Former Prime Minister of India - Shri Atal Bihari Vajpayee

Speech of Prime Minister Shri Atal Bihari Vajpayee Seminar on ~Evolving a National Policy on Social Security~ Golden Jubilee of the ESI Scheme

Thank you for inviting me to inaugurate today’s seminar to mark the Golden Jubilee of the Employees State Insurance Corporation I share your pride on your corporation reaching this milestone of fifty years of service to our workers and indirectly to the Nation.

It is a tribute to the vision of our forefathers that they thought of a separate institution to provide social security to our workers even when plans for India’s industrialization were still on the drawing board. This concern for social security was a natural outcome of the close association between the labour movement and the broader political movement during the struggle for India’s independence. Mahatma Gandhi himself founded a labour organization that strove to secure the legitimate interests of the working class.

In our outlook towards life, a worker is not a mere appendage to the vast machinery of production. He is indeed the creator of that machinery. He runs it with the power of his body and mind. Therefore, labour welfare is not some necessary burden that the economy has to carry. Rather, economic activity can have no meaning if it does not guarantee labour welfare and welfare of the society at large.

Friends, the industrial scene has changed dramatically since the time the ESI scheme was established. So too has the labour movement. However, what has remained unchanged is the Government’s commitment to ensure social security for workers through the Employees State Insurance and Provident Fund schemes. I must emphasize that this commitment has continued even after the country adopted economic reforms. This commitment will continue in the future too.

This Golden Jubilee is an occasion to both look at what our social security schemes have achieved and have failed to achieve so far. One thing is obvious: these schemes only cover the organized sector. They do not cover the much bigger unorganized sector, which has poorer workers whose need for social security is greater. Our agricultural workers, construction workers, rickshaw pullers, porters, hawkers, workers in restaurants and shops, and such other businesses in the informal economy are today deprived of even a minimal social security support.

Let us imagine what happens to a daily wage earner, working on a construction site in Delhi, when he falls ill. Chances are that he is a migrant worker who has come from a far away state. If he is with his family in the city, then not only he but also his family have to go without any income, as he is probably the only or the main bread-earner in his household. And if he is without his family — and as we know there are tens of thousands of workers who work in big cities removed from their near and dear ones — then his plight is worse. For he has almost no one to turn to for care, for basic support, and a few words of comfort.

The sufferings of women workers in the unorganized sector are even more heartrending. They are more vulnerable in their jobs. They have to work not only at their workplaces, but also at home. They have much less access to healthcare and any kind of formal support system in society. Many employers even in the organized sector do not provide maternity benefits to women workers or crèches and other forms of childcare that they are legally required to provide. Their condition in the unorganized sector is worse.

The lack of a reliable social security system for them is not only their loss, it is also the loss of their employers and the nation, because their sickness and absenteeism has a direct effect on their productivity and hence on the financial bottomlines of their employers. If we keep the sufferings and requirements of these not-so-fortunate sisters and brothers in front of our eyes and think of what kind of a national policy on social security we should have, then we are certain to come up with the right ideas.

Your seminar should therefore focus on two aspects of the problem. First, how to improve the efficiency and output of the large existing infrastructure that ESIC has created in the past five decades. Many of you will agree that this infrastructure is substantially under-utilized in many places. It is also being mis-utilized in some places, although such instances are not commonplace. The quality of service in the ESIC hospitals often leaves much to be desired. This sometimes forces workers to seek medical care from expensive private practitioners despite having paid ESI contributions.

This situation must change. I am not an expert, so I cannot offer categorical solutions. But let me present some issues for debate in this seminar and during the golden jubilee year.

* On the healthcare side of social security, is it possible to bring about changes in the delivery mechanisms by making the administration of the healthcare infrastructure more accountable, more decentralized, more participative, and more cost-effective?

* Is it possible to build mutually beneficial linkages between ESI hospitals and other public and private hospitals in the neighborhood?

* And, how to make it possible for the ESI hospitals and dispensaries, when they are not being used by the members, to be used to provide healthcare to poor non-beneficiaries by charging them affordable rates?

Many of these non-beneficiaries will certainly be from the unorganized sector who would prefer an ESI hospital to expensive private hospitals. This way, the ESIC benefits by earning some extra money for maintenance and modernization, as well as the people in the neighborhood.

Similarly, I would like you to discuss how we can introduce greater flexibility in the provision of non-healthcare social security benefits to employees. In a vast country like India, where workers belong to different backgrounds and have different expectations of pre-retirement and post-retirement benefits, we cannot have a single system to cater to everybody’s needs. By introducing flexibilities in the employees’ ability to draw from their own savings and contributions, and helping them invest this amount in professionally managed funds of their choice, we may be able to achieve two important objectives. First, of stimulating non-state provision of social security. Second, of creating the possibility of a higher but secure returns to employees.

I have spoken about some options for the future as far as organized workers are concerned. However, a far greater challenge before us is to expand the social security net to cover tens, possibly hundreds, of millions of unorganized workers without putting too heavy a burden on our budgetary resources — which we do not have — and without creating opportunities for mis-utilization.

Let me start by emphasizing one basic truth: social security cannot mean, exclusively state-funded and state-administered security schemes. By its very nature, social security implies a strong and active participation of the non-state institutions in society, beginning with the family itself, but encompassing neighborhood organizations, community-based organizations, religious institutions, philanthropic bodies, and, of course, businesses in the private sector.

In India, long before state provision of social security began, these social institutions had been providing succor and emotional support to distressed people. The most reliable provider of social security is the family itself. As we all know, in those societies where family ties are weakening, the state has had to carry an increasing burden of social security. In contrast, in traditional societies families and biradaries have eased these burdens on the state.

Unfortunately, in our country too, urbanization has resulted in the weakening of the joint and extended family. We cannot follow the example of the West here. We should strengthen and activate all the non-state providers of social security. They can become an excellent interface between the vast unorganized sector on the one hand, and the state and other organized providers of social security. Here too, the state can play the role of a regulator and facilitator. For the poorest of the poor, the state can also contribute partly to various social security schemes, which may be run by government companies, private companies, and social organizations.

For example, we know that self-help groups, especially of women, can not only be commercially successful, but they can also provide maternity benefits, sickness and old age benefits, assistance for education of children, and help in the event of untimely deaths. Such close-knit groups deliver not only financial assistance, but more importantly, emotional support and care to those members who need it. Therefore, let us build on their intrinsic strengths and bring them into more formal social security schemes. For instance, such groups can become agents for specific schemes of institutions like the LIC or private insurance companies by being able to collect contributions on a regular and reliable basis and also be accountable for the delivery of benefits.

In all this, wherever needed the government can bring in necessary laws and regulations. However, I wish to emphasize that when we deal with the unorganized sector or for that matter, even the organized sector we should not rely exclusively on laws and bureaucracy as the sole enforcers of what is right and what is desirable. Let us not depend on inspectors to check if every last law and procedure has been adhered to or not. Let us rather energize the ability of social institutions to promote voluntary compliance and voluntary self-regulation with least government interference, especially when the government can, at best, provide minimal financial resources.

I am sure that many such social initiatives are already taking place in small and scattered ways across our large country. Let us compile and document and publicize these commendable efforts. Let us encourage their replication. Let us also create incentives and disincentives for large employers of unorganized workers — such as those in the construction and eating house sectors — to submit themselves to an independent, non-governmental assessment and rating of their contribution to the social security of their employees.

It is innovative thinking and bold measures like these — measures that trust society and its social organizations, rather than keep them at a distance —which are needed to achieve the gigantic task of improving the lot of millions and millions of our unorganized workers. I would very much like the participants of this seminar to come forward with practical suggestions and solutions.

And I would like the Labour Ministry to promote, during this Golden Jubilee year, the debate on this vital subject by organizing more such interactions in different cities. I am sure that the end of the year, we shall have a lot of ideas for a National Policy on Social Security, which our country so direly needs.

Thank you.