SOCIAL SECURITY IN INDIA

INTRODUCTION

Social Security is the Protection given by society to its Member against contigencies of modern life such as sickness,unemployment,oldage & industrial sickness.

ACCORDING TO FRIEDLANDER
According to Friedlander a programme of protection provided by society against the contingencies of modern life- sickness,

unemployment, old age, dependency, industrial

accidents and invalidism against which the individual cannot be expected to protect himself and his family by his own ability or foresight.

The various risks are:

Sickness Invalidity Maternity Employment injury Unemployment Old age Death Emergency expenses

OBJECTIVES OF SOCIAL SECURITY

The purpose of all social security measures in
three fold: I. Compensation: offer financial help when the worker is in a state of physical distress due to accidents ,sickness, invalidity ,disease and old age.

II. Restoration: enable the worker to recover from the shocks injected by inhuman industrial work,rehabilitate himself and get on with his work in a usual manner. III. Prevention: designed to avoid the loss of productive capacity due to sickness, unemployment or invalidity and to render the available resources which are used up by avoidable disease and idleness and thus increase the material, intellectual and moral well being of the community.

THE MAIN OBJECTIVES

To increase the productivity of industrial workers

To improve health and control sickness of industrial

workers To prevent occupational diseases and take the remedial measures To remove mental and physical hazards to prevent industrial accidents To take care of old age and the other consequences resulting there from To ensure that various legislations are implemented properly to achieve the above objectives

THE PILLARS OF SOCIAL SECURITY

SOCIAL INSURANCE
These schemes are financed mainly through contributions of employers, workers and other beneficiaries.

Most are compulsorily established by the law.

Benefits are linked to contributions of insured

persons.

SOCIAL ASSISTANCE
Provide benefits for meeting the minimum needs of the persons of small means. Financed by state funds. Benefits are changeable according to income and means of beneficiaries.

EVOLUTION AND GROWTH OF SOCIAL SECURITY IN INDIA

Evolution has been slow, sporadic and on a
more or less selective basis. Only in case of fatal injuries was some relief provided under the Fatal Accidents Act, 1855. With coming up of ILO in 1919 emphasis was on protecting workers against hazards of industrial lives.

 A beginning was made ultimately in 1923 by passing of Workmens Compensation Act

The next contingency engaging the attention of

the state was maternity leading to Maternity

Benefit Act 1929.

ARTICLE 41 OF THE CONSTITUTION

The state shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to

education and the public assistance in cases

of unemployment, old age, sickness and

disablement and in other cases of undeserved

want.

SOCIAL SECURITY LEGISLATIONS

Workmens Compensation Act, 1923
Employees State insurance Act, 1948

Employees Provident Fund and Miscellaneous

Provisions Act, 1952

Maternity Benefit Act, 1961

Payment of Gratuity Act, 1972

WORKEMENS COMPENSATION ACT, 1923

OBJECTIVE
To impose an obligation upon the employers to

pay compensation to workers for accidents arising

out of and in course of employment. Under Section 2(3) of the Act, the state govt. are empowered to extend the scope of act to any class of persons whose occupations are considered hazardous. Does not apply to armed forces of Indian Union

ENTITLEMENT
A Person should be employed He should be employed for the purposes of the employers trade or business

The capacity in which he works should be one

set out in the list in Scheduled II of the Act

BENEFITS
To be paid by the employer to a workman for any personal injury cost in course of his employment (Section 3) Employer will not be liable to pay compensation for any kind of disablement, (except death)

which does not continue for more than 3 days.

 The rate of compensation incase of death is an

amount equal to 50 % of the monthly wages multiplied by the relevant factor or an amount of Rs. 80,000 which ever is more In permanent total disablement the compensation will be amount equal to 60 % of the monthly wages multiplied by relevant factor or an amount of Rs. 90,000 which ever is more

ADMINISTRATION
State govt. administer the provisions of this Act through the commissioners appointed for specified areas.

State govt. also make rules for ensuring that the

provisions of the Act are complied with.

THE MATERNITY BENEFIT ACT, 1961

 Enacted to promote the welfare of working women The Act prohibits the working of pregnant women for a specified period Applies to every establishment being a factory mine or plantation and every shop or establishment in which 10 or more persons are employed.

 Female workers are entitled for paid holidays not exceeding 12 weeks in a case of maternity and

during this period they are eligible to receive full

wages. There is also provision for pre-natal confinement and post-natal care free of charge failing which employer is liable to pay medical bonus of Rs. 250.

 Incase of miscarriage , leave is available for a period not exceeding 6 weeks

Implementation of the Act depends upon the

goodwill of the employer.

A woman is entitled to maternity benefit if she

has actually worked In an establishment for not less than 70 days in 12 months

THE EMPLOYEES STATE INSURANCE SCHEME, 1948

COVERAGE
Provides For health care and cash benefit payments incase of sickness , maternity and employment injury. Applicable to non-seasonal factories using power and employing 10 or more employees. The Act is being implemented area-wise, in a phase manner. The ESI scheme is operated in 728 centers

ADMINISTRATION
Administered by a statutory body called the Employees State Insurance Corp. (ESIC) Members representing employers, employees, central, and state govt. , medical profession and

the Parliament.

FUNDING AND OPERATION OF THE SCHEME

Financed by contributions from employers and

employees.
Employers contribution is 4.75 % and employees contribution is 1.75 % State govt. share the expenditure on the provision of medical care up to an extent of 12.5 % The ceiling on expenditure per insured person ,family unit has been raised to Rs. 900 per annum

HEALTH BENEFITS
Scheme provides full medical facilities , from primary health care to super specialty treatment. Medical care scheme is administered by the state govt.

 The wage sealing for coverage of employees under the ESI Act, 1948 was enhanced from Rs. 7500 to Rs.10,000 per month

The daily rate of allowance under vocational

rehabilitation scheme is enhanced from Rs. 45

to Rs. 123 per day.

THE PAYMENT OF GRATUITY ACT, 1972

OBJECTIVE
Provides for a scheme of compulsory payment

of gratuity to employees engaged in factories,

mines oil fields, plantations ,ports, railway companies, shops or other establishments.

ENTITLEMENT
Every employee , other than apprentice irrespective of his wages is entitled to receive gratuity after he has rendered continuous service for 5 years or more Payable at the time of termination of his services either i. ii. On superannuation Retirement or resignation

iii. On death or disablement due to accident or disease

 Termination of services includes retrenchment

In case of death of the employee, gratuity is

payable to nominee, and if no nomination has

been made then to his heirs

CALCULATION OF BENEFITS
For every completed year of service or part thereof in excess of 6 months, the employer pays gratuity to an employee at the rate of 15

days wages based on the rate of wages last

drawn The amount of the gratuity payable to an employee not to exceed (3,50,000)

ADMINISTRATION
Enforced both ,by the central and the state government. Section 3 authorizes the appropriate govt. to appoint any officer as a controlling authority for the administration of the Act. the central / state govt. also frame rules for administration of the Act

EMPLOYEES PROVIDENT FUND AND MISCELLANOUS PROVISION ACT, 1952

OBJECTIVE
It is a Legislation enacted for purpose of instituting a provident fund for employees working in factories and establishments The act aims at providing timely monetary assistance to industrial employees and their families.

APPLICABILITY OF THE ACT

Extends to the whole of India , excluding the state of J&K Act is applicable to factories and other

classes of establishments engaged in

specific industries, classes of establishments employing 20 or more persons.

does not apply to employees of state and

central govt. or local authority

SCHEMES UNDER THE ACT THROUGH THE EPFO

Employees Provident Fund Scheme, 1952 Employees Deposit Linked Insurance Scheme, 1976

Employees Pension Scheme, 1995

The Employees Provident Funds Scheme, 1952

Applicability : Every employee
employed in or in connection with the
work of a factory or other establishment covered by the schemes other than an excluded employee is entitled and required to become a member of the

fund from the date of joining the factory

or establishment.

Excluded Employee : An employee who, having been a member of the fund, has withdrawn the full amount of his contribution in the fund (a) on retirement from service after attaining the age of 55 years or (b) before migration from India for permanent settlement abroad; or for taking employment abroad An employee whose pay at the time he is otherwise entitled to become a member of the Fund, exceeds Rs. 6,500/- per month. A person who, is an apprentice, or who is declared to be an apprentice by the authority specified in this behalf by the appropriate Government.

Contribution under EPF Scheme,1952 1. Employees : 12% on Basic + DA 2. Employer : (a) 3.67% on Basic + DA (b) Administrative Charges : 1.10% on Basic +DA

EMPLOYEES DEPOSIT LINKED INSURANCE SCHEME ,1976

Purpose : To provide life insurance benefits to the employees of the establishments covered by the EPF & MP Act, 1952
Applicable to all factories/ establishments

with effect from August 01, 1976.

Employers are required to pay contributions to the insurance fund at the rate of 0.5 % of pay i.e. basic wages, DA including cash value of food concession and retaining allowance, if any.

BENEFITS of EDLI scheme

The benefit provided under the scheme in the nature of life insurance as follows: 1. On the death of an employment while in service a lump sum insurance amount is payable to his nominee or family members. 2. The insurance amount is equal to the average balance in the account of the deceased employee in the Provident Fund during a period of 12 months immediately preceding his death. In case the average balance exceeds Rs.35,000/- the insurance amount payable is Rs. 35,000/- plus 25% of the amount in excess of Rs. 35,000/subject to a ceiling of Rs. 60,000/-.

EMPLOYEES PENSION SCHEME

Was amended and a separate pension scheme was launched on 16th nov, 1995 replacing the then Employees Family Pension Scheme, 1971. Superannuation pension will be payable on attaining the age of 58 years and completion of 20 years of service or more

Early pension can be taken at a reduced rate

between 50 -58 years of age , on completion of 10 years pensionable service

BENEFITS
Superannuation pension Early pension Permanent total disablement Widow or widowers pension Children pension or orphan pension Nominee pension/dependant parents pension

CONTRIBUTION
From and out of the contributions payable by the employer in each month to the PF , apart of contribution representing 8.33

percent of the employees pay is remitted to

the employees pension fund Employer to pay for cost of remittance Central govt. contributes 1.16% of the pay