Appeared on Monday 11 August 2025 | Indian Express | New Delhi Edition
Election-bound Bihar has just announced a generous pension hike from 400 Rs to 1,100 Rs for its elderly, widowed, and disabled citizens. Come election season, such announcements are not just expected but also eagerly anticipated. The trend of populist welfare is Global, and India is no exception. Though these political philanthropies provide short-term income support, they also raise a fundamental question: Should India remain trapped in fragmented, populist welfare politics, or is it time to build a unified, rights-based, and economically sustainable social security system that fuels the economy and not burns it? Can the “Digital India” ecosystem be leveraged to deliver smart social security governance that empowers and uplifts? The answer is important for the future of over half of India’s population, who are under the age of 28 and aspire to live a developed nation dream, and about one-fifth of the elderly population, who will need support by 2047.
Preference for Doles Over Design
ILO Director-General recently lauded ‘cash and non-cash protection schemes of India in laying out a robust social protection framework that covers 64.3% i.e. 92 crore people as per ILO-Stats 2025. ILO hailed India as “a model for the rest of the world” and “inspiration for other nations to improve their own social protection systems”. Ongoing ILO-Phase II survey for India reveals that it has surpassed 100 crore beneficiary figures. This milestone is the cumulative result of numerous schemes launched by both the Central and State Governments, notably Ayushman Bharat, PM Ayush Yojana, PM-GKAY, the e-Shram portal, PM-Atal Pension Yojana (PM-APY), and PM-SVANidhi, among others. According to one estimate, there are over 34 major social protection schemes, 24 pension schemes, and several independent welfare initiatives by States.
The International Labour Organization's (ILO) World Social Protection Report (2021) initially estimated India's coverage at 24.4%, only later adjusting it to 48.8% after the Government highlighted the extent of state-level programs. When even the ILO gets messed up with data, imagine the mesh citizen’s face when looking for their scattered entitlements. While these schemes have undoubtedly made impact, their full potential remains untapped in the absence of coherence, ease of reach, and cross-scheme interoperability.
Blame it on competitive populism, India’s social security governance faces the risk of being shaped more by short-term political adventures than development of a long-term sustainable social protection system.
Hurdles for a national system
Towards meeting the political and economic goals, it is crucial that these schemes not only support citizens in isolation but also help build their capacity to contribute to the economy today and drive the future growth. Currently India’s amorphous and unorganized social security ecosystem is a salad of constitutional mandate, political expediency and international commitments. The ILO’s underestimation of the total social protection coverage highlighted the need for integrated data, prompting the launch of India’s Social Protection Data Pooling Exercise in March 2025. The Labour & Employment Ministry has identified several states i.e. Uttar Pradesh, Rajasthan, Maharashtra, Madhya Pradesh, Tamil Nadu, Odisha, Andhra Pradesh, Telangana, Karnataka, and Gujarat for data consolidation at the Central level.
While the data integration exercise progresses, the pressing challenge, however, is about optimizing scattered schemes. This includes eliminating duplications, identifying the right beneficiaries, and investing in capacity building and market ready skill sets of our working population to grow the pie, rather than compete over its pieces. A related challenge is the need to reimagine direct transfers not as isolated, consumptive payouts, but as self-multiplying instruments, where one entitlement has the potential to unlock access to others. For example, could pension benefits be extended to include education allowances for grandchildren of the elderly? The ILO recognizes this principle of integrated social protection, one that goes beyond poverty alleviation to include capacity development and contribution-based sustainability.
Considering that the G-20 New Delhi Declaration calls for “sustainably financed universal social protection coverage,” a unified umbrella under “One Nation, One Social Security governance” presents a promising path forward. It can address current inefficiencies of avoidable administrative costs, duplication, and beneficiary targeting, to make the best of the scarce fiscal resources, simultaneously sparing citizens from running between various units of the Government separately for registrations and benefits. For instance, E-Shram registrations are meant for unorganized workers and EPFO registrations largely cover formal employment competing and filtering where the boundaries blur or overlap. Specified eligibility conditions and lack of interoperability often denies simple benefits envisaged by the Legislators. More complexity is added when similar benevolent legislations like the BOCW Act 1996 also jump to offer similar services to this class of workers. A closer look at many State government schemes shows they often repackage existing benefits under new names, offering little differentiated value.
Learning from international experiences
In its report ‘Successful Social Protection Floor Experiences’ (2011), ILO found several examples like Mexico’s ‘Vivir Mejor’ program to illustrate how integrated national strategy and framework was useful to provide universal social assistance and develop basic capabilities of citizens. Mexico, like India, is a country of great contrasts. Similarly, Brazil’s ‘The Fome Zero’ program brought Unified System of Social Assistance (SUAS) that regulates and organizes social assistance service network in all 26 States, Federal District and 5,564 municipalities. This body runs world famous Bolsa Família’ cash transfer scheme. Ecuador stands out as exemplar for India where multiple social protection schemes existed for decades resulting in sub-optimum coverage and expenditure overload. Ecuador, in 2008 mustered political courage to introduce a constitutional law for inalienable social right and pooled all its multiple schemes under one Umbrella of Ecuadorian Social Security Institute (IESS) to oversee, coordinate and administer its multiple schemes. South Korea faced similar challenges in the 1990s and responded by consolidating welfare programs under institutions like the National Pension Service and the National Health Insurance Service. This not only reduced the burden on the Government but also improved service delivery. A similar transition in India where citizens progressively secure pensions, insurance, and healthcare through contributory mechanisms would free up limited government resources to focus on the truly marginalized and on schemes that promote labour skilling and reskilling to capture demographic dividends in time.
One Government approach
The idea of One Government approach is a food for thought. It moves away from silos, shifting the focus to “collective Outcomes” through a whole-of-government coordination. Collaboration, integration, and coherence are its mantras. It is time to put to best use of Digital India Stack, Aspirational Districts Programme and building on experiences from programs like PM-Gati Shakti. Eliminating overlapping schemes, creating a unified registry, ensuring seamless service, and enabling quick grievance redressal will be its advantages.
This perspective finds place in the ILO Convention-152. The convention highlights that functions of social security is to fight contingency i.e sickness, maternity, paternity, occupational hazards, dismissal indemnity, unemployment, old age, invalidity, disability and death’ and to develop basic capacity. Our constitution through DPSP though also provisions for nearly all public assistance covered under Convention-152. Its manner of delivery, however, needs reimagining.
Central legislations like Employees’ Provident Funds & Miscellaneous Provisions Act, Employees’ Compensation Act, ESIC Act, BOCW, Maternity Benefit Act provide security to working segments across federal boundaries. Our constitution empowers States too, to frame similar schemes in their own spheres. EPFO one of the central institutions has been leading a social security ecosystem pan India cutting boundaries since decades. It currently maintains around 30 crores accounts with some 8 crores actively contributing. The Cabinet on 1st July 2025 has approved roll out of Employment Linked Incentive Scheme to enhance job creation, employability and social security in all sectors targeting about 3.5 crore jobs in two years. It has chosen EPFO as the vehicle, trusting its capacity at scale. Last financial year, EPFO settled more than 5 crore claims. ESIC similarly is another pillar that delivers at scale. These institutions can be strengthened to mimic Ecuadorian IESS to transition to One Governance System for onboarding welfare measures where the States are partners in adding value as top up rather than reinventing the wheel for small time political gains. In this manner, the model may also pass the scrutiny of our constitutional federalism. Apart from domestic needs our diaspora also needs support to consolidate their social security rights as they switch between domestic and international assignments in the Global world. Towards this India has entered in 20 bilateral social security agreements and EPFO has been roped in for service delivery as the nodal agency.
Towards Smart Social Security
Our collective resolve to be ‘Viksit Bharat’ by 2047 depends upon several factors. One of them is financial security during sunset days, that is gracefully earned and not sought in distress. For this a coordinated governance structure which though is developing, needs to be fast forwarded. The cash transfers planned by any unit of the Government be it the states or the centre can be routed through say UAN of EPFO. A certain percentage of such ‘transfers’ can be used for Provident Fund, Pension and Insurance. Such contributions have the potential to defer immediate consumption towards building many meaningful self-chosen areas of reskilling or education, pooling all social transfers in one basket. As a caution, any move towards a unified social security governance model, must be federated, flexible, and incentive driven with autonomy to factor unique social realities through a plug and play model supported by digital infrastructures of Aadhaar, UAN, and E-Shram. This will offer structural unity furthering both ease of living and ease of governance. Like the GST rollout, the Centre could offer performance-linked fiscal incentives to encourage state participation.
Through bold political consensus, this transition can become one of India's most transformative governance reforms since independence, offering citizens not just entitlements, but long-term economic dignity and economic security. Whether India's political leadership and indeed, its electorate, are ready for this shift remains the key question.
https://indianexpress.com/article/opinion/columns/why-india-needs-a-unified-welfare-state-10181724/