Towards an Inclusive Society

India’s social security framework has expanded through wider EPFO coverage, digital reforms and welfare initiatives. EPFO provides provident fund savings, pension and insurance benefits to eligible members. The increase in the mandatory coverage wage ceiling from ₹15,000 to ₹25,000 is expected to bring over 51 lakh additional employees within its ambit. Digital initiatives aim to simplify registration, withdrawals and claim settlement. Beyond EPFO, initiatives such as e-Shram, and schemes like PM-SYM and the Pradhan Mantri Samajik Sahayata Yojana extend support to unorganised workers and vulnerable groups. These measures strengthen access to social protection across employment categories and stages of life

Social security is a fundamental pillar of a just and inclusive society, serving as a safety net that protects citizens against economic vulnerabilities arising from life contingencies.

In a rapidly developing nation like India, providing adequate social protection is both an ethical imperative and an economic necessity. With a population exceeding 1.4 billion, India faces the monumental task of constructing a comprehensive safety net that addresses the distinct needs of its deeply fragmented workforce.

The Dual Structure of India’s Labour Market

The primary challenge in expanding India’s social security framework stems from the stark dichotomy within its labor market, which is split into the formal (organized) and informal (unorganized) sectors.

• The Organised Sector: Comprising roughly 10% to 12% of the total workforce, employees in this sector enjoy relatively robust, legally backed social security benefits. These are primarily governed by historic legislations such as the Employees’ Provident Fund (EPF) Act, the Employees’ State Insurance (ESI) Act, and the Payment of Gratuity Act. These mechanisms offer structured retirement pensions, healthcare coverage, and maternity benefits, funded through co-contributions from employers and employees.

• The Unorganized Sector: Dominating nearly 90% of the workforce, this segment includes agricultural laborers, street vendors, construction workers, domestic help, and gig economy workers. Historically, these individuals have operated outside the ambit of formal labour laws. They lack steady incomes, formal contracts, and employment-linked benefits, leaving them highly vulnerable to poverty due to illness, old age, or economic shocks.

Paradigm Shifts and Government Initiatives

Recognising this massive gap, the Government of India has launched several flagship initiatives over the last decade aimed at universalizing social security.

To tackle the challenge of healthcare-induced poverty, the government introduced Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PM-JAY). This scheme represents a massive stride toward Universal Health Coverage by providing free secondary and tertiary healthcare coverage of up to ₹5 lakh per family per year to over 500 million poor and vulnerable citizens.

For income security and old-age protection in the informal sector, programmes like the Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM) and the Atal Pension Yojana (APY) were created. These schemes encourage informal workers to make small, regular contributions during their working years, which are supplemented by government co-contributions, to guarantee a steady monthly pension during retirement.

Furthermore, life and accident insurance are subsidised through affordable schemes like the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Pradhan Mantri Suraksha Bima Yojana (PMSBY).

A foundational element enabling these modern schemes is the digital public infrastructure. The launch of the e-Shram portal has allowed the government to create a comprehensive national database of unorganised workers, seeding them with Aadhaar cards. This digital identity ensures the direct and transparent delivery of benefits through Direct Benefit Transfers (DBT), eliminating middlemen and plugging leakages.

Structural Bottlenecks and Implementation Challenges

Despite these commendable steps, India’s social security coverage continues to grapple with systemic hurdles that limit its overall effectiveness.

First, funding and fiscal constraints present a major bottleneck. India’s public spending on social protection remains low compared to its global peers and OECD standards. Financing a universal safety net purely through tax revenues is difficult given India’s narrow income-tax base.

Second, there is a prominent issue of awareness and administrative friction. Many eligible informal workers remain unaware of these schemes or find the registration processes too complex to navigate. This is further compounded by the highly migratory nature of India’s informal workforce; construction and seasonal agricultural laborers frequently move across state borders, often losing access to localized welfare benefits due to a lack of complete interstate portability.

Third, the rise of the gig and platform economy has introduced a new class of workers — such as delivery executives and cab drivers. Because they are classified as “partners” rather than traditional employees, they occupy a legal gray zone, often missing out on both formal employer mandates and informal state welfare.

The Path Forward: Legislative Reform and Universality

To address these fragmented gaps, India is in the process of implementing the Code on Social Security, one of four monumental labour codes designed to simplify and rationalise 44 legacy central labour laws. This Code explicitly seeks to extend social security boundaries to gig workers, platform workers, and unorganized laborers. However, its full, uniform enforcement across all states remains an ongoing legislative milestone.

To achieve truly universal and resilient social security coverage, India must adopt a multi-pronged strategy:

• Increase budgetary allocations dedicated to healthcare and social safety nets.

• Simplify enrolment by utilising local governance structures like Gram Panchayats and urban local bodies to run registration drives.

• Ensure complete portability of welfare benefits so that internal migrants do not forfeit their rights when moving for work.

• Mandate employer contributions from digital platforms to co-fund safety nets for the growing gig workforce.

Conclusion

Expanding social security coverage in India is an evolving journey from a fractured, employment-linked model toward an inclusive, rights-based universal framework. While structural and financial challenges persist, the integration of digital public infrastructure with targeted legislative reforms offers a promising blueprint.

Ensuring that no citizen is left vulnerable to predictable life risks is not just a measure of welfare, but a core catalyst for India’s sustainable and equitable economic growth.