Social Security

Concept
Of
Social
Security
The International Labour Organisation (ILO) defines Social Security as "the security that society
furnishes through appropriate organization against certain risks to which its members are
perennially exposed. These risks are essentially contingencies against which an individual of
small means cannot effectively provide by his own ability or foresight alone or even in private
combination with his fellows. The mechanics of social security therefore consists in
counteracting the blind injustice of nature and economic activities by rational planned justice
with
a
touch
of
benevolence
to
temper
it.
Modernization and urbanization have resulted in radical socio-economic changes and give rise to
new conflicts and tensions consequent upon the erosion of age old family and fraternal security.
The transition from agricultural economy to an industrial economy brought in special
accompanied
problems
that
called
for
social
security.
Indian
Social
Security
System
In India, in the past, social security in a crude form of social protection was made available to
the needy and the unfortunate under the joint family and caste system. Though the joint family
system suffered from deficiencies and shortcomings, its members received some crude form of
protection from the evil effects of various contingencies. Unemployment or any other economic
hardships, old age and other contingencies were not suffered by individual members in isolation.
In these circumstances, the joint family discharged the responsibilities of the social security
agency. Similarly, members of a particular caste were offered safeguards and benefits, such as
medical aid to the invalid, financial help to widows and orphans and educational assistance in
the
form
of
scholarships
and
to
needy
students.
There was, of course, no definite principle or system of law governing these collections and
distributions. In this manner, the joint family and case system provided social security in the
past. Both these system lost their strong hold on society following the development of liberalism
and individualism which were fostered by western influence in India. Urbanization and
industrialization made their own contribution to the disintegration of these systems. The growth
of the concept of the secular state in India has further eroded the continuance of the caste system.
The social security system in India has evolved in obedience to the impact of Western influence
and of the modern urban industrial system. Though the non-industrial classes also are in urgent
need of social security, their needs have been more acutely felt after the advent of
industrialization in the 19th century. Social reformers, labor welfare organizations and many
progressive employers persuaded the government to undertake social security measures as a
protection for the workers at least against a few contingencies. Social security is a major aspect
of public policy today and the extent of its prevalence is a measure of the progress made by a
country
towards
the
idea
of
a
welfare
state.
Article 43 of the Indian Constitution speaks of state's responsibility to provide social security to
the
citizens
of
this
country.

The
social
security
strategies
in
India
include
the
following:
Social insurance with the participation of the beneficiary pooling risks and resources.
Social assistance financed from general revenues and granting benefits on the basis of means
test.
Employers liability schemes where there is an identifiable employer and within the economic
capacity
of
the
employer.

National
Provident
Funds.

Universal
schemes
for
social
security.
The following few legislative measures have been adopted by the Government of India to
promote
social
security
schemes
for
industrial
workers.
Workmens Compensation Act, 1923: The Workmens Compensation Act was passed in March
1923, and was put into effect on 1st July 1924. This Act followed the British model, but was
adapted to suit Indian conditions. Was-time injuries were also covered by the Act. The 1962
Amendment raised the wage limit covered under the Act to Rs.500 per month. It also amended
the clauses bearing on industrial diseases, and revised the rates of compensation. With effect
from 1st October 1975, the wage limit coverage under this Act has been raised from Rs.500 to
Rs.1000
per
month.
Employees State Insurance Act, 1948: Two conventions on health of workers in industry,
commerce and agriculture were adopted in 1927 by International Labor Conference. The
question about health insurance was also discussed by the Royal Commission on Labor, and a
tentative scheme of health insurance was proposed in its comprehensive report in 1931. Its
recommendations on the adoption of a health insurance scheme were not accepted by the
Government of India because of financial difficulties. All these built up a lot of pressure on the
government.
The one-man committee of Professor B.P. Adarkar, set up in March 1943, submitted its report on
a scheme of health insurance for industrial workers in August 1944. It recommended a
compulsory and contributory health insurance scheme for workers in perennial factories in three
groups of industries, namely textiles, engineering and minerals and metals. Bearing all these
modifications and recommendations in mind, the Government of India passed the Employees
State Insurance Act in April 1943, which provides cash benefit in contingencies of sickness,
maternity and employment injury, but did not provide security in such contingencies as
unemployment and old age. The dependents of workers who died as a result of any employment
injury
were
paid
compensation
in
the
form
of
a
pension.
The E.S.I. Scheme stated with coverage of about 1.20 lakh industrial workers in Kanpur and
Delhi on 24th February 1952. It has continued to progress over all these years. By the end of
March 1976, there were 388 centers covering nearly 22 million beneficiaries under this scheme.
The total number of employees and insured persons under the scheme at the end of 1995-96 was
respectively
66.13
and
73.03
lakh
insured
persons.

The ESI Scheme offer both direct and indirect medical care. The direct method is called the
Service System by which the ESI Corporation provides medical care, either through its own
Employees State Insurance Hospital or through reservation of beds in State Government
hospitals. The indirect method is known as the Panel System, under which medical care is
provided through private doctors selected by the State Government with the approval of the ESI
Corporation.
The

benefits

provided
by
Sickness
Maternity
Disablement
Dependents
Funeral
Medical

the

Benefit;

Act

are:
Benefits;
Benefits;
Benefit;
Benefit;
and
Benefit.

All workers, earning less than Rs.3000 per month and employed in power-run factories
employing 20 or more persons are covered by this scheme. However, it does not cover workers
employed by seasonal factories. An insured person under ESI Scheme is not eligible for similar
benefits under the Workmens Compensation Act and State Acts relating to maternity benefits.
INTERNATIONAL
LABOUR
ORGANIZATION
AND
SOCIAL
SECURITY
The International Labor Organization was founded in 1919 for the primary purpose of promoting
social justice and improving the living and working conditions of workers thought out the world.
It made a beginning in this field by emphasizing the importance of comprehensive social
security measures in the Preamble to its Constitution, in which it promised protection of the
worker against sickness, disease and injury arising out of his employment, the protection of
children, young persons and women, provision for old age and injury
In
order
to
implement
these
measures,
the
ILO
took
certain
steps:
It formulated international standards by way of recommendations regarding the definition of
social
security.
It collected and spread the information about social security schemes in various countries.
Its provided technical assistance and guidance so that social security schemes might be
properly formulated by means of co-operation with other social organizations.
For this purpose, an International Social Security Association was established in 1927.
The 1952 ILO Convention on Social Security (Minimum Standard) divided social security
into
nine
components:
Medical Care: This should cover pregnancy, confinement and its consequences and any disease
which may lead to a morbid condition. The need for pre-natal and post-natal care, in addition to
hospitalization
was
emphasized.
Sickness Benefit: This should cover incapacity to work following morbid condition resulting in
a loss of earnings. This calls for periodical payments based on the convention specification.

 Unemployment Benefit: This should cover the loss of earning during a workers unemployment
period when he is capable and available for work, but remains unemployed because of lack of
suitable
employment.
Old age Benefit: This benefit provides for the payment the quantum depending upon an
individuals
working
capacity
during
the
period
before
retirement.
Employment Injury Benefit : This should cover the following contingencies resulting from
accident
or
disease
during
employment
:
(a)
Morbid
condition;
(b) Inability of work following a morbid condition, leading to suspension of earnings;
(c) Total or partial loss of earning capacity which may become permanent; and
(d) Death of the breadwinner in the family, as a result of which the family is deprived of
financial
support.
Family Benefit: This should cover responsibility for the maintenance of children during the
entire
period
of
a
contingency.
Maternity Benefit: This benefit should cover pregnancy, confinement and their consequences
resulting in the suspension of earnings. Provision should be for medical care, including pre-natal
confinement,
post-natal
care
and
hospitalization
if
necessary.
Invalidism Benefit: This benefit, in the form of periodical payments should cover the needs of
workers who suffer from any disability arising out of sickness or accident and who ware unable
to
engage
in
any
gainful
activity.
Survivors Benefit: This should cover periodical payments to a family following the death of its
breadwinner and should continue during the entire period of contingency.
The ILO has suggested various methods of organizing, establishing and financing various social
security schemes. For the benefit of the less developed countries, it has fixed the level of benefits
fairly
low,
so
that
the
schemes
may
be
practicable.
CONCLUSION
Hence we see that social security is an indispensable factor for any labor scenario.
The purpose of any social security measure is to give individuals and families the confidence
that their level of living and quality of life will not erode by social or economic eventuality. A
worker works not only for the economic motivation but also for the sense of belongingness and
security within his workplace. Hence it is the duty of the employer to ensure as best as he can
that his workers have this psychological satisfaction that their as well as their families lives are
socially secure and cared for. Indian legislations have gone a long way in strengthening this
cause and because of this and many other factors, today in the world of labour and employment,

the employee and employers interest is at par with each other and the principal focus is on the
combined interest and satisfaction of both. If these conditions are fulfilled with a joint effort and
contribution from both the employer and the employee then the workplace to a great extent will
become a home of sorts.