Unorganised Sector Worker’s Social Security Bill, 2007, India (Guidelines)

Unorganised Sector Worker’s Social Security Bill, 2007, India!

In 2007, the Government of India introduced a bill in Parliament called the Unorganised Sector Workers’ Social Security Bill.

This bill was passed in the winter session of Parliament, which was the last session before the five-year term of the UPA government ended; receiving the President’s assent on 30 December 2008 (the UPA was subsequently re-elected for another five years).

When the UPA came into power it had promised a comprehensive legislation on the working conditions of the informal/unorganised sector workers to cover, inter alia, working conditions that include hours of work (eight hours per day) and other amenities such as holidays and annual leave with pay; this part was unfortunately dropped. What we have now is a bill relating to social protection. In the following paragraphs, we shall summarise the main contents of the bill.


The bill defined an unorganised (informal) sector worker as a home-based worker, self-employed worker or a worker in the sector (section 2(1)). The unorganised sector (section 2(k)) refers to an enterprise, employing less than ten workers, owned by individuals or self-employed workers engaged in production or sale of goods or providing any kind of service.

The bill mentioned that the central government may formulate suitable welfare schemes for different sections of these workers. Such schemes included insurance cover for life, and in case of disability, health and maternity benefits, old age protection or any other.

In addition, the bill noted that the state governments could formulate and notify welfare schemes for different sections of these workers which could include: provident fund, employment injury benefit, housing, educational schemes for children, skill up-gradation of workers, funeral assistance and old-age homes.

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It may be mentioned here that provident fund and employment injury benefit are available for workers in the formal sector who come under the Factories Act, Provident Fund and Family Pension Act, and the Workmen’s Compensation Act, which are in operation in workplaces where the Factories Act has been enforced. Hence, workers in the small-scale sector (units employing less than ten workers) do not come under these Acts.

The Unorganised Sector Workers’ Bill noted that state governments could bring the informal sector workers under these Acts. Another important point was that (section IV (1)) schemes notified by the Central government might be wholly funded by it or jointly funded by the Central and state governments or it could be funded by both the governments along with other contributions collected from the beneficiaries or employers.

The operation of the Act would be through the National Security Advisory Board for workers in the unorganised sector.The central government would form this board which would have 33 members including a chairperson appointed by the Central government and the director general-labour welfare as the ex-officio member secretary.

The remaining 31 would include seven representatives each of following categories: unorganised sector workers, employers of unorganised sector, and eminent persons from the civil society. In addition, there would be five representatives of the state government and five of the Central government. At the state level, there would be a state social security advisory board for workers in the unorganised sector.


The total membership would be 28, with a chairperson appointed by the state government and secretary-labour who would be the ex-officio member secretary. Of the remaining members, seven each would represent: unorganised sector workers, employers of unorganised sector, and state government departments concerned.

In addition, there would be five members representing civil society of the bill detailed the registration process which is important because only after a worker is registered can they avail themselves of the benefits provided. There are two basic criteria for registration; firstly, the person must be fifteen years of age or more and secondly, he/she should declare that he/she is a worker in the unorganised sector.

The application has to be made to the district administration and the worker, after registration, would be issued an identity card. In other words, such a process would make the unorganised sector workers more visible. At present the main problem lies in the fact that no organisation knows exactly how many workers there are in this sector and what types of work they perform. It is difficult to plan for the uplift of the unorganised sector if the planners are not aware of the numbers involved.

In conclusion, the bill in itself seemed attractive and could go a long way in improving the living conditions of the workers in the informal sector. Unfortunately, most of the schemes listed in the schedule of the bill related only to insurance-related activities. This was despite the fact that the bill aimed to upgrade the skills of these workers.

The schedule did not contain a single scheme related to this aspect The eleven schemes mentioned in the schedule included National Old-age Pension Scheme, National Family Benefit Scheme, National Maternity Benefit Scheme, Mahatma Gandhi Bunkar Bima Yojana (insurance scheme for weavers), Health Insurance for Handloom Weavers, Scheme for Pension to Master Craftspersons, Group Accident Insurance Scheme for Active Fishermen, Saving-cum-Relief for Fishermen, Janashree Bima Yojana, Aam Admi Bima Yojana and Swasthya Bima Yojana. Most of these schemes were in operation before the Act came into being .The schemes have been successfully implemented where there are trade unions for informal workers or NGOs working among them. For example, SEWA has been quite active in registering workers under these schemes. The National Association of Street Vendors of India (NASVI) has enrolled several thousand street vendors in the various schemes. Some NGOs like Centre for Civil Society and Nidan have also been active in enrolling members under the schemes.

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