35371809 social insurance

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Social Insurance



What is it?

Government provides it on a compulsory

basis

It comes into picture when private partiesfail to cover all risks.

Government can use its power and

resources to apply the insurance method

in its original or modified form



Characteristics

Based on law, and not on contract. Cost andbenefits set by the govt.

Coverage is compulsory. Benefits can¶t be

chosen Objective is to provide some min level of

economic security and stress on free enterpriseand individual initiative

Focus on providing max benefits to the LIG Assures an interruption of income does nothappen in the case of death or unemp



Legal Framework

Section 32B

Section 32C

Social sector consists of unorganisedsector, informal sector, economically

vulnerable, backward etc.



Social Insurance in India

UNICEF and World Bank provide evidence

that direct public support will lead to

success of social security programs Countries with primary social security

became rich. Eg: China, Cuba, Jamaica,

Kuwait etc.



Need for SI in India

Large percentage employed in the

unorganized sector

State support negligible Social changes in the country



A comprehensive social security system

includes social insurance, health

insurance, disability compensation,unemployment compensation, old-age

pension schemes, etc.



India ± a special case

Support led social security is best

Not a constitutional right

Fragile economic condition does notpermit



SI Schemes of GIC

Krishi Bima Yojana, Personal Accident

social security scheme, hut insurance

scheme etc.

Most of them failures due to incompatibility

with the objectives.



SI Schemes of LIC

Landless Agricultural Laborers Scheme,Group Insurance Schemes, Krishi ShramikSamajik Suraksha Yojana etc.

Most of them failed due to lack of awareness among people

Another scheme launched was Janashree

Bima Yojana to replace older schemes Objective was to provide LI to rural and

urban poor



Min size of group 25

Annual premium: 200 per member

Member/nodal agency/state govt. payshalf the premium, other half by Social

Security Fund

40 occupational groups covered rangingfrom beedi workers to construction

workers



Recommendations

Cost minimization through pooling of funds

Need for separate body for SI

Group insurance schemes are the bestand work-based and community based SI

systems should be encouraged



Introduction of a nodal agency which

reduces the admin over heads, higher

chances of success, suits local

requirements



Nodal agencies can be«

Cooperatives

Associations

Self Help Groups



Selecting nodal agencies

High level of mutual trust

Monetary transactions

Frequency of interaction of nodal agencywith the group

Organizational structure of the nodal

agency Interest of the nodal agency



Objectives of Unemployment

Insurance For employed persons who lose their jobs and

are willing to work

Provide cash income during involuntary

unemployment

Helps unemployed workers find jobs

Encourage employers to stabilize employment

Help stabilize economy Popular in U.S etc., will take time to come to

India.

35371809 social insurance

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