This is great news, as long as the program is well administered and transparent (usual caveat that accompanies any new policy announced by the Indian government).
The Indian government has announced an ambitious social security scheme which is aimed at benefiting about 390 million poor, non-unionised workers. Once passed by parliament, the scheme will provide the workers with life insurance and disability protection.
Under the new scheme, the non-unionised, casual worker will be entitled to life insurance and health and disability benefits by contributing just one rupee (one cent) a day.
The government says it wants to help the under-privileged
The government and employers will also contribute an equal amount. Those earning less than 6,500 rupees ($160) annually will be designated as living below the poverty line, and their one-rupee share will be paid for by the federal government.
It is estimated that the government will need $22.2bn to implement the scheme.
Assuming a purchasing power exchange rate of approximately 14 for India (year 2000 value), this poverty rate works out to approximatey $1.25 per day, a little more generous than the world bank’s dollar a day PPP adjusted figure, but not really. I would guess that the poor would need a little more help, but it is a start, and a good first attempt to get some kind of safety net for most of the Indian workforce.