Important Social Security Schemes in India (Part I)

By Saroj Singh|Updated : March 19th, 2020

The evolution of social security schemes was not very old though there were many initiatives in the ancient period to provide care for the poor and the needy. Social security was provided by individuals with a philanthropic motive or as part of the religious belief to give charity and relief for the poor. But there was no organized effort by the State in identifying the neediest and provide them with continuous support so that they can have a dignified life.

Important Social security Schemes in India (Part I) 

In India, since independence, the government has implemented several programmes as a social security program.  India is one of the largest democracies of the world, it adopted welfare state policy to fulfil these obligations. Social Security schemes were formulated with a belief that anyone who can get into risk and requires protection at any period of their life. 

Broadly, social security can be defined as the welfare schemes and issuance programmes provided by the state in the form of monetary benefits to the people who are vulnerable, dependent with less or inadequate income.  The programmes were mainly formulated against the contingencies of modern life to address the issues of sickness, unemployment, old age, disability, dependency, death etc.  The schemes/programmes majorly addressed the concerns of the rural and urban poor, agricultural labour, tribes by taking appropriate measures to ensure their livelihood, health, education, economic development, protection and empowerment of women, children, old age people and dependent from all vulnerabilities etc.

Let us discuss these schemes under each type of social security program:

  • Employment
  • Financial inclusion
  • Welfare measures
  • Pensions
  • Right to food

I. Social security measures related to Employment:

  1. Employee State Insurance Act, 1948

Major provisions

  • A company with 10 or more employees must be provided with financial reliefs like medical care, cash benefits on sick leaves, maternity benefits, death or disbursement.
  • The Act ensures the maternity and 75% of the salary can be claimed during the time of miscarriage or related sickness.
  • It also insists additional security of pregnant ladies not to dismiss from the job but only allow to punish.

2. The Employee Provident Funds and Miscellaneous Provisions Act, 1952

Major provisions

  • A company with 20 or more employees would avail terminal benefits to provident fund, superannuation provision, family pension etc.
  • The main objective is to provide security and safety to the employee and their family.
  • Central board is constituted by the govt in order to implement the scheme very effectively.
  • An Employee Provident Fund Appellate Authority is formed to deal with the grievances redressal system. 
  • The amendment in the year 2014 claims mandatory Employee Provident Fund to all employees who have a salary upto Rs 15,000/
  • Employee's contribution: 12% of Basic + Dearness Allowance
  • Employer's Contribution: 8.33% towards EPS and 3.67% towards EPF.

While on the job one can withdraw from EPF for the following purposes:

  • education fee
  • purchase of house or plot
  • repayment of existing home loan
  • repairs and alteration of the existing house
  • medical treatment
  • marriage expenses

3. The Employee Compensation Act, 1923

Major Provisions

  • An Act provides workmen’s family, a monetary benefit in case of death or serious injury.
  • This was amended in 2009 which fixed the benefits for the employee’s family (in case of the employee died). The compensation would be  from Rs 80,000 to Rs 1,20,000 and for permanent disability it is from Rs 90,000 to Rs 1,40,000.
  • It also specifies a reimbursement of medical expenditure amount to employees during the time of treatment.
  • A commissioner for workmen’s compensation should be appointed by the State Govt to settle all disputes related to the employee’s compensations.

 4. Maternity Benefit Act, 1962

Major Provisions

  •  An Act aims to provide some relief to Women employees during the time of pregnancy and delivery.
  • This Act is meant to benefit women working in a factory, mines, plantations etc.
  • This stipulates that women after the delivery or miscarriage shall not work for a period of a minimum of six weeks


  • The 2016 Amendment Act increased the maternity benefit from 12 to 26 weeks to first two surviving children and 12 weeks for the following children.
  • It also instructed a 12-week Maternity Benefit to a Commissioning Mother and Adoptive Mother.

 5. The Payment Gratuity Act, 1972

Major Provisions 

  • The Act provides 15 days of gratuity to the employees in working in factories, mines, oil fields, plantation, ports, railway, shops or other establishments each year who worked more than 5 yrs in a company having more than 10 employees.
  • In 2018, the Central govt had passed the Payment of Gratuity Bill 2017. According to this Act, the maximum ceiling of the benefit avail is increased from Rs 10 Lakhs to a flexible amount according to the increase in pay scale by the govt.

6. Employment Pension Scheme

Major Provisions

  • The Act came into existence in 1995 with a view of providing retirement support to employees.
  • An employee affected with a permanent disability is also endorsed to a pension during the service time.
  • The pension benefit is available to the family after the death of the employee.
  • With an amendment in 2014, it ensured a minimum of Rs 1000/ to all employees working in a company, Rs 250/ for children pensioners and Rs 750/ to orphan pensioners.
  • This amendment also made a contributory system of Pension in which 12% of the salary can be contributed by the employee in EPF scheme while the employer would contribute a matching percentage to EPF.
  • 1.16% of pay is paid by the govt to this account will finally be remitted 8.33% by the employer to the employee.

Apart from the Social Security Schemes to secure employment of the vulnerable section, the govt.  has very progressively started many employment generation initiatives in India. The details regarding some of these programmes will be covered in the subsequent articles.

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