Expansion of India’s Social Security Coverage

Expansion of India’s Social Security Coverage

Context

India’s social protection framework has experienced a structural transformation over the last decade. Social security coverage has expanded from 25 crore beneficiaries (pre-2014) to 100 crore. The International Labour Organization (ILO) acknowledged a surge in India’s social protection coverage from 19% in 2015 to 64.3% in 2025 (covering over 94 crore citizens and ranking 2nd globally in total beneficiary count).

Key Pillars & Core Schemes

1. Key Government Initiatives

• Ayushman Bharat (AB-PMJAY): Over 39.94 crore Ayushman Cards issued, providing secondary and tertiary hospitalization cover up to ₹5 lakh per family per year.
• PM Garib Kalyan Anna Yojana (PMGKAY): Provides free food grains to over 80 crore beneficiaries, eliminating immediate food vulnerability and supporting income security.
• eShram Portal: Universal database for unorganized workers (30.68+ crore registered) providing a Universal Account Number (UAN) to streamline last-mile delivery of welfare schemes.
• Contributory Pensions & Micro-Insurance:
  • Atal Pension Yojana (APY): Guaranteed monthly pension for unorganized workers.
  • PMJJBY & PMSBY: Low-cost life and accidental insurance covers.
• Multi-Dimensional Poverty Reduction: Social security transfers have directly assisted 24.8 crore individuals in escaping multi-dimensional poverty over the past decade.

2. Legislative Reform: Code on Social Security (2020)

• Amalgamates 9 central labour statutes (including EPF Act, ESI Act, Gratuity Act, and Maternity Benefit Act) into a single code.
• Explicitly extends statutory social security benefits to gig workers, platform workers, and unorganized sector laborers.
• Establishes dedicated Social Security Funds financed via state pooling and platform aggregator contributions (1–2% of turnover).

Significance of Expanding Coverage

• Income Replacement & Poverty Mitigation: Prevents vulnerable families from falling into distress poverty due to old age, sudden wage loss, or economic shocks.
• Financial Protection against Catastrophic Health Expenditure: Health coverage reduces out-of-pocket expenditure (OOPE), safeguarding household savings.
• Formalization of Unorganized Labour: Digital registries like eShram bridge the divide between informal workers and formal welfare frameworks.
• Social Solidarity & Shared Responsibility: Contributory micro-insurance and pension schemes build a collective security net via broad-based pooling.

Core Challenges Facing India's Social Protection Framework

• High Level of Economy Informality: Over 85% of India’s workforce operates in the informal sector, creating operational difficulties in verifying wage records and enforcing social contributions.
• Demographic Ageing: The UN projects that the population aged 65 and above in the Asia-Pacific region will reach 18.6% by 2050, placing severe fiscal pressure on pension funds.
• Fiscal Constraints & Funding Gaps: Higher debt servicing obligations restrict government capital for non-contributory welfare expansion.
• Climate Transition Impact: Aggressive decarbonization policies and green transitions risk destabilizing employment in carbon-intensive industries (e.g., coal mining, thermal power).
• International & Inter-State Migrant Labor: Portability of social security benefits remains incomplete for cross-border and intra-country seasonal migrant workers.

Way Forward

• Operationalize the Code on Social Security: Accelerate notification of rules across remaining states to bring gig and platform workers under active statutory protection.
• Strengthen Data Pooling via eShram: Deepen integration between eShram, National Career Service (NCS), and state welfare databases to allow one-click access to social schemes.
• Transition to Sustainable Financing: Introduce innovative funding mechanisms (such as aggregator cess and public-private co-contributions) to relieve pressure on direct tax revenues.
• Ensure Just Transition Frameworks: Build targeted reskilling and social safety nets for workers affected by green energy and industrial transitions.

Conclusion

India’s expansion of social protection coverage from 19% to 64.3% marks an extraordinary shift toward universal welfare delivery. Consolidating these gains requires statutory enforcement under the Social Security Code, ensuring financial sustainability, and extending portable benefits to every informal and migrant worker in the country.