Labour

Is This Budget Really for Unorganised Sector Workers?

While Piyush Goyal's and Narendra Modi's speeches hailed new investments for the poor and the unorganised sector workers, the numbers in the budget tell a different story.

Although an interim budget, Budget 2019 – the last budget to be presented by the current government – included some big bang announcements giving an indication of what the BJP wants to go to the people with for the upcoming elections. This was expected.

There was wide-spread speculation that this budget would include an income transfer scheme for farmers in response to the sustained protests by farmers over the last two years. The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), that has been hailed by the prime minister in his speech as the ‘biggest scheme for farmers since Independence’, is a transfer of just Rs 6000 (in three instalments) to small and marginal farmers.

As many have already noted, this amount is too small and cannot be expected to make a dent on the farm crisis. Agriculture needs a more comprehensive package and such measures can only be seen as short-term and aimed at immediate electoral gains.

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Calling this a budget for a New India, prime minister Narendra Modi claimed that there is now attention paid to the unorganised labour force of about 40 crore people, who “haven’t ever received any help from previous governments”.

Pension policy

Generally, these benefits are considered to be essential for the social security of workers – old-age, healthcare and maternity benefits. For old age, the budget announced a ‘mega pension yojana’ called the ‘Pradhan Mantri Shram-Yogi Mandhan’ which will provide an assured monthly pension of Rs 3,000 from the age of 60 years onwards.

It must be recognised that this scheme isn’t very different from the Atal Pension Yojana which was launched in 2015 and didn’t do all that well).

Secondly, this is a contributory scheme and getting benefits from this scheme depends on people working currently in the unorganised sector who earn less than Rs 15,000 a month to subscribe for the scheme and make a monthly contribution of around Rs 55 or more – depending on their age.

It also does not aim to cover the entire informal sector but 10 crore labourers – that too only over the next five years. Many will not be included in this scheme.

More so, the amount of assured pension of Rs 3,000 is very little. Take for example, a 29-year-old enrolling into the scheme today – she would have to pay Rs 100 per month for the next 30 years and only when she is 60 will she start getting a pension of Rs 3,000 a month. The value of Rs 3,000 at the end of 30 years would be only around Rs 700, assuming a reasonable inflation rate of 5% per annum on average.

This could hardly be considered ‘social security’. This person might actually be better off investing in a recurring deposit plan with an interest rate of 8% (as in PF account).

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On the other hand, the funds for the national old age pension scheme have actually declined from Rs 6,564.58 crore in the budget estimate last year to Rs 6,259.08 crore in 2019-20. This scheme covers old people who have toiled in the informal sector most of their lives, and the contribution of the central government is currently only Rs 200 a month.

A number of state governments top this up with their own contributions. Even this small amount has made a world of difference to the lives of old people across the country. If the government had any serious commitment to social security in old age, it is this scheme that should have been expanded and strengthened. The demand of movements like the Pension Parishad is for a pension of at least Rs 2,000 per month in current prices, to make it more meaningful.

Healthcare shortchanged yet again

The second aspect of social security for workers, healthcare, has also been shortchanged once again this year. While it is true that the allocations for the Pradhan Mantri Jan Arogya Yojana (PMJAY) have gone up by almost 2.5 times from Rs 2,400 crore to Rs 6,400 crore, concerns regarding following an insurance-based strategy (that too covering only hospitalisation expenses) have been raised a number of times.

There are serious doubts on whether such a strategy could reduce the burden of out-of-pocket expenditure on health for households, and also a worry that this is too expensive and will have escalating costs. On the other hand, the National Health Mission, which focusses on provision of primary health care and strengthening the public health system, saw hardly any increase in its budget – from Rs 31,187.48 crore in 2018 to Rs 32,251 crore – a decline in real terms.

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Maternity benefits and food security

Finally, with regard to maternity benefits as well, there is nothing in this budget that takes the country towards providing universal maternity entitlements or towards increasing the coverage of maternity benefits to women in the unorganised sector.

The Maternity Benefits Act covers only women in the organised sector. The maternity benefits scheme that is available for all women is the Pradhan Mantri Matru Vandana Yojana (PMMVY) which currently gives Rs 5,000 to women for their first birth. This scheme is supposed to deliver the entitlement of at least Rs 6,000 for all pregnant and lactating women, as included in the National Food Security Act (NFSA).

This scheme is also very inadequate as the benefits aren’t much and are not linked to wages. It also leaves out more than half the births in the country, which are of second or a higher order. The revised budget for this scheme for 2018-19 was halved from the initial allocation of Rs 2,400 crore to Rs 1,200 crore showing its poor implementation and coverage. This year the budget allocation is Rs 2,500 crore, which almost the same as the budget for last year.

A letter written to the finance minister before this budget (and also the last) by 60 economists recommended that the full-fledged implementation of this scheme requires Rs 8,000 crore in the Union budget. Therefore, one cannot expect any increase in coverage or amount this year as well in terms of maternity benefits for women in the informal sector.

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While the finance minister’s budget speech, and the speech by the prime minister that followed, were both filled with rhetoric about the new investments for the poor and the unorganised sector workers, the numbers in the budget show that the government has once again failed to put its money where its mouth is.

Considering that this is an interim budget, and is more of an indication of things to come should the BJP come back to power, it does not give much hope for the social security of unorganised sector workers in the country.

Dipa Sinha teaches at Ambedkar University Delhi.