In an important move aimed at bolstering social security for informal workers, gig workers, and platform workers, India is set to unveil a dedicated social security fund in the upcoming budget. This significant development aligns with the provisions outlined in the Social Security Code, 2020, marking a crucial step towards achieving universal social security for the country’s diverse workforce.
According to the proposed scheme, informal sector workers will contribute 20.37% of their basic monthly salary to the social security fund. This contribution comprises a worker’s share of 11%, with the remaining 9.37% being contributed by the local government. The basic monthly salary of informal workers currently stands at Rs 10,000 or below.
The social security fund is poised to bring substantial benefits to millions of informal workers who have historically been excluded from formal social security systems. The International Labour Organization (ILO) reports that over 80% of the global workforce operates in the informal sector, facing challenges in accessing adequate social protection.
The establishment of this fund is a vital instrument for uplifting the informal workforce. Informal workers, who often lack the safety net provided by formal social security schemes, will now have a mechanism to safeguard their economic interests. This initiative is expected to significantly contribute to poverty reduction, mitigate inequality, and foster economic growth by enhancing the purchasing power of informal workers.
India’s commitment to ensuring social security for informal workers echoes a global imperative. The ILO emphasizes the need to extend social protection to the vast majority of the workforce employed in the informal sector. By taking this crucial step, India aligns itself with international efforts to create a more equitable and inclusive global workforce.
India’s introduction of the social security fund for informal workers is a commendable stride toward providing comprehensive social protection. This positive development not only addresses the immediate needs of the informal workforce but also lays the foundation for a more robust and inclusive social security framework. As the nation moves forward, this initiative is poised to make a lasting impact, fostering economic stability and social well-being for all workers, irrespective of their employment status.
