Social Security in India with Reference to Fiscal Sustainability and Ageing
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SOCIAL SECURITY IN INDIA WITH REFERENCE TO FISCAL SUSTAINABILITY AND AGEING A THESIS SUBMITTED TO THE MAHARAJA SAYAJIRAO UNIVERSITY OF BARODA FOR THE AWARD OF THE DEGREE OF DOCTOR OF PHILOSOPHY IN BUSINESS ECONOMICS BY HITESH I. BHATIA UNDER THE GUIDANCE OF DR. JAYANT KUMAR DEPARTMENT OF BUSINESS ECONOMICS FACULTY OF COMMERCE THE M. S. UNIVERSITY OF BARODA VADODARA, GUJARAT INDIA JUNE, 2013 I DECLARATION ‘I hereby declare that the thesis titled ‘Social Security in India With Reference to Fiscal Sustainability and Ageing’ is my original research work on the subject. The work has not been submitted previously in part or full in this or any other institute or university for the award of any other degree or diploma. Wherever contributions of others are involved, I have indicated the same with due acknowledgement and reference’. Hitesh I. Bhatia Registration No:- Place: Vadodara Date: II CERTIFICATE This is to certify that the thesis titled ‘Social Security in India With Reference to Fiscal Sustainability and Ageing’ submitted by Mr. Hitesh I. Bhatia, has been carried out by him under my guidance for the award of the degree of Doctor of Philosophy in the Department of Business Economics, Faculty of Commerce, The Maharaja Sayajirao University of Baroda, Vadodara, Gujarat. The work has not been submitted previously in part or full in this or any other institute or university for the award of any other degree or diploma. DR. JAYANT KUMAR Associate Professor Department of Business Economics Faculty of Commerce The Maharaja Sayajirao University of Baroda Vadodara, Gujarat III ACKNOWLEDGMENT Working on my Ph.D thesis has been an overwhelming experience. It is an outcome of various academic activities I remained involved with during the last few years. Thus I am grateful to quite a few people for getting me through the execution of present work. First and foremost I am indebted and thankful to my mentor and research guide Dr Jayant Kumar for his continuous support, guidance and motivation throughout the research. His scholarly insight, subject knowledge and language skills have added considerable value to my thesis. He has remained a constant force of inspiration right from the inception and his invaluable suggestions and meticulous supervision has helped me to complete this work. I am also thankful to him for the fatherly and at times friendly support and care he has extended to me during my research. I am thankful to Prof A. S. Rao for his valuable suggestions which helped me to improve the quality of my work. I extend my sincere thanks to my fellow researcher Ms Archana Fulwari for her valuable suggestions and help. The Head, Dept of Business Economics and Dean, Faculty of Commerce provided the necessary support for which I am thankful to them. I am grateful to the Librarian and the staff members at Smt. Hansa Mehta Library, the M. S. University of Baroda and at Navrachana University, Baroda for their kind support and cooperation during my research. I am thankful to all my students, faculty colleagues and fellow researchers for their consistent encouragement and intellectual support. I would like to take this opportunity to thank my family members especially my mother and my wife for believing in me and extending their love and support in all possible manner. A formal acknowledgement is hardly adequate to express my heartfelt gratitude to God, the almighty, for his blessings. Place: Vadodara Hitesh I. Bhatia June, 2013 IV CONTENTS Declaration Certificate Acknowledgement List of Tables List of Figures List of Boxes Abbreviations CHAPTER – I: - INTRODUCTION AND HISTORY OF SOCIAL SECURITY 1.1 Introduction 1.2 Need of Social Security 1.3 Principles and Strategies of Social Security Measures 1.4 History of Social Security in India 1.5 History of State-Led Social Security 1.6 Social Security in Colonial India 1.7 Social Security in Independent India CHAPTER – II: - REVIEW OF LITERATURE, OBJECTIVES AND RESEARCH METHODOLOGY 2.1 Introduction 2.2 Review of Bismarck, Roosevelt and Beveridge Approaches 2.3 Review of ILO and UN‘s Approach 2.4 Review of Other Global Studies on Social Security 2.5 Review of Indian Studies on Social Security 2.6 Review of Studies on Social Security Reforms 2.7 Objectives of the Study 2.8 Hypothesis 2.9 Research Methodology 2.10 Sources of Data 2.11 Details of the Chapter Scheme 2.12 Limitations of the Study CHAPTER – III: - EVALUATION OF PRESENT SOCIAL SECURITY SCHEMES IN INDIA 3.1 Introduction 3.2 Social Security Schemes for Organized Sector 3.3 Social Security Schemes for Unorganized Sector 3.4 Recent Developments in Social Security Schemes V CHAPTER – IV: - THE LABOUR MARKET PROBLEMS 4.1 Introduction – Employment and Unemployment Situation in India 4.2 Size And Composition of Labour Force 4.3 Composition and Structure of Labor Market CHAPTER – V: - THE PROBLEM OF AGEING 5.1 Introduction 5.2 Concept and Definition of Ageing 5.3 The Problem of Ageing 5.4 Ageing in India 5.5 Determinants of Ageing 5.6 Symptoms of Ageing 5.7 Social Burden of Ageing 5.8 Ageing – A Window of Opportunities 5.9 Need for Social Security for Aged CHAPTER – VI: - FISCAL SUSTAINABILITY 6.1 Introduction 6.2 Approaches towards Public Expenditure 6.3 Fiscal Federalism in India 6.4 Structure of Government Accounts 6.5 Fiscal Sustainability 6.6 Social Security Expenditure in India 6.7 Component Wise Analysis of SSB 6.8 Growth and Share of SSB In Budgetary Allocations 6.9 Financing Social Security- The Problem of Sustainability 6.10 Social Security and Ageing 6.11 Social Security, Fiscal Sustainability and Ageing CHAPTER – VII: - CONCLUSIONS AND RECOMMENDATIONS Bibliography Appendix VI LIST OF TABLES Table No Description Page No 1.1 Evolution of State Sponsored Social Security – A Time Line 23 3.1 Budgetary Allocation and Coverage under NSAP 74 4.1 Unemployment and GDP Growth Rates 83 4.2 Working Poor (UPSS) 84 4.3 Unemployment Rates (Alternative Measures) 89 4.4 Size and Growth Rate of Population 91 4.5 Age wise classification of India‘s Population 92 4.6 Rate of Growth of Population, Labour Force and 93 Employment 4.7 Labour Force & Participation Rates as % of population on 94 UPSS basis 4.8 Work Force & Participation Rates as % of population on 95 UPSS basis 4.9 Age-Specific Labour Force Participation Rates by Sex (all 96 India) (UPSS) 4.10 LFPR for Younger Age Group 15-24 (UPSS) 97 4.11 Gross Enrollment Ratio for Higher Education in India 98 (Alternative Sources) 4.12 Sector wise Employment of Workers (in % & million) 103 4.13 Size and Interconnection between Organized and 103 Unorganized Sector & Employment 4.14 Growth in Investment and No‘s of Central PSU‘s 106 4.15 Employment in Public Sector 107 4.16 Organized Sector Employment by Industry in Public Sector 108 4.17 Organized Sector Employment by Industry in Private Sector 108 4.18 Industry -Wise Composition of Unorganized Workers 109 4.19 State Wise % of Unorganized Workers 110 4.20 Share of Unorganized Workers among all Non-agricultural 111 Workers in Industry Groups VII 4.21 Contribution of Industry Groups to State Domestic Product 112 4.22 Percentage Distribution of Employment by Status- UPSS 113 4.23 Distribution of the Organized and Unorganized Sector 115 Workers By Industry and Status 4.24 Poverty in the Unorganized Sector & Unorganized Sector 117 Workers (Non-Agriculture) By Employment Status 5.1 Effective v/s Official Retirement Age 123 5.2 Percentage Change in Population Ageing (2006 To 2050) 131 5.3 Hundred Years of Population Growth in India 133 (1911 To 2011) 5.4 Birth Rate, Death Rate and Life Expectancy in India 134 (1911 To 2011) 5.5 Percentage Distribution of India‘s Population in Age Groups 135 (1911 To 2011) 5.6 Population Projection Over 60 for the States of India (in %) 136 5.7 Selected Demographic Indicators for India -I 138 5.8 Selected Demographic Indicators for India -II 140 5.9 Trends in Dependency Ratio‘s and Potential Support Ratio 143 (World) 5.10 Intensity of Ageing in Indian States 149 5.11 Distribution of Aged By State Of Economic Independence 151 (In %) 5.12 Disbursement of Pension under IGNOAPS 152 5.13 Beneficiaries Assisted under Integrated Program for Older 155 Person (IPOP) 6.1 Total Budgetary Expenditure of Centre and State Combined 162 (as a % of GDP) 6.2 Distribution of Revenue Transfers from the Centre to States 166 (in %) 6.3 Flagship Schemes Sponsored by Central Government 169 6.4 Average Development and Non Development Expenditure 174 (as a % of Total Expenditure) 6.5 Trends in Revenue-Capital Expenditure and Receipts 177 VIII 6.6 Social Security & Welfare Exp 181 (Average for 1999-00 to 2012-13) 6.7 Budgetary Expenditure on Pension Payments 195 (Average for 1999-00 to 2012-13) 6.8 Budgetary Expenditure on Medical and Public Health 195 (Average for 1999-00 to 2012-13) 6.9 Budgetary Expenditure on Housing Water Supply & 196 Sanitation (Average for 1999-00 to 2012-13) 6.10 Budgetary Expenditure on Social Security & Welfare 196 (Average for 1999-00 to 2012-13 6.11 Budgetary Expenditure on Family Welfare & Nutrition 197 (Average for 1999-00 to 2012-13) 6.12 Budgetary Expenditure on Labour & Labour Welfare 197 (Average for 1999-00 to 2012-13) 6.13 SSB as Proportion of SOR/TR/GSDP 207 (Average for 1999-00 to 2012-13) 6.14 Outstanding Liabilities (OL) as Proportion of 207 TR/ SOR/GSDP (Average for 1999-00 to 2012-13) 6.15 Interest Payment as a Proportion of Revenue Receipts and 208 SOR(Average for 1999-00 to 2012-13) 6.16 Baseline Projection for Growth of SSB as a % of Total 211 Expenditure (2011-26) 6.17 Baseline Projection for Per Capita SSB 60+