Tackling Social Insecurity

social securityThe most challenging job for the UPA II is to provide social security to all the needy citizens. Unemployment, poverty, and health are the most pressing issues. It is to the concerned ministers to chart out timely actions to minimise the problems in the social front. The Times of India reports (28 June 2009) Unemployment is death by a thousand cuts. Life itself is dependent on gainful work. That is why losing one’s job is the beginning of a downward spiral — poverty, indebtedness, disease and suffering follow in quick succession. The current economic turmoil has caused mass unemployment around the world. In 2008, just over 190 million people or 6% of the global workforce were unemployed. The economic downturn had only just begun. By February this year, unemployment in the US stood at 12.5 million with the economy shedding up to 600,000 jobs every month. By April, unemployment in OECD countries — the world’s 30 richest — had topped 37 million. India has also been affected, though not quite so badly. According to a sample survey by the labour ministry, about five lakh Indian jobs were lost in the last quarter of 2008. Unemployment is often seen as an involuntary occurrence. People lose their jobs because of events beyond their control — economic downturns, disease, disability, or, in the case of women, social prejudice. Sometimes, people are unemployable. That is why there is a need for a collective remedy, a system that can help tide people through the dark days of joblessness. More than 60 countries worldwide provide some form of unemployment insurance. It is part of a larger social welfare commitment, which includes retirement and old age pension, sickness and maternity benefits. Often, affordable housing and education are part of the package. It is not just advanced economies that provide social welfare, though the richer countries have the most comprehensive systems. Several South American and African countries also offer their people some form of social welfare. In the past two decades, governments have retreated from social welfare spending, making the transition from ‘insurance’ to ‘assistance’. But industrialized countries still spend anything between 15% and 30% of their GDP on social security such as unemployment benefit, pension and healthcare. Yet India, one of the more advanced developing countries, barely manages to spend about 1% of its GDP on social services. Guy Standing, professor of economic security at the University of Bath in Britain, says India has one of the world’s lowest levels of social welfare expenditure and even that is mostly wasted. “What is perhaps most worrying in India is that politicians use social protection schemes cynically to boost their political prospects, so that they can show discretionary benevolence, particularly just before elections,” he told TOI. The need for social security is greater in the developing world than in the developed. The developing world’s concept of social security needs to be expanded — it has to include the aim of eliminating mass poverty, ill-health and illiteracy because without this social security cannot exist. In India, there are additional obstacles, such as caste discrimination. Given the scale of these problems, social welfare spending is at a rudimentary level in most developing countries including India. Although the law recognizes various rights, such as livelihood, these are not enforceable. In a belated attempt to rectify this, the National Rural Employment Guarantee Act was adopted in 2006 but it only provides for a maximum of 100 days of manual labour in a year at the minimum wage. Perhaps a fatal flaw in India’s social security framework is that it only covers the organized sector, which accounts for just 8% of the workforce. The vast majority of Indian workers are in the unorganized sector. Some half-hearted attempts were made to bring them under some sort of social security coverage by passing a law in December. For India to progress, policy has to be boldly refocused on providing social security, including a safety net for when one loses one’s job. As Guy Standing puts it, “We have found in Africa that when you provide low-income people with a little money without conditions, they mostly spend it in the best interests of their families and communities. They do not need to be told or led to do what state bureaucrats think The most challenging job for the UPA II is to provide social security to all the needy citizens. Unemployment, poverty, and health are the most pressing issues. It is to the concerned ministers to chart out timely actions to minimise the problems in the social front. The Times of India reports (28 June 2009) Unemployment is death by a thousand cuts. Life itself is dependent on gainful work. That is why losing one’s job is the beginning of a downward spiral — poverty, indebtedness, disease and suffering follow in quick succession. The current economic turmoil has caused mass unemployment around the world. In 2008, just over 190 million people or 6% of the global workforce were unemployed. The economic downturn had only just begun. By February this year, unemployment in the US stood at 12.5 million with the economy shedding up to 600,000 jobs every month. By April, unemployment in OECD countries — the world’s 30 richest — had topped 37 million. India has also been affected, though not quite so badly. According to a sample survey by the labour ministry, about five lakh Indian jobs were lost in the last quarter of 2008. Unemployment is often seen as an involuntary occurrence. People lose their jobs because of events beyond their control — economic downturns, disease, disability, or, in the case of women, social prejudice. Sometimes, people are unemployable. That is why there is a need for a collective remedy, a system that can help tide people through the dark days of joblessness. More than 60 countries worldwide provide some form of unemployment insurance. It is part of a larger social welfare commitment, which includes retirement and old age pension, sickness and maternity benefits. Often, affordable housing and education are part of the package. It is not just advanced economies that provide social welfare, though the richer countries have the most comprehensive systems. Several South American and African countries also offer their people some form of social welfare. In the past two decades, governments have retreated from social welfare spending, making the transition from ‘insurance’ to ‘assistance’. But industrialized countries still spend anything between 15% and 30% of their GDP on social security such as unemployment benefit, pension and healthcare. Yet India, one of the more advanced developing countries, barely manages to spend about 1% of its GDP on social services. Guy Standing, professor of economic security at the University of Bath in Britain, says India has one of the world’s lowest levels of social welfare expenditure and even that is mostly wasted. “What is perhaps most worrying in India is that politicians use social protection schemes cynically to boost their political prospects, so that they can show discretionary benevolence, particularly just before elections,” he told TOI. The need for social security is greater in the developing world than in the developed. The developing world’s concept of social security needs to be expanded — it has to include the aim of eliminating mass poverty, ill-health and illiteracy because without this social security cannot exist. In India, there are additional obstacles, such as caste discrimination. Given the scale of these problems, social welfare spending is at a rudimentary level in most developing countries including India. Although the law recognizes various rights, such as livelihood, these are not enforceable. In a belated attempt to rectify this, the National Rural Employment Guarantee Act was adopted in 2006 but it only provides for a maximum of 100 days of manual labour in a year at the minimum wage. Perhaps a fatal flaw in India’s social security framework is that it only covers the organized sector, which accounts for just 8% of the workforce. The vast majority of Indian workers are in the unorganized sector. Some half-hearted attempts were made to bring them under some sort of social security coverage by passing a law in December. For India to progress, policy has to be boldly refocused on providing social security, including a safety net for when one loses one’s job. As Guy Standing puts it, “We have found in Africa that when you provide low-income people with a little money without conditions, they mostly spend it in the best interests of their families and communities. They do not need to be told or led to do what state bureaucrats think is what they should do. If India is really to escape from its caste-drThe most challenging job for the UPA II is to provide social security to all the needy citizens. Unemployment, poverty, and health are the most pressing issues. It is to the concerned ministers to chart out timely actions to minimise the problems in the social front. The Times of India reports (28 June 2009) Unemployment is death by a thousand cuts. Life itself is dependent on gainful work. That is why losing one’s job is the beginning of a downward spiral — poverty, indebtedness, disease and suffering follow in quick succession. The current economic turmoil has caused mass unemployment around the world. In 2008, just over 190 million people or 6% of the global workforce were unemployed. The economic downturn had only just begun. By February this year, unemployment in the US stood at 12.5 million with the economy shedding up to 600,000 jobs every month. By April, unemployment in OECD countries — the world’s 30 richest — had topped 37 million. India has also been affected, though not quite so badly. According to a sample survey by the labour ministry, about five lakh Indian jobs were lost in the last quarter of 2008. Unemployment is often seen as an involuntary occurrence. People lose their jobs because of events beyond their control — economic downturns, disease, disability, or, in the case of women, social prejudice. Sometimes, people are unemployable. That is why there is a need for a collective remedy, a system that can help tide people through the dark days of joblessness. More than 60 countries worldwide provide some form of unemployment insurance. It is part of a larger social welfare commitment, which includes retirement and old age pension, sickness and maternity benefits. Often, affordable housing and education are part of the package. It is not just advanced economies that provide social welfare, though the richer countries have the most comprehensive systems. Several South American and African countries also offer their people some form of social welfare. In the past two decades, governments have retreated from social welfare spending, making the transition from ‘insurance’ to ‘assistance’. But industrialized countries still spend anything between 15% and 30% of their GDP on social security such as unemployment benefit, pension and healthcare. Yet India, one of the more advanced developing countries, barely manages to spend about 1% of its GDP on social services. Guy Standing, professor of economic security at the University of Bath in Britain, says India has one of the world’s lowest levels of social welfare expenditure and even that is mostly wasted. “What is perhaps most worrying in India is that politicians use social protection schemes cynically to boost their political prospects, so that they can show discretionary benevolence, particularly just before elections,” he told TOI. The need for social security is greater in the developing world than in the developed. The developing world’s concept of social security needs to be expanded — it has to include the aim of eliminating mass poverty, ill-health and illiteracy because without this social security cannot exist. In India, there are additional obstacles, such as caste discrimination. Given the scale of these problems, social welfare spending is at a rudimentary level in most developing countries including India. Although the law recognizes various rights, such as livelihood, these are not enforceable. In a belated attempt to rectify this, the National Rural Employment Guarantee Act was adopted in 2006 but it only provides for a maximum of 100 days of manual labour in a year at the minimum wage. Perhaps a fatal flaw in India’s social security framework is that it only covers the organized sector, which accounts for just 8% of the workforce. The vast majority of Indian workers are in the unorganized sector. Some half-hearted attempts were made to bring them under some sort of social security coverage by passing a law in December. For India to progress, policy has to be boldly refocused on providing social security, including a safety net for when one loses one’s job. As Guy Standing puts it, “We have found in Africa that when you provide low-income people with a little money without conditions, they mostly spend it in the best interests of their families and communities. They do not need to be told or led to do what state bureaucrats think is what they should do. If India is really to escape from its caste-driven and Raj-affected past, it must loosen up.” iven and Raj-affected past, it must loosen up.” is what they should do. If India is really to escape from its caste-driven and Raj-affected past, it must loosen up.”

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