What is it?
Government provides it on a compulsory basis It comes into picture when private parties fail to cover all risks. Government can use its power and resources to apply the insurance method in its original or modified form
Cost and benefits set by the govt. and not on contract.Characteristics
Based on law. Coverage is compulsory. Benefits can¶t be chosen Objective is to provide some min level of economic security and stress on free enterprise and individual initiative Focus on providing max benefits to the LIG Assures an interruption of income does not happen in the case of death or unemp
backward etc. informal sector. economically vulnerable.Legal Framework
Section 32B Section 32C Social sector consists of unorganised sector.
. Jamaica.Social Insurance in India
UNICEF and World Bank provide evidence that direct public support will lead to success of social security programs Countries with primary social security became rich. Kuwait etc. Cuba.
Need for SI in India
Large percentage employed in the unorganized sector State support negligible Social changes in the country
unemployment compensation. disability compensation. A comprehensive social security system includes social insurance. old-age pension schemes.
. etc. health insurance.
India ± a special case
Support led social security is best Not a constitutional right Fragile economic condition does not permit
hut insurance scheme etc.
.SI Schemes of GIC
Krishi Bima Yojana. Personal Accident social security scheme. Most of them failures due to incompatibility with the objectives.
Group Insurance Schemes. Krishi Shramik Samajik Suraksha Yojana etc.SI Schemes of LIC
Landless Agricultural Laborers Scheme. Most of them failed due to lack of awareness among people Another scheme launched was Janashree Bima Yojana to replace older schemes Objective was to provide LI to rural and urban poor
Min size of group 25 Annual premium: 200 per member Member/nodal agency/state govt. other half by Social Security Fund 40 occupational groups covered ranging from beedi workers to construction workers
. pays half the premium.
Cost minimization through pooling of funds Need for separate body for SI Group insurance schemes are the best and work-based and community based SI systems should be encouraged
suits local requirements
. Introduction of a nodal agency which reduces the admin overheads. higher chances of success.
Nodal agencies can be«
Cooperatives Associations Self Help Groups
Selecting nodal agencies
High level of mutual trust Monetary transactions Frequency of interaction of nodal agency with the group Organizational structure of the nodal agency Interest of the nodal agency
will take time to come to India..Objectives of Unemployment Insurance
For employed persons who lose their jobs and are willing to work Provide cash income during involuntary unemployment Helps unemployed workers find jobs Encourage employers to stabilize employment Help stabilize economy Popular in U.S etc.