganised sector
• The Pradhan Mantri Kisan Maan-Dhan Yojana (PM-KMY) and the PM-KISAN scheme.
• Atal Pension Yojana (APY).
• The Pradhan Mantri Shram Yogi Maandhan Yojana
• National Pension Scheme for Traders and Self-Employed Persons (NPS-Traders) scheme.
• The largest unorganised sector income security programme is MGNREGA.
So, how many people aren’t covered under social security?
• Out of 500 million workers in India, about 100 million have no income security (pension, gratuity or other income) coverage.
• Despite all the large-scale provisions, about 400 million Indians are not covered under any kind of health insurance.
What about Universal Basic Income?
• Proponents of universal basic income cite the informality of the Indian economy as the hurdle in rolling out schemes such as unemployment insurance in the country.
• However, besides huge fiscal implications (around 4.5% of GDP), the proposal of universal basic income runs the risk of implementation failure due to large-scale beneficiary identification requirements.
Why UBI (Universal Basic Income)?
• The universal basic insurance, is a better proposition for two reasons:
o The insurance penetration (premium as a percentage of GDP) in India has been hovering around 4% for many years compared to 17%, 9% and 6% in Taiwan, Japan and China, respectively.
o Though the economy largely remains informal, data of that informal sector are now available both for businesses through GSTIN and for unorganised workers through e-Shram portal.
• Till the Indian economy grows to have adequate voluntary insurance, social security can be boosted through the scheme of universal basic insurance.
As a prototype of a social security portal based on such data, the social registry portal, ‘Kutumba’, developed by Karnataka is available as a blueprint.[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]