National Social Security Board in India: Roles, Powers, and Social Security Schemes for Unorganized Workers

Introduction

India’s labor landscape presents a unique challenge where approximately 93 percent of the workforce operates within the unorganized sector, comprising around 437 million workers who historically lacked access to basic social security protections.[1] The absence of formalized employment relationships left these workers vulnerable to economic shocks, health emergencies, and old-age insecurity. Recognizing this critical gap in social protection, the Indian Parliament enacted the Unorganised Workers’ Social Security Act, 2008, which received Presidential assent on December 30, 2008.[2] This legislation marked a watershed moment in India’s social security architecture by establishing the National Social Security Board as the primary institutional mechanism for recommending and monitoring welfare schemes tailored to the diverse needs of unorganized workers.

The Act came into force on May 16, 2009, through a notification issued by the Ministry of Labour and Employment.[2] Following the enactment, the National Social Security Board was formally constituted on August 18, 2009, bringing together representatives from workers, employers, civil society, and government to forge a coordinated approach toward social security coverage.[3] The Board’s establishment represented the government’s commitment to addressing the long-standing demands of labor unions and social activists who had campaigned for decades to extend social security benefits beyond the organized sector.

Legislative Framework and Definitions

The Unorganised Workers’ Social Security Act, 2008 provides the foundational legal framework for protecting unorganized workers in India. The Act defines an “unorganised worker” as a home-based worker, self-employed worker, or wage worker in the unorganized sector, and includes workers in the organized sector who are not covered by existing labor legislation mentioned in Schedule II of the Act.[2] This definition encompasses domestic workers, street vendors, agricultural laborers, construction workers, and numerous other categories of workers who operate outside formal employment structures.

A “home-based worker” under the Act means a person engaged in the production of goods or services for an employer in his or her home or other premises of choice, excluding the employer’s workplace, for remuneration, regardless of whether the employer provides equipment or materials.[2] The definition of “self-employed worker” includes individuals engaged in any occupation but excludes those covered under the organized sector provisions. A “wage worker” refers to a person employed for remuneration in the unorganized sector, directly by an employer or through a contractor, irrespective of the place of work, whether in cash or kind, and includes home-based workers, temporary workers, casual workers, migrant workers, and domestic workers.[2]

The Act established a dual-board structure consisting of the National Social Security Board at the central level and State Social Security Boards in each state. This federal structure ensures that social security schemes can be designed and implemented with appropriate consideration of regional variations in workforce composition, economic conditions, and administrative capacities. The legislation also provided for the creation of worker facilitation centers to disseminate information about available schemes and assist workers in accessing benefits.

Composition and Structure of the National Social Security Board

The National Social Security Board constitutes a tripartite body that brings together multiple stakeholders to ensure balanced representation in policy formulation. According to Section 5 of the Unorganised Workers’ Social Security Act, 2008, the Board is chaired by the Union Minister for Labour and Employment, with the Director General (Labour Welfare) serving as Member-Secretary.[2] Beyond these two ex-officio positions, the Central Government nominates thirty-four additional members representing diverse constituencies.

The nominated membership includes seven representatives from unorganized sector workers, ensuring that the voices of beneficiaries directly influence policy decisions. Seven representatives from employers of unorganized sector workers provide the perspective of those who engage informal labor. Seven eminent persons from civil society contribute independent expertise and advocacy perspectives. The Board also includes three members of Parliament, with two from the Lok Sabha and one from the Rajya Sabha, creating a legislative link that facilitates policy coordination. Five members represent Central Government Ministries and Departments concerned with social security, while five members represent State Governments, ensuring federal coordination.[2]

The Act mandates adequate representation for persons belonging to Scheduled Castes, Scheduled Tribes, minorities, and women within the Board’s composition. This affirmative action principle recognizes that marginalized communities face compounded vulnerabilities in the unorganized sector and require specific attention in policy design. The term of the National Board is set at three years, and the Board is required to meet at least three times annually to discharge its functions effectively.[2]

Members of the Board serve on terms and conditions prescribed by the Central Government, which also determines the procedure for filling vacancies and conducting Board meetings. The Board may receive prescribed allowances for attending meetings, though the exact amounts and conditions are determined through separate rules. This structure aims to balance efficiency in decision-making with comprehensive stakeholder engagement.

Powers and Functions of the National Board

The National Social Security Board exercises advisory and monitoring functions rather than executive powers, positioning it as a policy recommendation body that influences government decision-making. Section 5(8) of the Act enumerates seven core functions that define the Board’s mandate.[2] First and foremost, the Board recommends to the Central Government suitable schemes for different sections of unorganized workers, taking into account the diverse needs of home-based workers, self-employed individuals, and wage workers across various occupations and regions.

The Board advises the Central Government on matters arising from the administration of the Act, providing technical expertise and stakeholder perspectives on implementation challenges and policy refinements. It monitors social welfare schemes for unorganized workers administered by the Central Government, conducting periodic reviews to assess coverage, effectiveness, and gaps in service delivery. The Board reviews the progress of registration and issuance of identity cards to unorganized workers, which serve as the gateway to accessing various social security benefits.

Additionally, the Board reviews record-keeping functions performed at the state level, ensuring that data systems accurately capture worker information and scheme participation. It examines expenditure from funds allocated under various schemes, promoting financial accountability and efficient resource utilization. Finally, the Board undertakes any other functions assigned to it by the Central Government from time to time, allowing for flexibility in responding to emerging needs.[2]

The advisory nature of the Board’s functions has been subject to criticism from labor advocates who argue that the lack of binding decision-making authority limits its effectiveness. The government retains discretion to accept or reject Board recommendations, which can delay implementation of worker-friendly initiatives. However, the Board’s composition and mandate create a structured platform for stakeholder dialogue and evidence-based policy development that did not exist previously.

State Social Security Boards

Complementing the National Board, the Act requires every State Government to constitute a State Social Security Board to exercise powers and perform functions at the state level.[2] The composition and functions of State Boards mirror those of the National Board, with appropriate modifications to reflect state-level governance structures. State Boards are chaired by state labor ministers or designated officials and include representatives of state government departments, state legislators, and local representatives of workers, employers, and civil society.

State Boards meet at least once per quarter and follow prescribed rules of procedure for transaction of business. Their primary function is to recommend state governments in formulating suitable schemes for different sections of unorganized workers within their jurisdiction. State Boards also monitor scheme implementation, facilitate coordination among various state departments involved in social security delivery, and maintain liaison with the National Board to ensure policy coherence.

The federal structure recognizes that labor markets and social conditions vary significantly across Indian states. States with large agricultural populations face different challenges than industrialized states with concentrated urban informal sectors. State Boards can tailor recommendations to local conditions while maintaining alignment with national policy objectives. This flexibility is essential given India’s diversity in economic development, demographic patterns, and administrative capacities across states.

Registration and Eligibility

The Act establishes a registration system as the foundation for delivering social security benefits to unorganized workers. Section 10 specifies that every unorganized worker who has completed fourteen years of age is eligible for registration, subject to providing a self-declaration confirming their status as an unorganized worker.[2] This age threshold aligns with constitutional provisions regarding the minimum age for employment in hazardous occupations, though it has raised concerns about excluding younger workers engaged in certain informal activities.

Registration is conducted at the district level, with District Administrations responsible for verifying applications and issuing identity cards. The identity card serves as proof of registration and entitles the holder to access social security schemes. The card contains biometric information and a unique identification number linked to central databases. Worker facilitation centers established under the Act assist workers in completing registration formalities, processing applications, and forwarding them to district authorities.

The registration system faces practical challenges in reaching mobile workers, migrants who cross state boundaries, and workers in remote areas with limited administrative infrastructure. The reliance on self-declaration, while reducing bureaucratic barriers, also creates potential for inclusion errors where non-eligible persons might register. Balancing accessibility with accuracy remains an ongoing challenge in the registration process.

Social Security Schemes Under the Unorganised Workers’ Social Security Act, 2008

The Unorganised Workers’ Social Security Act, 2008 provides the legal framework for delivering multiple categories of social security benefits, including life and disability cover, health and maternity benefits, old age protection, and any other benefits determined by the government.[2] The Act does not itself create specific schemes but empowers the Central Government to formulate and notify schemes suitable for different worker categories. Section 3 specifies that the Central Government may formulate and notify schemes relating to life and disability cover, health and maternity benefits, old age protection, and other benefits for unorganized workers.[2]

Following the enactment, the National Social Security Board recommended extending three major existing schemes to unorganized workers: Rashtriya Swasthya Bima Yojana (RSBY), Janshree Bima Yojana (JBY), and old age pension schemes.[3] The RSBY scheme, launched in October 2007 and operational from April 1, 2008, provides health insurance coverage to below poverty line families in the unorganized sector.[4] The scheme offers hospitalization coverage up to thirty thousand rupees per family per year on a family floater basis covering up to five members.[5]

RSBY introduced smart card technology for delivering health insurance, using biometric-enabled cards containing fingerprints and photographs of beneficiaries. This innovation addressed identification challenges in populations lacking formal documentation. The scheme provides cashless hospitalization at empaneled public and private hospitals, giving beneficiaries choice in healthcare providers. By February 2014, RSBY had enrolled 36 million families, demonstrating significant reach despite implementation challenges.[5]

Janshree Bima Yojana provides life insurance coverage to persons below the poverty line, offering death and disability benefits at subsidized premium rates. The scheme aims to provide financial security to families of deceased workers and support disabled workers who lose earning capacity. Old age pension schemes address income security for elderly workers who lack retirement savings or formal pension coverage. The Indira Gandhi National Old Age Pension Scheme, operating under the National Social Assistance Programme, provides monthly pensions to elderly persons from poor households.

Beyond these schemes recommended by the National Board, the government operates numerous other programs that benefit unorganized workers, though they may not be explicitly framed as social security schemes under the 2008 Act. These include the Pradhan Mantri Jeevan Jyoti Bima Yojana offering life insurance coverage of two lakh rupees at an annual premium of four hundred thirty-six rupees, and the Pradhan Mantri Suraksha Bima Yojana providing accidental death and disability coverage at a premium of twenty rupees annually.[6]

The Mahatma Gandhi National Rural Employment Guarantee Act provides employment security through guaranteed wage employment for rural households. Although not designed exclusively for unorganized workers, it serves as a critical social security instrument providing income support during periods of unemployment or underemployment. Similarly, the Public Distribution System under the National Food Security Act provides food security, while housing schemes like Pradhan Mantri Awas Yojana address shelter needs.

Regulation and Monitoring Mechanisms

The regulatory framework established by the 2008 Act relies primarily on administrative oversight rather than statutory enforcement mechanisms with penalties. The Act does not create labor inspectors or enforcement officers with powers to penalize non-compliance. Instead, it focuses on enabling access to voluntary schemes and monitoring their implementation through the Board structure. The Central Government exercises regulatory authority by framing rules under Section 14 of the Act, which must be laid before Parliament for scrutiny.[2]

The Unorganised Workers’ Social Security Rules, 2009 operationalize various provisions of the Act, prescribing procedures for Board composition, meeting conduct, registration processes, and scheme design parameters. These rules provide detailed guidance on administrative procedures while allowing flexibility for scheme-specific regulations. Each social security scheme notified under the Act contains its own operational guidelines specifying eligibility criteria, benefit levels, contribution requirements, and claim procedures.

Monitoring functions distributed across multiple levels create a system of checks intended to ensure accountability. The National Board monitors centrally-administered schemes, State Boards monitor state-level implementation, and district authorities oversee registration and benefit delivery at the local level. This multi-tiered monitoring creates information flows that theoretically enable identification of implementation gaps and corrective action.

However, the monitoring system faces significant limitations in practice. The advisory nature of Boards means they lack authority to compel corrective action when they identify problems. Coordination challenges between multiple government ministries administering different schemes fragment accountability. Data systems often lack interoperability, making it difficult to track individual workers across multiple schemes or identify gaps in coverage. These structural weaknesses limit the effectiveness of monitoring mechanisms.

Transition to the Code on Social Security, 2020

The Social Security Code, 2020 represents a fundamental restructuring of India’s social security legislation. Enacted by Parliament in September 2020 and receiving Presidential assent on September 28, 2020, the Code consolidates nine existing laws including the Unorganised Workers’ Social Security Act, 2008, into a unified legal framework.[7] The Code aims to extend social security to all employees and workers in organized, unorganized, and other sectors while simplifying administration through digital systems and Aadhaar linkage.

Section 142 of the Code, which came into force on May 3, 2021, marks the formal repeal and replacement of the previous legislation.[8] The Code maintains the institutional structure of National and State Social Security Boards while expanding their mandate to cover gig workers and platform workers alongside traditional unorganized workers. The definition of unorganized workers under the Code follows similar principles as the 2008 Act but introduces new categories reflecting the changing nature of work in the digital economy.

The Code establishes social security funds to be maintained by Central and State Governments for unorganized workers, gig workers, and platform workers. Funding for schemes may come from government contributions, employer contributions, and worker contributions depending on scheme design. For platform workers, the Code requires aggregators to contribute between one to two percent of their annual turnover to a social security fund, creating a new financing mechanism for emerging forms of work.[7]

Registration provisions under the Code require self-declaration by unorganized workers and provide for Aadhaar-based registration to enable portability of benefits. The Code envisions a unified database of registered workers that can interface with multiple social security schemes, reducing duplication and enabling workers to access benefits regardless of their location within India. However, full implementation of the Code awaits notification of remaining provisions and framing of comprehensive rules by the Central Government.

The transition from the 2008 Act to the 2020 Code raises important questions about continuity of existing schemes and protection of acquired rights. Workers registered under the previous system must be seamlessly transitioned to the new framework without loss of benefits or disruption in service delivery. The draft rules circulated in November 2020 provide some guidance on transition mechanisms but leave many operational details to be worked out through subsequent notifications and circulars.

Judicial Interpretation and Case Law

Judicial intervention has played a crucial role in interpreting social security legislation and enforcing rights of unorganized workers when administrative mechanisms prove inadequate. In Delhi Jal Board v. National Campaign for Dignity and Rights of Sewerage and Allied Workers, the courts examined the responsibilities of state agencies toward workers employed through contractors for hazardous work.[9] The judgment emphasized that neither lawmakers nor implementing agencies had established appropriate mechanisms for protecting persons employed by or through contractors for dangerous work outsourced by state agencies.

The judiciary recognized that constitutional mandates for social security require not just legislative frameworks but effective implementation mechanisms with adequate resources and institutional capacity. Courts have directed governments to take necessary steps for protecting rights of unorganized workers and implementing social security welfare schemes. This activist approach fills gaps left by weak enforcement provisions in the legislation itself.

However, judicial intervention has limits in addressing systemic challenges of social security delivery. In one case, the Supreme Court dismissed a public interest litigation seeking directions to compensate financial losses of unorganized sector workers during the COVID-19 pandemic, recognizing the complexity of providing universal relief and the separation of powers between judiciary and executive in policy matters.[9] This illustrates that courts balance their role in enforcing rights with recognition of institutional capacities and democratic accountability in resource allocation decisions.

The judiciary’s role in social security jurisprudence continues to evolve as courts grapple with balancing justiciability of social and economic rights against concerns about judicial overreach in policy domains. Cases involving unorganized workers often raise fundamental questions about the state’s obligations under the Directive Principles of State Policy in the Constitution, particularly Articles 41, 42, and 43 relating to work, living wages, and conditions of work.

Implementation Challenges and Critical Assessment

Despite the legislative framework and institutional mechanisms established by the 2008 Act, implementation of social security for unorganized workers faces persistent challenges that limit coverage and effectiveness. Even twelve years after enactment, only six percent of unorganized workers were covered under any form of social security, according to Parliamentary Standing Committee findings.[9] This stark gap between legislative intent and ground reality reflects multiple structural and operational barriers.

Registration remains incomplete, with many eligible workers unaware of schemes or unable to navigate registration processes. Mobile and migrant workers face particular difficulties establishing stable relationships with district authorities for registration and benefit access. The requirement for documentary proof of identity, residence, and employment status creates barriers for populations lacking formal documentation. While self-declaration simplifies some aspects, it does not address underlying documentation challenges for accessing benefits.

Scheme design often reflects bureaucratic convenience rather than worker needs, with coverage gaps, low benefit levels, and cumbersome claim procedures deterring participation. The multiplicity of schemes administered by different ministries creates confusion and administrative fragmentation. Workers must navigate separate registration and enrollment processes for health insurance, life insurance, pension schemes, and other benefits, increasing transaction costs and reducing take-up rates.

Financing remains a fundamental constraint, with limited budgetary allocations preventing expansion of coverage and benefit levels. The reliance on contributory schemes excludes the poorest workers who cannot afford premiums, even subsidized ones. The lack of employer contributions in most schemes for unorganized workers reflects the difficulty of identifying and regulating employers in informal employment relationships. This contrasts sharply with social security financing in the organized sector where employer contributions form a major funding source.

Monitoring and accountability mechanisms prove weak in practice, with Boards lacking authority to enforce recommendations and governments facing limited political pressure to prioritize unorganized worker welfare. Data systems remain inadequate for tracking coverage, identifying gaps, and evaluating scheme effectiveness. The absence of strong worker organizations in most unorganized sectors reduces collective bargaining power and political voice, allowing governments to under-invest in social security without facing organized resistance.

Conclusion

The Unorganised Workers’ Social Security Act, 2008 and its successor, the Code on Social Security, 2020, represent important milestones in India’s journey toward universal social security coverage. The establishment of the National Social Security Board created an institutional platform for stakeholder dialogue and policy coordination that previously did not exist. The Board’s tripartite composition and federal structure reflect principles of inclusive governance and recognition of India’s diversity.

However, significant gaps persist between legislative frameworks and lived realities of unorganized workers. Low coverage rates, limited benefit levels, and implementation challenges demonstrate that creating legal entitlements alone does not guarantee effective social protection. Addressing these challenges requires sustained political commitment, adequate resource allocation, administrative capacity building, and empowerment of worker organizations to demand accountability.

The transition to the Social Security Code, 2020 presents opportunities to address some structural weaknesses of the previous system through integrated databases, Aadhaar-based portability, and inclusion of gig and platform workers. However, realizing these opportunities depends on effective implementation of enabling rules, investment in digital infrastructure, and continued engagement with worker representatives in scheme design and monitoring.

Ultimately, social security for unorganized workers must be understood not as charity or welfare but as a fundamental right rooted in constitutional values of dignity, equality, and justice. Achieving this vision requires transforming social security from a fragmented collection of voluntary schemes into a comprehensive system of universal entitlements backed by adequate resources, effective administration, and meaningful accountability mechanisms.