Ever since Santosh Kumar Gangwar, the Government of India’s Minister of Labor and Employment, proposed the Social Security Code Bill in the Lok Sabha on 11th of December 2019, there has been buzz among India’s working class and economists regarding the impact this bill brings to the country’s economy. Since the bill is going to be of the essence for a majority of Indians, it becomes the responsibility of every one of us to understand it carefully.
Universalization of Social Security
The government of India is aiming at the universalization of social security for over 50 crore workers. As per the proposed bill, the government will set up a social security fund from the amount came from Corporate Social Responsibility. Citizens, mainly employees, will be benefited from this fund in the form of pension, medical assistance, disablement and death welfare schemes. One of the high points of this bill is that it covers the gig workers as well.
A step towards bettering the country’s economy
Indian economy’s below standard performance in the last couple of years is no more a secret. The union government knows it well and thus, brought the social security code bill, 2019 that will allow (optional) lakhs of employees to bring down their PF contribution, increasing the amount they take back home. The hypothesis behind this lower provident fund contribution is that the more take-home pay will allow them to consume more, assisting the overall economy of the country.
However, it is worth noting that the bill retains the EPF at 12%.
Favoring the employees
The labor ministry’s bill is being regarded as friendly towards employees by people in the government as well as a number of economists in the country. The contract workers will also be eligible for financial rewards on proportional basis. The social security bill covers as many as eight labor laws in the country including Employees’ State Insurance Act, 1948, Maternity Benefit Act, 1961, and Building and Other Construction Workers Cess Act, 1996.
Amidst the current economic downturn, this move is expected to act like a catalyst. Once the Lok Sabha and Rajya Sabha pass this bill, the law will start functioning in the service of the public.