THE CASE FOR A UNIVERSAL OLD-AGE PENSION

The vast majority of India’s labour force of nearly four hundred eighty million is employed in the informal sector, which is characterised by insecurity of employment, poor working conditions and absence of social security. This is where the self-employed, such as small farmers and entrepreneurs, artisans, street vendors and rickshaw pullers, are clubbed together with wage workers in farms, unorganized enterprises and households. The formal, organized sector, which includes the state and its instrumentalities, the corporates and large not-for–profit organizations, has a poor track record of creating employment opportunities. The annual accretion to the labour force is willy-nilly accommodated in the informal sector, where the entry barriers are much lower than in the formal sector.

The informal sector, which is estimated to employ ninety-four percent of the nation’s labour force and contribute roughly forty percent of its gross domestic product, has suffered from a chronic policy deficit. The issues of concern to the formal sector have occupied all the mind space of the policy establishment, which is hardly surprising in view of its provenance, affiliations and vested interests.

Our policymakers are indifferent to the abysmal levels of productivity and working conditions in the informal sector and the crying need of public investment in its physical infrastructure and social capital. How can one then expect them to care about the lot of those, who, for reasons of age, infirmity, or technology-induced redundancy, are no longer able to earn their livelihood in the informal sector? It is conveniently assumed that the Indian system of joint family with its tradition of respect and care for the elderly will provide a safety net for them.

- Kamal Kant Jaswal