Social insurance in India encompasses government-managed programs designed to offer financial protection and welfare benefits to individuals facing various risks. These risks may include unemployment, illness, disability, old age, and maternity. Typically, these schemes are funded through mandatory contributions from both employers and employees.
The primary beneficiaries of social insurance schemes are employees within the organized sector, characterized by a formal employer-employee relationship. Recently, efforts have been made to expand coverage to workers in the unorganized and gig sectors, ensuring broader protection.
Several key schemes form the backbone of social insurance in India:
Social insurance schemes in India are primarily funded through mandatory salary deductions from employees, which are matched by employer contributions. This dual funding mechanism ensures the sustainability of the schemes.
The management of these programs is carried out by specialized organizations. The Employees’ Provident Fund Organisation (EPFO) oversees the EPF, while the Employees’ State Insurance Corporation (ESIC) administers ESI-related benefits.
The benefits of social insurance schemes are comprehensive and include:
Recent reforms and programs enhancing social security include:
Despite advancements, the social insurance system in India predominantly covers the organized sector. A considerable number of informal and gig economy workers continue to lack comprehensive protection. However, ongoing reforms aim to address these gaps and extend coverage.
Q1. What is the purpose of social insurance in India?
Answer: Social insurance in India aims to provide financial security and welfare benefits to individuals facing various risks, ensuring a safety net during challenging times such as unemployment or health crises.
Q2. Who primarily benefits from social insurance schemes?
Answer: The main beneficiaries are employees in the organized sector, but recent initiatives are also targeting workers in the unorganized and gig sectors to enhance coverage.
Q3. How are social insurance schemes funded?
Answer: These schemes are funded through mandatory contributions deducted from employee salaries, supplemented by matching contributions from employers, ensuring financial sustainability.
Q4. What are the major social insurance schemes available in India?
Answer: Key schemes include the Employees’ Provident Fund (EPF), Employees’ State Insurance (ESI), and the National Pension System (NPS), each providing various benefits to workers.
Q5. What challenges does India's social insurance system face?
Answer: A significant challenge is the inadequate coverage for informal and gig economy workers, leaving many without essential protections, although reforms are underway to address these issues.
Question 1: What is the main purpose of the Employees’ State Insurance (ESI) scheme?
A) Provide maternity benefits
B) Offer healthcare and sickness benefits
C) Fund retirement plans
D) Ensure unemployment support
Correct Answer: B
Question 2: Which organization manages the Employees’ Provident Fund (EPF)?
A) Ministry of Labour
B) Employees’ State Insurance Corporation
C) Employees’ Provident Fund Organisation
D) National Pension System Authority
Correct Answer: C
Kutos : AI Assistant!
