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Tuesday 28 December 2010

Social Security System

The International Labour Organisation (ILO) defines Social Security as "the security that society furnishes through appropriate organisation against certain risks to which its members are perennially exposed. These risks are essentially contingencies against which an individual of small means cannot effectively provide by his own ability or foresight alone or even in private combination with his fellows.
The mechanics of social security therefore consists in counteracting the blind injustice of nature and economic activities by rational planned justice with a touch of benevolence to temper it." This definition of ILO clears and centres on provision of support to an individual or to his/her family to protecting them falling into contingent poverty which is that the individual is not otherwise poor but for the contingency. These contingencies as per ILO are sickness, medical care for the worker, maternity, unemployment, work injury, death of worker, invalidity and widowhood.

The contingencies however are the work related contingencies and the individual and his family will be protected only in the case the individual is working before becoming a subject of the contingency. Thus being employed is a precondition for becoming eligible for social security benefits. Ironically, this definition does not cover the protection that has to be provided for the people who are already poor and therefore the Social Assistance programmes cover them.
Purpose and Contingencies of Social Security
The purpose of any social security measure is to give individuals and families the confidence that their level of living and quality of life will not erode by social or economic eventuality; provide medical care and income security against the consequences of defined contingencies; facilitate the victims physical and vocational rehabilitation; prevent or reduce ill health and accidents in the occupations; protect against unemployment by maintenance and promotion of job creation and provide benefit for the maintenance of any children.
The contingencies of social security as delineated by ILO are medical care, sickness benefit, unemployment benefit, old age benefit, employment injury benefit, family benefit, maternity benefit, invalidity benefit and survivors benefit.
Social Security Strategy in India
The social security strategies include the following:
· Social insurance with the participation of the beneficiary pooling risks and resources
· Social assistance financed from general revenues and granting benefits on the basis of means test
· Employers liability schemes where there is an identifiable employer and within the economic capacity of the employer
· National Provident Funds
· Universal schemes for social security.
Social Security in India
Article 43 of the Constitution speaks of state's responsibility to provide social security to the citizens of this country. In India, we find all the above strategies in practice. For the purpose of discussion, we may categorize the social security schemes available in India as Preventive Schemes, Promotional Schemes, and Protective Schemes.
Preventive Schemes
Preventive Schemes are the Schemes aimed at risk prevention. In the strategy of social management of risks, preventive approach tries to prevent poverty and helps people under below poverty line to come above poverty line. Preventive health care, vaccinations against diseases forms part of he preventive strategies. Majority of the schemes are of social assistance in nature.
Promotional Schemes
Promotional social security schemes are mainly of Means tested Social Assistance type, where to guarantee minimum standards of living to vulnerable groups of population, the Governments at the State and Centre draft schemes financed from the general revenues of the Government.
Protective Social Security Programmes
The protective social security programmes help the poor in removing / reducing contingent poverty. In India, the protective social security programmes have been designed to address the contingent poverty or the contingencies d defined by the ILO. These programmes take care of old-age income needs (Old age pension), survival benefits (Provident Funds), medical need of insured families (Medical Insurance), widow and children / dependant economic needs (Widow / Children / orphan, and dependent pension), maternity benefits, compensation for loss of employment and work injury benefits.
The benefits are extended only to working population majority of whom who are in the organized sector through legislations like:
·   Employees State Insurance Act 1948
·   Employees Provident Fund and Miscellaneous Provisions Act 1952

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