Social Security Schemes for Organised and Unorganised Sector

Social Security Schemes for Organised and Unorganised Sector


(GS PAPER-3, Indian Society

Source- Pib)


As per the Periodic Labour Force Survey (PLFS) which was recently carried out by the National Sample Survey Organisation of the Ministry of Statistics & Programme Implementation (MoSPI),  in the year 2017-18, the total employment in both sectors organized and unorganized in the country was near around  47 crores. Out of this, approximately 9 crores are engaged in the organized sector and the remaining 38 crores are vested in the unorganized sector.

The categories of these workers have been divided into three categories i.e.

  1. Establishments with 10 or more workers;

  2. Establishments with 20 or more workers;

  3. Workers engaged in unorganized sector

Key Highlights:

  • The ESI Act, 1948 is Social Security legislation that is applicable to all factories & notified establishments employing 10 or more persons, which are designated in ESI notified areas, and as such it is not applicable to the unorganized sector.

  • Employees who are earning wages up to Rs 21,000 per month (Rs 25,000/- in the case those persons with disability) are eligible under this ESI Scheme and are applicable to avail of all benefits provided under the ESI Act, 1948.

  •  In the present scenario, the ESI Scheme stands extended to 575 districts in 35 States and Union territories of India. 

  • The total number of Insured Persons covered under this ESI Scheme as of 31.03.2020 is approximately 3.41 crore and the total beneficiaries are approximately 13.24 crore. 

  • ESI contributions are at the rate of 4% should be paid by employers of which the employees or workers contribute to the extent of 0.75% of their wages and the employers contribute to the extent of approximately 3.25% of their wages. 

  • Such contributions make all benefits available under the ESI Act.

  • The benefits of these social securities to the workers employed in the organized sector establishments with 20 or more workers employed under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 are extended through the following three schemes:

  1. The Employees’ Provident Funds Scheme, 1952;

  2. The Employees’ Pension Scheme, 1995;

  3. The Employees’ Deposit Linked Insurance Scheme, 1976.

  4. The Employer and Employee both should have to make a contribution at the rate of  12% of wages towards the provident fund.

    •  Out of this, 8.33% is diverted towards the Pension Fund. Employers also contribute to the EDLI Scheme at the rate of 0.5 % of wages.  

    • During the year 2019-20, 4.89 crores members contributed under the Scheme.

For the workers engaged in the Unorganised sector, social security benefits will be provided through the Unorganised Workers’ Social Security Act,  of 2008. 

This Act will empower the Central Government to provide Social Security benefits to the unorganized sector workers by formulating suitable welfare schemes on matters which is relating to-

 (i) life and disability cover, 

(ii) health and maternity benefits,

 (iii) old age protection and

 (iv) any other benefit as may be determined by the Central Government.  


The State Governments are also empowered to formulate suitable welfare schemes on the matters regarding housing, provident funds,   educational schemes, skill upgradation, old age homes etc.

Download Plutus IAS Daily Current Affairs of 18th August 2021

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