InFormal

Abhilasha NS, Arun S, Biswajit Sarmah, Nishant Chavan, Rahul Anthwal

Azim Premji University, Bangalore

Footloose Livelihoods: Extending social security to the informal sector

Theme - Protecting The Vulnerable: Providing Social welfare to Informal sector workers

1,455 3,530 3,335 2,500 8,531

13,100 7,374

35,968

4,873 7,172 7,943 7,139

17,808

29,900 25,101

83,270

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Employment (2008) Projected Employment (2022)

Focus: Identification of bottlenecks in extending social security to construction workers in Karnataka and feasible interventions to overcome them.

Scope:

Estimated 15 lakh construction workers in Karnataka, Only 3 lakhs are registered so far.

Rs 2000 cr. welfare fund with Karnataka Building and other Construction Workers Welfare Board (KBOCWWB)

Low registration, inability to attract workers to register.

Issues:

Excessive reliance on trade unions for registration (high fees charged), low engagement of civil society.

Trade Unions unable to register workers (mostly migrant) at construction camp sites.

Cards not reaching the registered beneficiaries.

Inadequate manpower at KBOCWWB.

Cumbersome process of claims for benefits.

Poor data storage and analysis.

Problem: Inaccessibility and marginal utilisation of eligible welfare benefits by construction workers in Karnataka

Construction industry: fastest growing industry

All India Employment Numbers (In ‘000s)

Source: NSDC Skill Gap Analysis Report 2009

Engaging various

stakeholders for different

constituencies of construction

workers

Manpower and Capacity Building

Automation in registration and

renewal of workers, and in

utilisation of eligible benefits

Proposed Solution

Tackle the problem of low enumeration and design of welfare delivery system to access eligible benefits by the construction workers

High Level Description

Engaging various stakeholders for different constituencies of construction workers • Trade Unions- in small scale construction sites & non-

migrant construction workers. • KBOCWWB and NGOs- Large construction sites + migrant

construction workers. • Plural approach, building on existing systems • Govt machinery – cumbersome, bureaucratic

Automation in registration and renewal of workers, and in utilisation of eligible benefits • Biometric registration, on the spot delivery of cards

through • Automatic digital data storage/analysis. • Reduction in paperwork. • Accessibility of benefits for mobile workers. • Cost effective in long run. • Overcomes delays and card non-delivery. • Electronic claims of benefits.

Solution • Description

• Rationale

Manpower and Capacity Building.

• Increase the number of employees dedicated to identification and registration.

• Time bound, dedicated facilitation of registration

• Outsource the technical process of registration.

• Cost-efficient, dedicated team

• Skilled manpower like medical doctors to process medical benefit claims.

• Rapid settlement of claims

• Review & Monitoring : District Surveillance Committee under Labour Officer.

Dat

a

Central Server

State Server

District Server

Registration Toolkit On The Spot Card

Delivery

Beneficiary (Proof of identity, age, doctors

certificate)

District Registration Authority (DRA)

Worker Identification Officer (WIO)

(Labour Union/Govt)

Employer

Dat

a D

ata

KBOCWWB REGISTRATION

No. of workers to be registered

1,000, 000

Time frame 180 days

Registration Toolkit Biometric reader, Camera,,Electricity, Software

Location/Date/Time of Registration

Labour Inspectors/ NGOs/Volunteers/Media will identify the construction site

1. Total districts in Karnataka : 30. 2. The manpower recruited by

board will be engaged in benefit distribution/renewal/Kiosk offices after registration is over.

3. Every registration centre will have equipment to issue biometric card on the spot of registration.

Category of Expenditure Nos/Units Required

Annual Cost Total Cost

I. Fixed Infrastructure

Central Server at state level

1 1,000,000 1,000,000

District Server/Kiosk Cost

30 200,000 6,000,000

II. Manpower (Over and above present strength)

Salary of the Additional Executives.

30 300,000 9,000,000

Salary of Additional Technical Operator.

30 180,000 5,400,000

Office Rent/Maintenance

30 600,000 18,000,000

III. Biometric Registration and Card Issuance on the spot

Registration/card Issuance Cost

1,000,000

120 120,000,000

IV. Total Expenditure 159,400,000

Business Contingency Plan • Reissuance of lost card • Reporting of lost card • Addition and deletion of members • Subscription of members • Photo/Thumb impression correction • Any other error correction

Registration Process • Awareness and intimation slips will be given to

all the sites before registration day (RD). • On the RD kits, manpower, WIO will visit the

site. • Every registration site will have WIO to

authenticate the registrations. • Worker will pay the registration fees along with

relevant documents to get his biometric data submitted and receive a card on the spot.

• Auto-digitized registration data will be loaded in the District Servers which will be further connected to State Server.

Impact

All amounts in Indian Rupees | No of Registrations for 2015-16 & 2016-17 considered constant as of 2014-15 | Projected Benefits payout from last 5 years growth trend. (Sources: KBoCWW)

Estimated Benefits In Successive Years After Proposed Registration

Tangible Intangible

10 lakhs enrolment in 6 months. Benefit payout of Rs. 41 Cr in 2014-15 and 151 Cr in 2016-17. Highest benefit distribution in Children Education, Funerals & Health.

Greater availability of social credit/insurance due to expectations of benefits from the govt. Reduction in the burden of health expenditure. Open up avenues for educaitonal opportunities.

2012-13 2014-15 2015-16 2016-17

No of registrations No of Claims

Amount Paid No of projected registrations

Projected Payout

Projected Payout

Projected Payout

Education

270000

6420 13964200

1300000

35,290,224 278,200,000 556,400,000

Marriage 894 8365000 19,565,657 95,382,576 143,073,864

Maternity 99 594000 1,375,000 8,937,500 13,406,250

Hospitalization on Illness 159 133750 856,329 1,284,493 1,926,739

Major Illness 154 4495555 28,661,989 42,992,983 64,489,475

Death 79 6309000 39,304,938 58,957,407 88,436,111

Funeral 553 10362000 285,387,686 428,081,530 642,122,295

Total 8358 44223505 410,441,823 913,836,489 1,509,854,734

Before and After Scenario

Issue Existing processes After Implementation of proposed solution

Manpower of Governement

KBOCW with officers in deputation and contract executives

KBOCW with full time officers and increased and specifically skilled executives – medical, social, etc.

Registration Agency Registration through Trade Union/NGO/Dept. in for the Construction workers.

Trade Union: Focus on local construction workers. KBoCWWB/NGO: Migrant construction workers, big project sites

Registration & storage of Data

Cumbersome Paperwork, expensive for construction worker, loss of wage, delay/no delivery of cards

Biometric registration and card delivery on the spot, robust electronic data

Benefit Accessibility Difficulty in accessibility Construction workers can avail benefits from anywhere.

Amount of Benefits Rs. 4.42 Crore of welfare benefit distribution.

Annual benefit distribution of Rs. 41 Crore after one year and Rs. 151 Cr. after two years.

Mode of remitting benefits

Direct credit to account of beneficiary but no didgital records to curb misuse.

Direct credit of benefits to account and maintenance of data to avoid fraud /duplicate claims.

Replicability and Scalability

To Other States • Depending on the size of labour

force in construction industry. • Strength and constituency pattern of

Trade Unions and NGOs. • Presence of migrant labour force

may need special strategy. • Build inter-state coordination to

extend benefits to workers.

To Other Informal Sectors Participants: • Identification by existing bodies

working with the workers of sectors e.g. Street Vendors Union, Resident Welfare Association (RWA) etc.

• Regulatory and welfare body as per specific Acts.

Funds: • Registration fees, employer’s

contribution, government grants. Process: • Biometric, on the spot registrations.

To other welfare schemes: • Data of registered workers can be

used to secure benefits other from schemes such as Rashtriya Swasthya Bima Yojana (RSBY) etc.

• Respective state welfare boards can use the data of registered workers to promote modular education among children of informal sector by leveraging unique educational resources by NGOs and pvt sector e.g.- Azim Premji Foundation1

Political Challenge • Access of benefits by migrant construction

workers in their home state without collaboration among states.

• Prospects of demand from other sectors which have scarce funding sources.

• Full autonomy to such a huge fund bearing board i.e. KBOCWW is difficult.

Economic Challenge

• When maximum number of workers are registered, the pilferage through fraud/duplicate claims will be high in absolute numbers.

Legal Challenges • Challenges of identification of age of

worker in absence of document . Impact on pension etc.

• Termination of contract of registration agency is not easy in case of defaulting.

Social Challenge • Possibility of misusing the scheme by local

power-lords. • Lesser registration of female construction

workers.

Technological Challenges • Technological failures due to electricity ,

machine breakdown.

Challenges & Mitigation Factors

Semi-structured interviews with construction workers (migrant and local) in Bangalore.

Interactions with officials of the KBOCWB, Trade Unions, etc.

The Challenge of Employment in India: An Informal Economy Perspective: Volume I - Main Report, National Commission For Enterprises in the Unorganised Sector, New Delhi: Dolphin Printo Graphics, April, 2009

D. Rajashekhar and Suchitra J Y, Employment security for the unorganized sectors workers in Karnataka, Institute for social and economic change, Working Paper- 169, 2006.

Prasad, R.S. Nithin et al, A Study on Building and Other Construction Workers Welfare Schemes/ Amenities in Karnataka, SASTech Journal, Volume 10, Issue 1, May 2011, pp- 59-66.

Sharma, Alakh. N and Dhruv Sood, Migration and Informality, Institute of Human Development, New Delhi < http://wiego.org/sites/wiego.org/files/resources/files/Sharma-migration_india.pdf>

Report on Conditions of Work and Promotion of Livelihoods in the Unorganized Sector, National Commission For Enterprises in the Unorganised Sector, New Delhi: Dolphin Printo Graphics, April 2007.

Dreze, J. and A. Sen, Public Action for Social Security: Foundations and Strategy. In E. Ahmed et al (eds.), Social Security in Developing Countries, New Delhi: Oxford University Press, 1999.

Tiebout, Charles. M, Pure Theory of Local Expenditures, Journal of Political Economy, Volume 64, No. 5, University of Chicago Press, 1956, pp. 416- 424 URL<http://www.jstor.org/stable/1826343>

References

Annexures