Modi govt to draft code on social security and welfare for the third time

The National Democratic Alliance (NDA) government will draft the code on social security and welfare for the third time, even as it has already moved the codes on wages, and occupational safety health and working conditions for inter-ministerial consultations as part of its labour law reforms push. 

The decision was taken in a group of ministers meeting chaired by Home Minister Amit Shah and attended by Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal and Labour minister Santosh Gangwar on June 11, a senior government official said.

The fourth code — on industrial relations — was not cleared by the inter-ministerial panel and might be taken up at a later stage by the government, the source said. The code on industrial relations was strongly opposed by central trade unions due to proposals relating to relaxation to retrenchment norms and tightening of flash strikes law.

“The code on social security will be re-drafted. The fate of the code on industrial relations is unknown as the ministerial panel didn’t approve of it in the meeting. However, we have expedited the process of bringing the codes on wages, and occupational safety health and working conditions to Parliament,” the official said.

This will be the third time that the code on social security will be drafted by the Centre as it wants a larger consensus from trade unions, industry and state governments. Both trade unions and industry bodies had raised objections to some provisions in the proposed law.

The first draft, released in April 2017, proposed a universal social security cover to all workers through self-contribution or a partial contribution, to be made by either employers or the government. The unions opposed the first draft mainly because it sought to form a decentralised social security system subsuming the present Employees’ Provident Fund Organisation and Employees’ State Insurance Corporation. 

After several rounds of consultations, a second draft was made public in March 2018 which proposed the implementation of the proposed law in a phased manner, along with a public-private partnership (PPP) model for managing the provident fund and insurance accounts of subscribers. The second draft had excluded covering self-employed workers under the ambit of the proposed social security law. 

According to sources, a joint platform of workers and corporate executives known as Industry-Trade Union Dialogue Forum is expected to give recommendations to the government on modifying the code on social security. The body has members from the RSS-affiliated Bharatiya Mazdoor Sangh and the Congress-affiliated Indian Trade Union Congress, and from the corporate side, it has representatives from the Tata group, Indian Oil, Mahindra & Mahindra and various industrial bodies.

While the unions are demanding a universal application of the social security law to the entire workforce, industry representatives feel the unorganised sector should be kept out initially as it will put a huge financial burden on small establishments.

The current social security laws exclude about 90 per cent of the workforce -- mainly in the unorganised sector. The first draft of the proposed social security law had sought to provide social security net to the workforce of over 450 million in the country (as against 45 million at present).