Social security for faster growth

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Social security for faster growth

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• Social welfare state: Originally, the constitution's Directive Principles of State Policy envisaged the creation of a social welfare state, as more resources became available. That was the time post-war Europe too was doing it. Social safety net was a major goal everywhere.
• Germany was the first: Chancellor Bismarck introduced social security first in 1880s Germany. It included old age pension, health care and unemployment relief. Why did he do it? To help Germany rise as an industrial power, by enabling workers lead happy and fulfilled lives.
• Indian case: Governments have tried ensuring welfare measures as per the DPSPs, depending on political priorities and resources. The MGNREGA scheme of rural employment (work on demand, 100 days a year) and the Food Security Act were landmark developments. They mitigated stress during Covid times, substantially. Then there is the govt-sponsored Ayushman Bharat medical insurance scheme.
• Role of human beings: In the industrialisation process, workers have to be taken as key components, who make all the difference. Plant and machinery can easily be bought by anyone. Motivated and efficient workers remain the key.
• Poor strength: Just 10% of India's workforce is in organised sector, getting labour law benefits. Use of contract labour is rising steadily, in formal sector too, leading to many contradictions. If Indian manufacturing is to succeed, we need full labour market flexibility alongwith a robust social safety net for entire working population.
• Contributory system: For many decades, social safety was built around a contributory system. But that's now not useful, and the new Labour Codes have taken it into account. Three positives are - fixed term employment; giving states freedom to fix threshold of hiring-and-firing number; covering informal sector in social security code. The last part is critical, and the 90% workers in informal sector and self-employed must be extended these benefits.
• Specific suggestions: India needs a MGNREGA for urban areas. At Rs.20000 crore per year, a fruitful scheme can be run. Then India needs unemployment insurance, as a product. To fund all these, a social security cess on Corporate Profits is needed, even if the 2% mandatory CSR needs to be waived off.
• Skilling: As technology keeps evolving, workers need to be trained regularly. And a strong skills mission can do it. That will also attract more investments. 
• Summary: It is in India's interest to ensure better paying jobs, to end poverty faster, for an 8% GDP growth situation.

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