The central government is working on the blueprint for a social security scheme that is specifically aimed as a safety net for workers in the informal labour sector.

The draft social security code, drafted by the Ministry of Labour & Employment, aims for universal coverage that includes those who are outside the ambit of the EPFO and the ESIC. The scheme envisages mandatory pension, insurance against disability and death, and maternity coverage, alongside optional medical and unemployment coverage.

Consultations are on with states to bring them on board for part-financing the scheme, which could be launched later this year around the time of key state elections and ahead of the upcoming 2019 general polls.

“At the present moment, in both EPFO and ESIC, the employer contributes and equal amount is contributed by the employee also. If you are covering the entire population, there will be one segment which will not be able to contribute at all. Now, for the segment below the poverty line, the government plans to foot the entire bill, in which case it has to be shared between the states and the Centre. So we need to bring the states on board,” a senior labour ministry official said.

The proposal is being circulated among various ministries and the states. On the funding for the scheme, the official indicated that while work is underway to peg an upfront cost for the scheme, the funding for the rollout of the scheme could subsume the allocation for a number of existing schemes.

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