Social Security in India (An Alternative Approach)

Abstract

The working paper Social Security in India: An Alternative Approach examines the evolution, current state, and future directions of social security in India, with a focus on the vast unorganized workforce. While India’s constitutional and legislative frameworks provide social security for the organized sector, approximately 90% of workers remain excluded from comprehensive protections. Comparative analysis highlights India’s limited expenditure (0.3% of GDP) relative to developed nations (around 30% of GDP) and underscores gaps in health, unemployment, and pension coverage. The paper proposes a localized, three-fold strategy comprising preventive services (food, health, education), protective services (unemployment, disability support), and promotive services (skill development, self-employment). Targeting the 280 million unorganized workers, the approach advocates decentralized governance through cooperatives and Panchayati Raj institutions, legislative integration of existing laws, and a national welfare fund financed by government, employers, and higher-income groups. Estimated at Rs. 16,715 crores annually for protective measures, the proposed framework recommends gradually allocating 1% of GDP to social security. The study concludes that a robust, inclusive, and locally adapted social security system can foster economic resilience, mitigate poverty, and empower millions within India’s unorganized workforce.