A human development perspective
A.K. SHIVA KUMAR
DEPRIVATIONS and vulnerability are integral to the lives of many millions of unorganized workers. It should thus be obligatory for every civilised society to offer tangible protection and to create new opportunities for reducing the insecurities in the lives of such workers. This paper discusses the significance of social security from a human development perspective and comments on some aspects of the NCEUS proposal to introduce a Social Security Bill for unorganized sector workers in India.
The idea of human development has, since the publication of the first Human Development Report in 1990, played an influential role in altering the nature and quality of development discourse.1 Building on the philosophical writings of Amartya Sen, the human development approach argues for changing the way human progress is assessed – not narrowly in terms of increases in people’s incomes, but more broadly in terms of an enhancement of human capabilities, a widening of choices, an expansion of freedoms and an assurance of human rights. In other words, the focus in the human development framework is not merely on generating more incomes (which is instrumentally important) but equally on ensuring that the additional wealth gets translated into significant improvements in the quality of people’s lives. Inherent in the human development approach is a strong focus on universalism, equity and social justice. The concern with enhancing people’s capabilities has to do with children, men and women everywhere – no matter where they are born, where they live, and to which community, gender, colour or caste they belong. Also imbedded in the idea of human development is a deprivational perspective where the primary concern is with improving the conditions of the poor.2
Giving considerable impetus in recent years to the practice of human development have been the concept of human security and the idea of human rights. Human security contrasts with the notion of state security, which ‘concentrates primarily on safeguarding the integrity and robustness of the state and thus has only an indirect connection with the security of the human beings who live in these states.’3 Human security is ‘concerned with reducing – and when possible – removing the insecurities that plague human lives.’ It complements the human development approach by focusing on ‘downside risks’ and insecurities that ‘threaten human survival or safety of daily life, or imperil the natural dignity of men and women, or expose human beings to the uncertainty of disease and pestilence, or subject vulnerable people to abrupt penury related to economic downturns.’
Similarly, the articulation of human progress as an assurance of human rights has further strengthened thinking and public action for human development. The human rights advocates bring a strong moral and ethical dimension to development dialogues by arguing that every citizen – man, woman and child – has some basic rights that others should respect and strive to assure. Some of these rights, like the right to elementary education, can acquire a legal backing. But even where legislative backing is not easy, the claims to human rights articulated as basic freedoms of individuals need to be protected and promoted.
Defining human progress as an assurance of human rights helps to establish the legal entitlements of citizens to decent living, create a framework of accountability and identify the responsibilities of the state and other duty-bearers towards ensuring the realization of the rights. The ‘right-to-development’ approach further underscores the relevance of the interdependence and interlinkages between rights and argues for establishing clear responsibilities among stakeholders which alone can further establish the basis for accountability.4
On many counts and by all accounts, human poverty remains widespread and entrenched despite the increasing growth rates in per capita income.5 The Approach Paper to the XI Five Year Plan, for instance, suggests little reduction since 2000 – or even perhaps a marginal increase – in the proportion of population living below the poverty line. Rates of reduction in infant mortality rates have been slow and uneven over the past decade. Neonatal mortality in particular remains stubbornly high. Preliminary data of the 2005-06 National Family Health Survey – three released for five states: Chhattisgarh, Gujarat, Maharashtra, Orissa and Punjab – reveal that while gains in immunization coverage have been made in Chhattisgarh and Orissa, there has been a substantial deterioration in full immunization coverage in the last seven years in Maharashtra, Punjab and Gujarat (three affluent Indian states) due to a decline in vaccination coverage for both DPT and polio.
Progress in reducing maternal mortality has been slow across the states. Malnutrition among children, estimated at 47% in 1998-99, remains high. Similarly, there is much ground to be covered in terms of improving children’s access, and particularly that of girls, to good quality basic education. Unemployment, especially in rural areas and among youth, is becoming a serious cause for concern.
Given the pervasiveness of human poverty and the high vulnerability of most unorganized sector workers in India, it becomes all the more important to view social security through the lens of human development, human security and human rights. Policies ought to advance both protective and promotive social security.6 The conventional notion has been to view social security narrowly as unemployment benefits, old-age pension and compensation for disability and death. While such a limited focus helps to sharpen the thrust of interventions, it is equally important to concentrate on policies that more fundamentally seek to remove deprivations that necessitate the introduction of social security measures.
Unorganized sector workers in contemporary India face three major threats to human security: poor health, shrinking livelihoods and muted voice. Ill-health is among the leading causes of both impoverishment and vulnerability of workers in the unorganised sector. The absence of an effective community-based health care system, even after nearly 60 years of independence, is a sad reflection of the priority accorded by India to people’s health. Public health expenditure in India declined from 1.3% of GDP in 1990 to 0.9% in 1999. Only 10% of Indians have some form of health insurance, mostly inadequate. Curative services are known to favour the non-poor: for every rupee spent on the poorest 20% of the population, three rupees are spent on the richest quintile. Hospitalisation accounts, on average, for 58% of the total annual expenditures incurred by Indians. Over 40% of hospitalised Indians borrow heavily or sell their assets to cover medical expenses. And over 25% of hospitalized Indians fall below the poverty line because of hospital expenses.7
The inadequate reach of quality health services forces most poor citizens to go to unqualified medical practitioners where they become easy victims of, as Amartya Sen describes, both ‘quackery and crookery.’8 Particularly neglected are concerns of women’s health in India. Lack of effective access to safe reproductive health services makes even pregnancy a high-risk event for many poor women. According to the 2005-06 NFHS-3, anaemia levels are high among women and have not declined in the last seven years in four of the five states for which data are available.9 It is therefore imperative that addressing health concerns of the poor and unorganised sector workers must be a core component of any protective social security initiative.
Measures to promote social security among unorganized sector workers cannot be divorced from actions needed to expand livelihood opportunities for them. Trade liberalization in recent years has created enormous uncertainty in the lives of unorganized sector workers. Intense competition from imported machine-made products made in India and abroad threatens the livelihoods of millions of artisans and handloom weavers who constitute a significant proportion of unorganized workers across the country. It is not difficult, for example, to find Chinese-woven Benarasi sarees, rakhis and even Ganesh statuettes that are many times cheaper than the Indian handmade originals. As a result, large numbers of displaced handloom weavers are being forced into penury and deprivation.
Similarly, the opening of retail trade to foreign direct investments is likely to further eat into the market for goods produced by traditional artisans. Securing livelihoods therefore must become a priority alongside the introduction of social security measures for unorganized sector workers.
Securing livelihoods implies tackling markets and market competition. Markets as an institution do not, however, care about equity and social or gender justice. Price wars are common in competitive markets, and like in any war situation, everything is fair including labour displacement and exploitation. State action in India has traditionally taken the form of offering protection and subsidies to safeguard the interests of handloom weavers and artisans. These policies have met only with limited success. Several parastatal organizations to support handlooms and handicrafts have been set up, but these have not led to the flourishing of trade and employment. On the contrary, most such institutions are rapidly decaying and are a drain on scarce financial resources. They have ended up benefiting traders much more than primary producers.
The only way to secure livelihoods for handloom weavers and artisans is to secure space in the market for handmade products. State action is essential for achieving this. But state actions need not take the form of more subsidies or reintroducing protection. Instead, the state must help to create a level playing field for Indian handmade products. This can be done by establishing a unique and authentic ‘Handmade in India’ brand that is recognized across the world. Such branding will almost immediately protect genuine artisans and weavers from imitation products. While nothing can prevent the sale of cheap imitations, the more discerning consumer, both in India and abroad, will at least be guaranteed of the genuineness of the handmade product. Like the Woolmark symbol, the ‘Handmade in India’ brand needs to be globally marketed to create an awareness among consumers. If well managed, such a national branding exercise (like the Incredible India campaign) can reverse the threat of shrinking markets for traditional artisans and weavers, and indeed, help many collective organizations to focus on reviving production and increasing employment.
The very term ‘unorganised’ suggests that millions of such workers do not have a collective voice and say in influencing public decisions. The din of globalization has, in fact, over the past few years further muffled the voice of unorganised sector workers. This has been one reason why despite recognizing the severe threats to livelihoods, little has been done to offer protection against downside risks. The central and state governments have instituted schemes and welfare funds for specific category of workers such as beedi workers, mica and limestone quarry workers, salt workers, and so on; but the coverage has been extremely uneven and small and the benefits negligible.
According to the NCUES Report,10 the various schemes of the central and state governments cover hardly 6% of the informal and unorganised sector workers. A few organisations like SEWA (Self-Employed Workers Association) have been advocating for fair policies to protect self-employed and unorganised sector workers. But such efforts have only a limited impact on policy formulation. Strong political and public support needs to be mobilized if any social security measure has to find acceptance among policy-makers.
The Unorganised Workers Social Security Bill proposed by the NCEUS is an important step towards moving from considered thought to public action. And the bill needs to be supported. A strong human development and human rights perspective provides the normative framework for the bill. While recognising rightly the need to address capability deprivations through promotional social security, the report limits itself to protective social security for workers in the informal economy. The suggested definition of the unorganized sector as well as eligible workers for social security is comprehensive.11
Careful analysis has identified five types of principal risks that lead to substantial financial shocks and impoverishment: major illness of a family member, birth of a child, accident or injury leading to temporary or permanent disability and loss of working days, old age and unemployment. Accordingly, the National Social Security Scheme proposed by the commission suggests contributions to cover hospitalization, maternity and life insurance and old age security. A unique proposal is to cover sickness as well. The poorest – those living below the poverty line – are exempt from making any contributions and the commission recommends that their share be paid for by either the central or state governments. The commission has also outlined in detail the institutional structures and arrangements needed for implementing the different schemes.
Few countries in the world today enjoy such propitious circumstances as India does. Not only is the country experiencing strong economic growth, India also has the potential resources – both human and financial – to introduce the proposed schemes. There are, however, a few issues that will need to be sorted out as the proposal is discussed and debated in the coming months. First, the basis for the suggested monetary criteria and benefits needs to be clearly spelt out. For instance, the monthly income limit for qualifying to be an unorganised worker is Rs 6,500 per month; and the maximum cover for hospitalization is Rs 15,000 and for maternity benefits, Rs 1000. Similarly, an old age pension of Rs 200 per month to all poor old aged workers has been proposed. It is important to explain fully the rationale behind these limits and figures and propose some form of indexation to inflation.
Second, the Bill remains silent on cases where hospitalization will cost more than Rs 15,000. Third, the success of the scheme will depend to a large extent on improvements in the efficiency and effectiveness of health provisioning. Without appropriate supply-side responses that can guarantee quality health care, it is not fair to expect any tangible health and medical benefits to unorganized workers. Fourth, mechanisms for registration, reimbursement and implementation need to be thought through in order to ensure efficiency in public management. The schemes will benefit the poor only if they can provide timely assistance to workers. It is also essential to involve non-governmental and grassroots organizations as well as panchayats in the administration of the schemes to ensure transparency and effectiveness. Appropriate community-based modalities of management and supervision need to be spelt out in some detail.
Last but not the least, is the issue of costs and financing. With effective political backing, it ought to be possible for the state to mobilize and allocate the additional funds needed for the bill. According to the report, the additional financial requirements of both the central and state governments will rise from 0.20% of GDP in the first year to 0.48% in the fifth year. This is certainly not a large amount. India is committed to increase public expenditures on health to 2-3% of GDP over the next five years. Part of the expenses of offering health and medical protection to unorganized workers can easily be absorbed into this higher financial commitment for health.
However, even as the state contemplates the introduction of the Social Security Bill, it must move towards protecting livelihoods and promoting employment. It is time for the government to consider introducing a Handmade in India brand that establishes a niche for products made by traditional workers in the unorganized sector. Accepting and refining the recommendations of the NCEUS offers a unique opportunity for India to chart a new course of pro-poor development – that the rest of the developing world is bound to emulate.
1. United Nations Development Programme, Human Development Report, Oxford University Press, New York, USA, 1990.
2. For original contributions by Amartya Sen and others on the concept of human development, see Sakiko Fukuda-Parr and A. K. Shiva Kumar, Readings in Human Development, Oxford University Press, New Delhi, 2003.
3. Commission on Human Security, Human Security Now, Commission on Human Security, New York, USA, 2003.
4. Arjun Sengupta, ‘On the Theory and Practice of the Right to Development’, Human Rights Quarterly 24(4), November 2002, pp. 837-889.
5. For details, see Millennium Development Goals: India Country Report 2005. Government of India, Ministry of Statistics and Programme Implementation, Central Statistical Organisation, New Delhi, 2005.
6. Protective social security refers to measures concerned with sudden declines in living standards. Promotive social security refers to measures concerning the enhancement of living standards. For a full discussion, see Jean Dreze and Amartya Sen, ‘Public Action for Social Security: Foundations and Strategy’, pp. 1-40 in Ehtisham Ahmad, Jean Dreze, John Hills, Amartya Sen (ed), Social Security in Developing Countries, Clarendon Press, Oxford, UK, 1990. See also other papers in the volume.
7. Data are from ‘National Rural Health Mission (2005-2012): Mission Document’. Government of India, Ministry of Health and Family Welfare, New Delhi, 2005.
8. ‘India’s Poor Need a Radical Package: Amartya Sen’ (an interview), The Hindu, 9 January 2005, Chennai, India.
9. Levels of anaemia have declined in Chhattisgarh.
10. National Commission for Enterprises in the Unorganised Sector, Social Security for Unorganised Workers – Report, May 2006, New Delhi, 2006.
11. The bill seeks to cover close to 362 million unorganized sector workers – almost 91% of the total workforce of the country.