The UPA’s focus on safety nets are welcome in a country where, until now, governments have failed to carry the poor with them. So far most labour-related schemes of the government have focussed on the organised sector workers. This labour aristocracy — constituting merely 7 per cent of the work force — is organised into trade unions and has political support not only among the Left parties but among all political parties as they all have trade union wings. A fresh focus on unorganised sector workers is, therefore, a step in the right direction.Moreover, the move towards market and reforms can be made smoother if there is less social discontent and political strife arising out of wider disparities. The report and draft bill prepared by the National Commission for Enterprises in the Unorganised Sector (NCEUS) seeks to fulfil the Common Minimum Programme’s promise of providing health, insurance and pensions to unorganised sector workers. It is expected to be the largest such programme in the world, covering 300 million workers. This ambitious attempt by the UPA to provide a safety net for the poor follows the National Rural Employment Guarantee Act — again one of the biggest poverty eradication programmes in the world. It seeks to create an environment of growth with a human face.No doubt, the intentions of the Arjun Sengupta Committee, which has prepared the report, were noble. But is the design of the scheme proposed one that can be efficiently administered? Is it sustainable? Even if it is implementable and sustainable, can it deliver? There are multiple snarls. The scheme bundles health, insurance and old-age security together. It does not give options to workers to contribute more and obtain greater benefits than what is proposed. Further, the fiscal costs of the scheme are so high that, in coming years, it could become unsustainable and India will face problems similar to those seen in European welfare states. The UPA needs to go back to the drawing board, get the insights of experts on health, insurance and pensions into the plan, and move towards its implementation in a professional manner.
