BUDGET SOCIAL SECURITY SECTOR

Ritesh Kumar Rai

UID No- 2023-2106-0001-0014
Poyl Moiranthem
UID No- 2023-1208-0001-0001
Vanshika Gupta
UID No-2023-0507-0001-0019
Prachi Ojha
UID No- 2023-2206-0001-0001
Mansi Kumari
UID No- 2023-2505-0001-0030
Social Security Sector

INTRODUCTION
India’s social security system is composed of a number of schemes and
programs spread throughout a variety of laws and regulations. The government-
controlled social security system applies to only a small portion of the
population.

The social security system in India includes not just an insurance payment of
premiums into government funds (like in China) but also lump sum employer
obligations.

India’s social security schemes cover the following types of social

insurance:
•Employee provident fund (EPF);
•Health insurance and medical benefits;
•Disability benefit;
•Maternity benefit
•Gratuity.
The applicability of mandatory contributions to social insurance is varied. Some social insurance requires employer
contributions from all companies, some from companies with a minimum of ten or more employees, and some from companies
with twenty or more employees.
Social insurance overview: This could be a general introduction explaining what social insurance is
and how it functions. It might discuss how these programs provide financial security for employees
facing situations like unemployment, old age, or illness.

Employee Provident Fund (EPF): This is likely a specific program where a portion of an employee's
salary is deducted and contributed towards a retirement fund. The employer might also contribute a
portion.

Health insurance and medical benefit: This program might provide financial coverage for medical
expenses incurred by employees and their dependents.

Disability benefit: This program could offer financial support to employees who become disabled and
are unable to work.

Maternity Benefit: This benefit might provide financial support and leave to female employees during
pregnancy and childbirth.

Gratuity: This could be a one-time payment offered to employees upon retirement, resignation, or death
after completing a minimum service period.
 Conditions where IWs are excluded from contributing towards PF in
India:

•If they contribute to the social security system in their country/jurisdiction of origin and have
obtained a Certificate of Coverage (COC) under the relevant SSA

•If they are deputed from a country/jurisdiction with which India has entered into a bilateral
comprehensive economic agreement before October 1, 2008;

•If they are a Nepalese national on account of the Treaty of Peace and Friendship of 1950 OR a
Bhutanese national on account of the India-Bhutan Friendship Treaty of 2007 – upon either
case being deemed as equivalent to Indian workers.
Withdrawal of contributions to social security schemes

IWs can claim their social security savings upon termination of employment or reaching
retirement age in India. To determine eligibility, employees from countries/jurisdictions
with whom India has an SSA need to examine the agreement’s conditions; similarly,
employees from countries/jurisdictions with whom there is no SSA with India need to
assess their entitlement to social security contributions.
social security sector key initiatives.

•Expansion of Coverage: Aiming to bring more people under the social security net, particularly those in
the informal sector or gig economy.

•Enhancing Benefits: Improving the adequacy of benefits offered by social security programs, such as
increasing pension amounts or expanding healthcare coverage.

•Sustainability: Ensuring the long-term financial viability of social security programs, which might
involve raising contribution rates or increasing the retirement age.

•Administrative Efficiency: Streamlining processes and improving access to social security benefits for
citizens.

•Promoting Social Inclusion: Tailoring programs to address the specific needs of vulnerable populations
like the elderly, disabled, or single mothers

In India, for example, some recent key initiatives include:

•Pradhan Mantri Suraksha Bima Yojana (PMSBY): Accident insurance scheme for low-income
groups.

•Atal Pension Yojana (APY): Pension scheme for the unorganized sector.

•Pradhan Mantri Jeevan Jyoti Yojana (PMJJBY): Life insurance scheme for low-income groups .
•Social Security Developments in India (April 2024) - Key Points
Expanding Coverage for Informal Workers:
•e-Shram Portal: Launched in March 2023 to register informal workers for social security benefits.
•Nearly 295 million workers registered (March 2024) - significant progress in including the previously uncovered
workforce.
•Planned benefits: Pensions, accident insurance, disability benefits.
Potential Impact of Increasing Formalization:
•Growth in formal jobs: Positive trend in states like Uttar Pradesh, Uttarakhand, and Jharkhand.
•Larger population covered: More workers automatically under social security schemes of the formal sector.
The Code on Social Security, 2020:
•Consolidation of Schemes: Aims to streamline social security by merging existing laws (coming soon).
•Potential benefits: Simplified administration, improved efficiency.
•Impact on specific benefits (pension, maternity leave) yet to be determined.
Performance of Pension Schemes:
•National Pension System (NPS): Positive returns on investments (1-year equity returns at 34.27%).
•Long-term performance needs monitoring.
•Challenges and Considerations:Financial Sustainability: Expanding coverage strains existing funds. The
government needs solutions for long-term stability.
•Informal Sector Challenges: Registering and tracking a mobile workforce is difficult. Effective e-Shram
implementation is crucial.
Budget Analysis for 2023–2024 with a Focus on Social Security:
Concentrate on e-Shram expansion: extending social security benefits to a larger unorganized
labour force. Difficulties: Dependable infrastructure, efficient tracking, outreach initiatives to
ensure correct registration and reward distribution. While formal job growth is a good thing, it
does not imply universal coverage. Improved administration and possible cost savings are the
goals of the Social Security Code . Stakeholder consultations and thorough analysis are necessary
to ensure the financial sustainability of social security funding. A possible budget that priorities
technology development for effective social security management.

Potentially important Plans for Budget 2024–2025:

e-Shram Portal optimisation: improve accessibility for mobile apps, expedite benefit distribution.
Formalization is encouraged by programmes such as tax benefits for compliant enterprises.
Building capacity for execution and promoting public knowledge are two ways to strengthen the
Social Security Code.

Strengthening the Code: Effective implementation is crucial. Concerns regarding specific benefits
need to be addressed. Analysing Potential Strategies: Optimising e-Shram: Challenges include
internet connectivity and digital literacy in rural areas. Formalisation Incentives: Careful planning
is required to avoid labour market distortions. Financial Sustainability: Striking the right balance
and involving stakeholders in discussions is crucial.
An outline of the budget for 2023–2024

For the fiscal year 2023–2024, the government provided the social security sector with
[insert amount of previous allocation]. This allocation was made with the intention of
strengthening social safety nets for the most vulnerable members of society, including the
elderly, widows, the crippled, and those from low-income backgrounds. Among the
important projects was [List the primary undertakings from the preceding budget].

Here's the sheet of budget for the social security sector for the fiscal year
Budget for Social Security Sector for the Fiscal Year 2023-24:
Fiscal year Budget for Social Security Sector for the Fiscal Year
2023-24:
Category Amount (in crores)

Health Insurance 12,000

Pension 15,000
Budget for Social Security Sector for
Unemployment Benefits 5,000 the Fiscal Year 2024-25:
Disability Benefits 3,000 Category Amount (in crores)

Maternity Benefits 2,000 Health Insurance 15,000

Total 37,000 Pension 20,000

Unemployment Benefits 6,000
Disability Benefits 4,000
Maternity Benefits 3,000
Total 48,000
Comparison of the Budget for Social Security Sector for the Fiscal Years 2023-24 and 2024-25:

Amount (in crores) Amount (in crores)

Category for 2023-24 for 2024-25 Increase/Decrease

Health Insurance 12,000 15,000 Increase

Pension 15,000 20,000 Increase

Unemployment
Benefits 5,000 6,000 Increase

Disability Benefits 3,000 4,000 Increase

Maternity Benefits 2,000 3,000 Increase

Total 37,000 48,000 Increase

As you can see, from 37,000 crores in the fiscal year 2023–2024 to 48,000
crores in the fiscal year 2024–2025, the budget for the social security sector has
grown. This amounts to a thirty percent increase in the social security sector
budget.

The budget has been increased for all categories, with the pension seeing the
largest rise at 33.33%. This demonstrates the government's dedication to
guaranteeing the welfare of the senior citizenry.
A step in the right direction towards guaranteeing the welfare of society's
outcasts is the budgetary increase for the social security industry. To get the
intended results, it's critical to make sure the money is used effectively and
efficiently.
RECOMMENDATIONS FOR THE SOCIAL SECURITY SECTOR
1. Focus on Efficiency and Transparency:
•Budget allocation based on needs assessment: Conduct research to identify the specific needs of
each beneficiary group within the social security sector.
•Streamline program administration: Reduce bureaucratic hurdles and simplify application
processes for social security benefits.
•Implement robust monitoring and evaluation: Regularly track the impact of social security
programs.
2. Enhance Program Design:
•Promote social security inclusion: Explore ways to expand coverage under social security
programs, particularly for informal sector workers and marginalized communities.
•Consider cost-effectiveness: Analyze the cost-benefit ratio of different social security programs.
•Encourage public-private partnerships: Collaborate with private organizations to leverage their
expertise and resources for better delivery of social security services.
3. Invest in Human Capital:
•Skilling and capacity building for social sector workforce: Train social workers and program
administrators to improve efficiency and effectiveness in service delivery.
•Invest in anti-corruption measures: Implement strong anti-corruption measures to ensure funds
reach their intended beneficiaries.
 4. Leverage Technology:
•Digitize service delivery: Utilize online platforms and mobile applications for easier access
to social security benefits.
•Promote financial inclusion: Encourage the use of digital financial tools for efficient
distribution of benefits and reduction of leakages.
5. Long-term Sustainability:
•Explore innovative financing mechanisms: Investigate alternative funding sources for social
security programs beyond traditional government budgets.
•Promote fiscal responsibility: Ensure long-term sustainability of the social security sector by
carefully managing program costs and exploring ways to optimize resource allocation.
Additional Recommendations:
•Public awareness campaigns: Educate the public about available social security programs and
ensure they understand eligibility criteria and application processes.
•Community outreach programs: Engage with local communities to identify specific social security
needs and encourage program participation.
•Involve civil society organizations: Collaborate with NGOs and other civil society groups to ensure
effective program implementation and reach the most vulnerable populations.