A mirage sold as a panacea for the unorganised sector

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A mirage sold as a panacea for the unorganised sector

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  • A promise: The Union Labour Minister feels that the four new Labour Codes will generate employment and secure worker rights. Also, they will ensure minimum wages, and social security entitlements. But then why have these Codes not been welcomed by workers? There is cold reception all around.
  • Unpicking the claims: The first claim being made is that universal social security will arrive. But PF and ESI benefits will go only to firms with 10 or more workers, leaving out 80% of all Indian workers (the informal sector). The most omnipresent of workers - paper boys, domestic maids, street vendors - are not covered. [PF - Provident Fund, ESI - Employees' State Insurance]
  • About the 20% covered: In 2016, the ESI covered 2.1 crore workers, and it was 3.6 cr by 2019. Per one lakh beneficiaries, ESI had 6 doctors (WHO norm is 100). So a rapid scaling up is the need for today. The reverse has happened, in the name of "ease of doing business", as employer contribution was cut from 6.5% to 4%, in 2019. As the membership will now rise to nearly 10 crores (with new Code norms), more hospitals and doctors are urgently needed.
  • Regional variations: The more industrialised states (Karnataka, Tamil Nadu) have seen large ESI coverage, while Bihar has seen near zero coverage. Even in the 2020 elections, social security as a poll issue did not figure. Promises are quite basic - to get jobs, rather than jobs regulation.
  • End of cess-based welfare: Many schemes run out of cesses have now been discontinued. One example is that of the Beedi Workers Welfare Board, that otherwise benefited the children by ensuring education. Also, medical facilities were given. Now all that has ended, in return for an undefined promise of universal social security.
  • Promise of minimum wage: Govt. says that today just 30% of all workers are covered under minimum wage schedules, and now a floor wage has been introduced in new Codes, for all workers. While the Expert Committee wanted Rs.375 per day, but the govt. will fix it at Rs.202. This is lower than even the 2011 poverty line family expenditure estimate of Rangarajan Committee. (inflation-adjusted)
  • Other norms: Unions cannot strike work suddenly, and factories can be closed easily. The focus is not on improving the conditions of employment, but ease of doing business. The new Labour Codes are just a fairy tale, that delivers nothing at the end.
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                                                                                                                                                                                                                                                                                          PT's IAS Academy: A mirage sold as a panacea for the unorganised sector
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                                                                                                                                                                                                                                                                                          Excellent study material for all civil services aspirants - begin learning - Kar ke dikhayenge!
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