Budget 2024: India likely to announce social security fund for informal workers

Union Budget 2024: India could announce a social security fund for the labourforce in the unorganised sector as well as gig and platform workers in the interim budget to be presented by finance minister Nirmala Sitharaman on February 1.

The fund, proposed in the Social Security Code, 2020, would be a step toward universal social security for workers. The code, which is not yet rolled out because all the states have not framed rules, allows partial implementation of certain provisions.

The government has already collated data of over 293.3 million unorganised workers through the e-Shram portal, launched in August 2021, which is verified and seeded with Aadhaar.

This will allow the Centre to roll out benefits to these workers quickly.
The broad plan is to subsume the existing social security schemes – old age, pension, provident fund, health, housing and education – under one umbrella and reroute the benefits through the Social Security Fund, a senior government official told ET.

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“This will mean there will be no additional fiscal burden on the government at the beginning,” the official added. “However, all future social welfare schemes will be routed through the fund which will see additional allocation by the Centre.” The Social Security Code provides for establishing and maintaining a separate account for financing benefits through the Social Security Fund.The new schemes could either be entirely funded by the Centre, partly funded by the Centre and the states or have contributions from employees as well as employers or partly funded by the aggregators, in the case of gig and platform workers, as the case may be.

Monetary penalties levied for violations of the code relating to the central government, corporate social responsibility (CSR) contributions, and the cess collected under existing labour laws would also flow to the fund, which would lessen the fiscal impact.

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