Social Security in India

Social Security in India by WILBUR J. COHEN* India achieved its independence only 6 years ago. In these worker on the first indication of 6 years the Indian Government has faced many fznancial and pregnancy. These and other defects economic problems, but it has put as one of the first measures in the administration of the earlier in its program of domestic reforms and improvements the laws were remedied in part when the establishment of a social security program. The provisions 1948 legislation was enacted. for this program are outlined in the following pages. After the passage of the Employees’ State Insurance Act in 1948, a plan for its progressive application to HE first major social security welfare legislation to be enacted after various regions in the country was program in southeast Asia came the partition of British India. The drawn up by the Employees’ State T into operation in India on Feb- problem of social security had at- Insurance Corporation, the agency ruary 24, 1952. The program, which tracted the attention of the Govern- that had been set up to administer was initiated on a limited basis, will ment of India as early as 1927, in the program. As the problem was new cover about 2.5 million factory em- connection with the ratification of to the country and involved setting ployees when it comes into operation the draft Convention on social insur- up a new technical organization, the throughout the major industrial cen- ance passed at the tenth session of Corporation did not think it possible ters by January 1955. The Employees’ the International Labor Conference, to implement the program through- State Insurance Act, which estab- in that year. In 1931 a Royal Com- out the country simultaneously. Ac- lished the program, provides for mission on Labor recommended the cording to the plan, it was proposed medical services, continuing cash introduction of a sickness insurance to implement the program first in benefits due to employment injury program. In 1943 a social insurance Kanpur and Delhi by July 1950 and or death, cash sickness benefits dur- expert was appointed to study the then to extend it by several successive ing periods of wage loss, and cash question and draft a report on sickness insurance for industrial workers steps until, in 1955, it would be effec- maternity beneflts. tive in all the major industrial In addition, legislation providing in India. The report, submitted in 1944, outlined a program of this type centers. for a separate system of old-age and The Employers’ Association of Nor- survivors savings benefits was enacted for industrial workers. After the Government had fully considered the thern India (Kanpur) raised certain in 1952. This program, initiated by objections, however, to this piece- the Employees’ Provident Funds Act, views of employers, employees, and the State governments and the tech- meal application of the law. It pointed provides for the establishment on a out that if the law were implemented compulsory basis of company (sav- nical suggestions of the International Labor Office, the Minister for Labor in only a few regions, without its ings) plans in certain industries. It simultaneous application in other applies to about 1.6 million employees. introduced a bill in the Central Leg- islature in 1946 that was passed as areas, it would place the industry in India, the second most populous those regions at a competitive finan- country in the world and the eighth the Employees’ State Insurance Act, 1948. cial disadvantage. The Government most important industrial nation, gave consideration to these objec- Two earlier measures providing thus becomes another of the major tions, and an amendment to meet some social security to industrial countries to put into operation a so- them was passed in October 1951. workers already existed in India. cial security system. Although the Under the 1951 amendment all em- These were the Workmen’s Compen- coverage of the system is limited, ployers covered by the law through- sation Act of 1923 and the various protection is afforded against a out India will pay contributions dur- State maternity benefit acts. number of risks. ing the transitional period (1952-54)) Employees’ State Insurance Experience showed that both meas- even though benefits are not yet ures left much to be desired. Lump- available to their employees. Act sum payments under the Workmen’s The Employees’ State Insurance Compensation Act were not satisfac- Scope of the Law Act, enacted in April 1948, was one tory, since such payments are usually The Act applies initially to all fac- of the first major pieces of social spent by the workers as soon as they tories, other than seasonal factories, are received and the disabled workers run with power and employing 20 or * Technical Adviser to the Commis- sioner for Social Security. Material in are left without continuing income. more persons. All employees receiv- this article was obtained by the author The various State maternity beneflt ing a salary not exceeding 400 rupees while he was in India in December 1952. acts were neither uniform nor uni- a month are covered. The Act also Mr. Cohen visited the offices of the Em- versal, and, since each employer bore ployees’ St.ate Insurance Corporation as makes provision for the program’s well as some local offices and a regional directly the cost of such benefits, em- extension, either entirely or in part, office. ployers often dismissed a woman to any establishment or class of es- Bulletin, May 1953 11 tablishments to include other work- small town. It may not be worth while Disablement benefit. - When an ers, including agricultural workers. to establish dispensaries in the small employee suffers an employment in- The Act also provides that medical population centers; even if a dispen- jury in the course of his work, he is benefits may be extended to the fami- sary is established, it may not be con- entitled to receive medical treatment lies of insured employees. This ques- venient and suitable to all insured and also a cash disablement beneflt tion is being studied at the present persons in that area. Moreover, ac- roughly equal to half his wages for time by the Corporation. cording to the Director General, “the the period for which he is certified It is estimated that 12,000 employ- panel system permits every insured as unable to attend to work. If the ers employing 2.5 million persons will person to make free choice of his disablement is total and permanent, be covered by the law when it is in doctor who may be suitable to and an amount equal to roughly half the operation in all the major industrial convenient to him, and provision of wages will be paid as pension for life. areas in 1955. medical benefit to the families of in- For partial permanent disablement, a sured persons in future will be very proportion of the wages will be paid Classes of BeneJt much [morel convenient and easier as life pension. The law provides for five classes of through the panel system . It is Dependents’ benefit.-In the event benefits - medical benefit, sickness expected that the panel system will of the death of a covered worker as benefit, maternity benefit, disable- be speedy and avoid [the1 overcrowd- a result of employment injury, a pen- ment benefit, and dependents’ bene- ing and waiting [customary] in the sion roughly equal to half the average fit. The last two types of benefit are case of dispensaries. The bulk of the wages is available to the widow and payable only in case of occupational medical profession in this country children. The widow’s pension may injury or death. consists of private practitioners and not exceed three-tenths of the wage, Medical benefit.-Medical services it is through the panel system that and each child’s may not exceed one- are provided to insured employees for services of these qualified medical Afth. illnesses whether of occupational or practitioners can be harnessed for the nonoccupational origin. Medical care benefit of the nation’s health. The Qualifying Conditions for and treatment are furnished to sick, Corporation has already agreed to t. Benefit insured persons at State insurance adopt the panel system for the State The qualifying conditions are the dispensaries established for this pur- of Bombay and the Punjab Govern- same for disablement and depend- pose by the State government in ment have also accepted the adoption ent’s benefits; these benefits are various industrial areas. In Delhi of panel system in their State.” payable if the empIoyment injury or and Kanpur these dispensaries are It is expected that the per capita death is sustained during the course manned by full-time medical doctors, expenditure on medical care in India of an individual’s employment. The who treat insured persons and, if will be raised from its present level conditions for the other benefits vary. necessary, visit them at their homes. of less than 1 rupee to about 8 rupees Drugs and medicines are also pro- for insured persons. A person is entitled to medical serv- vided. Arrangements have been made Sickness benefit. - Cash sickness ice during any week for which con- for mobile dispensaries to visit dis- benefits are payable up to a maximum tributions are payable with respect to tant places. of 8 weeks (56 days) in any continu- him or in which he is qualified to A question that is engaging the ous period of 365 days. There is a claim sickness benefit or maternity attention of the Corporation in con- waiting period of 2 days. The benefit benefit or is in receipt of temporary nection with the medical benefit is is equivalent to approximately 7/12 disablement benefit.

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