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One in Six Globally, But is India Counting its Own Workers?

Smita Srinivas
February 24, 2008

Consider the following three facts. First, approximately every sixth person in the world is Indian. Second, for the first time in the history of humankind, the majority of people live in urbanized regions, concentrating poverty in new ways. Third, India 's industrial sectors have distinct spatial characteristics that mirror caste, jati, and gender features of Indian workers. These citizens are poorly counted by both the government and unions. These facts raise critical questions about the number of Indians without basic food security, healthcare, shelter and employment options.

How should a country support hundreds of millions of citizens and workers who have no easily identifiable employer? What forms of security should it provide workers? How should we think about employment and social policy? If one listens to the pundits speaking of an 'India Shining,' one might imagine that we have addressed this contingency. However, if India imagines that its future is one of emulating the trends of the West, it may be in for a rude shock, given that the State does not even know who and where its citizens are.

The Smart Cards system proposed by the Planning Commission sounds impressive, but ignores the complex institutional realities of why people are currently unregistered. What is our system of enumeration that will guarantee them access to viable (and mobile) social security, and importantly, how does it link with systems that local groups across India have operational already?

The risks to poor Indians are large and even for the working, ill-health, loss of employment itself, or any other contingency can wipe out employment gains and savings. A comprehensive set of social security measures would include healthcare and insurance, maternity benefits, unemployment coverage, old age/pensions, and disability and life insurance. Even in the so-called "organized" sector, with the possible exception of civil services, a very large insecurity exists with increasing sub-contracting, and debatable conditions of work. The fact that progressive legislation for workers has existed for decades in the country, makes the reality of lack of realistic access to basic social securities arguably even more damning.

Have the conservatives got it right? Should India wait for large periods of economic growth followed and to some degree paralleled by some redistribution? Or is something more urgent called for? Across India , community, non-governmental and private programs in healthcare and health insurance are on the rise. In the past decade, the largest out-of-pocket expenditures have been by some of India 's poorest on private healthcare. Economic hawks use this to argue for less government and more economic growth. Certainly, the latter probably will. However, there is little evidence that India cannot afford a universal health insurance scheme, or a universal Social Security mandate. Deep institutional cleavages also need much further attention and investigation.

The Indian State , through the idea of a binding national social compact has attempted in various ways to provide several programs to minimize risks. This model was primarily articulated as a modernizing fabric linking together diverse 'traditional' elements in a secular way leading to 'modern' India . However, India 's post-independence history has not included any particular emphasis on work-based social insurance except for a tiny minority.

So why doesn't India, with even greater uncertainties against a shifting world, have a national social security or insurance program? The reasons often given are that India is too large, too many workers are too poor to make contributions, too many are self-employed, or it would be too expensive, and that too much corruption is inevitable. However, we might want to reconsider the facts about India 's inability to provide such a program. If we compare India to China , our health record is dismal. Even if we ignore comparisons with other countries, conditions within India are changing. Several regional governments have shown that initiatives in health and labor equity are indeed possible, although the evidence on full implementation is patchy.

India 's policy makers, bred in a system of Center and states, have taken the dynamics of localized labor markets as self-evident. How more localized programs for social security (of which there are now many) might link, scale-up, or fragment, has received little attention, which is surprising given the increasing dynamism of several cities in the country and the very real challenges to pooling risks and administering registration rolls across large distances.

India 's policy makers, bred in a system of Center and states, have taken the dynamics of localized labor markets as self-evident. How more localized programs for social security (of which there are now

many) might link, scale-up, or fragment, has received little attention, which is surprising given the increasing dynamism of several cities in the country and the very real challenges to pooling risks and administering registration rolls across large distances.

In 2004, the United Progressive Alliance government announced that it would seek the advice of an expert task force, the National Commission for Enterprises in the Unorganized Sector (NCEUS), to advance a social security program for all the workers in that sector, numbering roughly 355 million. In May 2006, the NCEUS placed its recommendations before the government. The process through which this will be reviewed, implemented and administered is one with significant economic implications for India over the next 50 years. The estimated costs range between 0.5 percent and 2 percent of India 's GDP, and an outlay of approximately 12 percent of the 2007-08 national budget. But there has been no serious discussion by the UPA or state governments about financing future social security program expansion. These financing and institutional design questions are crucial at a time when numerous districts have unspent budgets for poverty-related programs.

We should pay much closer attention not just to the vibrant grassroots organizations that are attempting to create territorially and financially bounded social programs, but to the increasingly fragmented role of the Indian state and its inability to see that basic health care needs and other risks are attended to. The difficulty may be that Indian economic discourse has never seriously considered social security to be a vital part of economic policy. Some interesting experiments have certainly helped social gains: the midday meal scheme by the All India Anna Dravida Munetra Kazhagam in Tamil Nadu, the UPA supported National Rural Employment Guarantee Act (NREGA) introduced in 2005 come to mind. However, the issue of labor registration and enrolment into both the employment guarantee programs and all social security programs deserves much closer attention. Especially absent is any attention to the everyday realities of municipal and district governance, and economic planning for small townships and large urban centers alike. The illegality and insecurity of most types of informal work are state-regulated, confined and coerced. In this atmosphere of uncertainty and violence, full employment guarantee schemes can go far towards a security that a working person needs. However such programs seek no role for business and some argue, build no solidarity amongst workers. In several states these programs have no obvious reconciliation with social policies or programs for increasing productivity of workers.

We must not write off India 's labor movement, far from it. Several newer unions attend to universal programs and bridge schisms between India 's 'organized' and 'unorganized' sectors.

As long as Indian policymakers and analysts see social security programs as 'safety nets' and not an integral part of economic policy, we should not be surprised that the country struggles. Let us neither be naïve about the challenges on the ground in administering such programs, nor romantic about 'self-help' and its promises. At the same time, we must also remember that without state-supported and experimental programs we are unlikely to get very far. The best bet of several state programs and the national plan, is perhaps to limit the extent of benefits and instead focus on health insurance and maternity benefits and to increase the meager amounts specified in the NCEUS recommendations. However, alongside, we need to pay attention to some of the successes by government administrators and inspectors, NGOs and unions. Without a systematic effort at deciphering the rosters of who exists and works, we are unlikely to not just target benefits, but even plan the programs that are being recommended.

The history of several rapidly growing countries worldwide should alert us to the fact that many had attended to healthcare and social inequalities in a substantial manner, at the village, city or national levels that has now allowed them to compound their growth momentum. Several also had institutionalized social security programs for counting people in a way that was relatively transparent and through which further benefits could be derived for citizens. The Indian government and state governments need to consider the evidence anew for what might well set the foundations for India to truly shine in the next 50 years.

Smita Srinivas is Assistant Professor of Urban Planning and Director of the Technological Change and Urban Social Policy research unit at Columbia University.


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