Social security schemes: a case for universalisation

Abstract

Prime minister's recent introduction of new social security schemes to ensure insurance and pension for all remains a laudable step. These schemes were launched on May 9, 2015 and are expected to enhance welfare of citizens, especially workers in unorganized sector. The schemes are Pradhan Mantri Suraksha Bima Yojna (PMSBY), an ultra-low cost accident insurance scheme, a life insurance scheme, Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), and Atal Pension Yojana (APY), a contributory pension scheme with defined benefit outgo. The paper attempts to evaluate the nature of social security schemes in the field of life/accident insurance and pensions, with special reference to the recently announced schemes. Primarily, it argues that an introduction of contribution element in new schemes limits the coverage. It recommends the need for a properly crafted universal scheme for social security to achieve wider coverage. A defined flat benefit scheme financed through taxation in the areas of life/accident insurance and pensions remains a better option as it can guarantee wider coverage of social security.