The introduction of the eShram portal by the Ministry of Labour & Employment is a positive step to bring visibility to what has been the “invisible” section of the workforce population in India. During the current year Budget 2022, the Finance Minister highlighted that the common portal will be used to collect information on unorganized sector workers, and use it to “formulate health, housing, skill, insurance, credit and food schemes for migrant workers.” It was re-iterated that all eligible registered workers on the eShram portal will be assured an Accidental Insurance cover of 2 Lacs under PMSBY from the date of issue of policy.
The Covid-19 pandemic was a wake-up call where the informal economy took the hardest hit. It is estimated that approximately around 91% of the Indian workforce segment is employed in the informal sector. Nearly, 49.6% have no social security net, and 71% have no written job contract in 2017-18, according to the most-recent Periodic Labour Force Survey. During the pandemic crisis, they could not receive any promised cash from the government after being laid off by their employers.
A report published in the Ministry Of Rural development stated that a majority of workers in the informal sector fall under India’s Below Poverty Line, 22% of the country’s population in 2012-13. Most of them struggle to generate a continuous stream of income to sustain their livelihood and cater to the needs of their family. Accessibility of a social security code for such a workforce has been a herculean task.
Some key issues exist in the employment sector of India. First, it is anticipated that Indian demography would transition into an aging population by 2040 meaning the country needs preparation for a stronger social security net. Second, low wages pose the biggest challenge for the workforce in India, with more than 80 percent earning less than Rs 10,000 per month. Bringing these enormous low-wage earners under a social security architecture is not realistic in a short time. Third, the Indian workforce is fragmented and heterogeneous where devising a single universal social security policy will not resolve the issues. And fourthly, most of these workforces don’t have the required digital skills to register themselves online leading to their failure in the registration process.
Hence, it calls upon the need for the government to understand the characteristics of the households in the informal economy to devise a proactive social security policy. The registration and documentation of these workers is the first and foremost step toward recognizing them through the creation of an authentic database. It, in essence, captures informal workers' occupations by associating them with a professional identity. Furthermore, any worker who is a home-based, self-employed, or a wage worker in the unorganized sector including a worker in the organized sector who is not a member of Employees’ State Insurance Corporation (ESIC) or Employees’ Provident Fund Organization (EPFO) is called an Unorganized Worker. More than 17 crore informal sector workers have registered themselves on the eShram portal
The maintenance of these records can be strengthened by the addition of the details of the employers which will increase their accountability. The liability of employers towards their employees will be more in cases of accidental injury or death at the workplace, or even a national emergency. This would reduce the burden of responsibility on the state to provide additional relief to workers in emergencies, such as the COVID-19 pandemic, or to provide them with social security or benefits.
It is also equally important for the government to provide a universal portal where workers can avail employment opportunities, job security, pension benefits, maternity leaves, paid leaves, and other social benefits under the social security code. Formalizing the informal economy has been a long-standing demand of various labor unions, and International Labour Organization (ILO) Recommendation No. 204 talks about the transition from informal to formal economy.
To achieve the desired result, as per globally accepted standards, it is imperative that both the employers and the government work hand-in-hand to facilitate basic issues such as detailed modalities and portability of registration, setting up government offices for eShram registration and other formalities assistance, the timeline for universal registration, a clear definition of unorganized workers to be covered under the Code, realistic determination of mode and amount of contribution by the unorganized workers, and a firm time frame for universal coverage of all workers.