India plans welfare programme for poor India plans welfare programme for poor

India plans welfare programme for poor
03 Jul 2018

Prime Minister Narendra Modi is set to extend a welfare programme to India’s 500 million workers but has limited time and resources in which to implement it.

The scheme will initially include the provision of an old age pension, life insurance and maternity benefits, but will leave out unemployment, child support and other benefits. Most working citizens should gain, government officials told the Times of India.

A draft Bill would extend benefits to all workers, including those in informal employment, by merging and simplifying 15 central labour laws into one. Union labour minister Santosh Gangwar told Bloomberg News that the aim was to present the Bill in July in the upcoming session of Parliament.

The initiative follows the announcement of a health protection plan covering 100 million poor families, dubbed 'Modicare', which was announced earlier this year. It will be piloted in six districts in the months leading up to the general election which is scheduled for May next year, officials said.

Satish Misra, a political analyst at the Observer Research Foundation in New Delhi, stated: "Nobody can deny the importance of social security for the country's working class and it is overdue. But the timing suggests it's political in nature, and Modi wants to push it in a hurry so that in the election campaign he can claim it's a game changer for poor."

Providing minimum social security for the lower half of the working class, who make up about a fifth of the country's population, would cost the government 0.38% of GDP, or about Rs500 billion ($US$7.4 billion) a year, said Santosh Mehrotra, an economics professor at Jawaharlal Nehru University.

A panel is expected to recommend that benefits are paid at a rate that is above the poverty line at Rs27 rupees (40 cents) a day in rural areas and Rs33 rupees (49 cents) in urban areas.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

Prime Minister Narendra Modi is set to extend a welfare programme to India’s 500 million workers but has limited time and resources in which to implement it.

The scheme will initially include the provision of an old age pension, life insurance and maternity benefits, but will leave out unemployment, child support and other benefits. Most working citizens should gain, government officials told the Times of India.

A draft Bill would extend benefits to all workers, including those in informal employment, by merging and simplifying 15 central labour laws into one. Union labour minister Santosh Gangwar told Bloomberg News that the aim was to present the Bill in July in the upcoming session of Parliament.

The initiative follows the announcement of a health protection plan covering 100 million poor families, dubbed 'Modicare', which was announced earlier this year. It will be piloted in six districts in the months leading up to the general election which is scheduled for May next year, officials said.

Satish Misra, a political analyst at the Observer Research Foundation in New Delhi, stated: "Nobody can deny the importance of social security for the country's working class and it is overdue. But the timing suggests it's political in nature, and Modi wants to push it in a hurry so that in the election campaign he can claim it's a game changer for poor."

Providing minimum social security for the lower half of the working class, who make up about a fifth of the country's population, would cost the government 0.38% of GDP, or about Rs500 billion ($US$7.4 billion) a year, said Santosh Mehrotra, an economics professor at Jawaharlal Nehru University.

A panel is expected to recommend that benefits are paid at a rate that is above the poverty line at Rs27 rupees (40 cents) a day in rural areas and Rs33 rupees (49 cents) in urban areas.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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