MBA management

Introduction and Meaning of Social Security


In the present time insecurities of life has increased to great extent and to safe guard the individual and the society from these uncertainties. “Social Security” has become very essential. Today’s society is facing a situation which has been never known before and is full uncertainties of life. Social security is a wise investment which produce good returns in the long run. It is security that society furnishes through appropriate organizations, against certain risks to which its member are exposed. These risks are all those contingencies against which the individual of small means cannot effectively provide from its limited means.

The idea behind the concept of social security is that the state shall be responsible for protecting its citizens against certain contingencies of life. There is no such definition of social security which may be country to country according to the prevailing social legislations, traditions ideals.

The basic principle of social security implies collective action by the community to help a member against misfortunes and wants he cannot meet with his own resources. It is based on business ethics “ideals of human dignity and social justice”.

Social security is the security that society furnishes through appropriate organizations against certain risks to which its members are exposed.

Broadly speaking the idea of social security is that “The state shall make itself responsible for ensuring a minimum standard of material welfare to all its citizen on a basis wide enough to cover all contingencies of life from womb to the tomb.

According to ILO “Social security is the protection which society provides for its members through a series of public measures against the economic and social distress resulting from sickness, maternity, employment injury, unemployment, invalidity, old age and death. These measures are also of a great importance to a country which is on the way of large scale industrialization as they improve employee’s morale by providing sense of security to them again various industrial hazards.”

In fact social security is an attack on five “Giants” namely Want, Disease, Ignorance, Squalor and illness. Security against giant of “squalor” mean security against all those evils which come through the unplanned and unorganized growth of cities. The ultimate aim one’s economic and political protection. It is to protect the poor and to ensure that they have an acceptable standard of living.

Definition of Social Security


Different authorities, organizations and Acts have defined the concept of social security in the following ways:

(i) “Social security is the security that the state furnishes against the risks which an individual of small means cannot stand the risks which an individual of small means cannot stand up by himself or even in private combination with his fellows.” -------------Late president Mr. V.V. Giri

(ii) “Social Security is a program of protection provided by society against the contingencies of modern life like-sickness, unemployment, old age, industrial accident against which the individual cannot be expected to protect himself and his family by his own ability and foresightedness.” -------------Fridlander

(iii) “By social security we undertake a programme of protection provided by society against those contingencies against which the individual of small means cannot effectively provided by his own ability and foresight.” -------------International Labour Organization

(iv) “Social security is an attack on five giants namely want, disease, Ignorance, Squalor and illness.” -------------Sir William Devergidge

(v) “Social security is a controversial and dynamic subject with various facets, philosophical, theoretical, humanitarian, financial, administrative, social, economic, political, statistical, medical and legal.” -------------Weher and Cohen

(vi) “Social security is a protection provided by society against those contingencies of life such as sickness, unemployment, old age, industrial accident against which the individual cannot be expected to protect himself and his family by his own ability or forsightedness.” -------------Maurie Strack

Social Security is a fundamental task of a state and it is right of a citizen to enjoy this security.

It is quite clear from the above mentioned definitions that in a democratic and welfare state, social security against law and order. It is social justice of the state. We cannot think about any progress of society so long as certain measures are not available to citizens.

Features of Social Security

Social security provides financial helps in case of contingencies such as unemployment, maternity, industrial disease, old age and death etc.

From the analysis of these above mentioned definitions one can identify the following features of social security.

(i) Social security in some countries is applied to all governmental programmes and in some countries it is applied only to Social Insurance programme.

(ii) It covers wide variety of health and welfare schemes, the coverage of social security is very wide meeting the different contingencies of an employee member.

(iii) Social Security is a dynamic concept and its coverage changes with social, economic and political system prevailing in a given country at a given time.

(iv) A comprehensive scheme of social security consist of “Social Insurance and social assistance".

(v) The modern social security scheme is the integration of its two important elements of social insurance and social assistance and covering of all social risks.

(vi) Social security must provide protection against all the ordinary risks of life and as well as special risks of employment.

(vii) It should bring under protection all member workers by hand and brain who live solely by their mere earnings.

(viii) All social security programme although differ from country to country but they aims at providing some form of cash payments to individuals to individuals to replace at least a part of the lost income that occurred due to any such contingencies.

(ix) It provides financial helps in case of contingencies such as unemployment, maternity, work injury, industrial disease, old age, widowhood and orphan hood etc.

(x) Under social security the members of a particular category are offered safeguards and benefits such as medical and financial and to injured and financial help to widows, orphans and educational assistance in the form of scholarship and free ships to the needy students.

Approaches of Social Security


“Social Security is a dynamic concept considered in all the advance countries of the world as an indispensable chapter on all national programmes to strike at the root of poverty, unemployment and disease, it was considered most essential for industrial workers’ as stated by R.C. Saxena.

The different comprehensive schemes on social security schemes on social security and labour welfare would help in boosting the industrial morale and efficiency and is an indispensable means to production and productivity.

A program of social security would lead the way to a new and better life for masses in India. The different comprehensive schemes on social security and labour welfare would keep industrial morale and efficiency and is an indispensable means to production and productivity.

Broadly speaking the approaches of social security are three fold in nature:

(i) Compensation
(ii) Restoration
(iii) Prevention

(i) Compensation means income security during spell of risks because the individual and his family not be subjected to a double calamity involving both destitution and loss of life, health and work. Under worker compensation, workers are compensated in case of any permanent disability reducing permanently or temporary earning capacity of aggrieved employee. It is compensating a suffered employees due to contingencies and unexpected mishaps by providing financial support.

(ii) Restoration. It means giving individuals and their families the confidence that their level of living and quality of life will not suffer as far as possible due to any social and economic loss. “It aims at restoring the previous social and economic status of the employee by providing financial and social help under different provisions of social security Acts. Due to restoration of one’s previous status financial position the self- confidence and self-esteem of the employee can be maintained.”

Restoration mean reemployment and providing self-confidence through cure of sick/injured employees.

(iii) Prevention. Social Security is a basic instrument of social and economic justice among members of the society.” It not only aims at compensation and restoration of one’s financial and social status; it further aims prevention of mishaps, industrial injury and occupational diseases.

Prevention aims at avoiding loss of productive capacity due to sickness i/injure or Unemployment.

Factory Act, Industrial safety Act and worker’s Compensation Act are helpful in the preventions of different Industrial hazards leading to injury and occupational diseases. Prevention is better than cure.”

Objectives of Social Security

Social security is of great importance to developing and underdeveloped countries which aims at large scale rapid industrialization. It helps in improving morale of employees by providing sense of security to them against various industrial hazards, occupational diseases and any other types of unfair practices.

“The State shall within the limits of its economic capacity and development make effective provision for securing public assistance in case of unemployment, old age, sickness, disablement makes the concept of social security of high importance to the country.”

From its modest beginning in the 20th century. Social security in the present 21st century has become a fact of life for millions of people throughout the world. In some countries it includes only economic security while in other countries it covers wide different fields of social security. It has now widely influenced by the economic and social policies of all the developed and developing countries.

These are some of the important objectives of social security

(i) Access to social security is a fundamental human right to which every individual is entitled as a member of the society.

(ii) Its main objective is to give individual that confidence through which they must be sure that their level of living and quality of life will be adversely affected due to any mishaps and contingencies.

(iii) The aim of social security has been widened to include the complete quality of working and living life in each aspect.

(iv) Society security is a wise investment which motive the employees and boost their morale. Leaving to higher quality production.

(v) It is basic instrument of social and economic justice among members of the society.

(vi) Social security leads to adoption of the schemes of unemployment, insurance and creation of new employment through a drive for rational planning and industrial development.

(vii) It further aims at the establishment of a scheme of old age and unemployment pension.

(viii) Social Security emphasis covering more different types of risks like sickness, maturity and employment injuries.

(ix) Under Social security cash benefits were to be given for employment injuries for permanent partial incapacity.

(x) The main objective of social security is that a citizen who has contributed or is likely to contribute to his country’s welfare should be given protection against certain hazards of life.

(xi) It emphasizes and ensures that the ideas of human dignity and social justice is duty taken care.

The main objective of social security is that a citizen to his country’s welfare should be given protection against certain hazards of life.

According to the International Labour Organization “ Social security is the protection which society provides for its members through a series of public measures against the economic and social distress that otherwise would be caused by the stoppage or substantial reduction of earning resulting from sickness, maternity, unemployment, invalidity, old age and death.”

Methods, Scope of Social Security


International Labour organization in its convention divided scope of social security into nine components.

(i) Medical care, social security under medical care covers pregnancy confinement and its consequences and disease which lead to a morbid condition. “The need for pre-natal and post-natal care was emphasized. It may include practitioner care, specialist care, provision of essential pharmaceutical and hospitalization.”

(ii) Sickness Benefit. Sickness includes incapability to work resulting a loss of earning. Under this benefit worker need not be paid for three days of suspension of earnings and the payment of benefits may be limited to 26 weeks in a year.

(iii) Unemployment Benefit. Under the social security benefit cover the loss of earning during a worker’s unemployed period when he is capable and available for work but remains unemployed because of lack of suitable employment. As per Act this benefit may be limited to 13 weeks payment in year.

(iv) Employment Injury Benefit. Under Employment Injury benefit proper medical care and periodical payment are made to injured employee as per the legal provisions of Worker’s compensation Act. In these days industrial work is subject to different kind of contingencies mishaps and occupational diseases which are covered under employment injury benefit of social security.

It may include (i) Morbid condition (ii) Inability to work (iii) Due to Morbid condition may lead to suspension of earning (iv) Total or partial loss of earning capacity. (v) Death of the bread earner in family. Under this proper medical car and periodical payment are made to injured employee as per the legal provisions of Worker’s compensation Act.

(v) Old Age Benefit. Old age benefits is applicable in India only in few states. Under this benefit the quantum of payment depends upon on individuals working capacity during the period before retirement.

It further includes a certain amount beyond a prescribed age and continues till one’s death.

(vi) Maternity Benefit. There is complex maternity benefit Act 1961 which covers benefit due to pregnancy. Confinement and their consequences resulting in the suspension of earnings. There is legal provision for medical including pre-natal confident, post-natal care and also hospitalization if required. Fixed periodical payment of three month before birth of the child and three month after that.

(vii) Family Benefit. In case of death of the bread earner this cover responsibility for maintenance of children during the entire period of children is provided.

(viii) Survivor’s benefit. It refers to the benefits to the affected family in form of periodical payments to a family following the death of its bread earner and should continue during the entire period of contingency.

(ix) Invalidism benefit. In fact this benefit continue till invalidism changes into old age then old age benefit would become payable under this benefit as per ILO convention “ a periodical payment should cover the needs of workers who suffer from any disability arising out of sickness or accident and who are unable to engage into any gainful activity.”

Labour Laws and Social Security


There are several legislative acts that are providing social security to workers in India. These legislations provide social security to workers from each and every contingencies like risks and mishaps which they are exposed to:

(i) “Employee’s provident fund and Miscellaneous provision 1952: It emphasis on employee’s pension and family pension.

(ii) Payment of gratuity Act 1972. It provides reward for providing a decent and long service of an employee towards his organization.

(iii) Workmen’s Compensation Act 1923. It aims to provide medical care. Periodical payment during sickness and industrial accident/ occupational diseases to which a worker is expected to while on the job.

(iv) Employee’s State Insurance Act. The Act provides insurance to employee’s at a highly economical premium and providing all types of insurance coverage for meeting different contingencies during his life and giving a handsome amounts after death to the family members.

(v) Maturity Benefit Act. It covers pregnancy, confinement their consequences and medical care before and after delivery of the child.

(vi) Group Insurance. Employees are given life insurance policies at very nominal premium as compared to individual insurance.

(vii) Payment of Wages Act 1936. Ensures timely right salary after permissible deduction to the employees.

(viii) The Minimum wages Act 1948--- It safeguard the workers to get minimum wages from their respective employers at the prevailing price index.

(ix) The Factories Act 1948: It is wide act which provide security to workers against health, cleanliness, safety good working condition and employment of women and children.

Note: “All these Acts have been discussed in detail in the relevant chapter. Please refer for details.”

Besides these important Acts social security is being provided to different segment of employees by these sub acts like.

(i) Coal Mines Provident and Bonus scheme Act 1948.
(ii) The plantation labour Act 1951.
(iii) Assam Tea Plantation Provident Act 1955.
(iv) Personnel Injuries (Compensation Insurance) Act , 1963
(v) Seamen’s Provident Act 1968.

Beside these above mentioned Act. There are certain other schemes introduced at different levels for the purpose of providing social security measures with different conditions.

Social Security in India


The social security system got boost due to western influence and rapid industrialization. Social reformers, labour welfare organizations and many progressive employers persuaded the government to undertake social security measures as protection to workers against different types of contingencies and mishaps.

In India due to high industrialization a new class of industrial workers is created with its rural background with very little social and material sources and background, which requires a great need and importance of systematized held through different measures of labour welfare and social security Acts.

Due to joint family especially in villages unemployment, accidents, occupational diseases, old age and other contingencies does not allow to suffer only individual members but their whole family suffers. Due to the development of liberalism and individualism account of western influence the social security has become indispensable in India.

Indian Govt. from time to time has been adding different Acts to safeguard the interest of employees in those profession where there were more chances of exploitation and victimization like mines, plantation coal and workers working in ships etc.

As mentioned earlier old age pension is offered in several states to the old and the infirm who are over 60years of age. Through Employee’s Insurance Act and LIC different contingencies like death and accidents are taken care.

Bombay State Government in 1929 first took benefit of maternity benefit As Enquiry Committee was appointed in 1928 by Bombay State govt. which suggested that steps should be taken by Mill owners to safeguard from distress caused by the unemployment resulting from the introduction of the schemes for improving industrial efficiency and recommended a voluntary gratuity scheme.

In 1921 workmen compensation was modeled on the lines of British legislations providing employer liability for reporting and payment of compensation of accident resulting in death/ total or partial disablement of a worker whenever it arises out of and in course of employment.

In conclusion it can be seen that

(i) Social security benefit have expanded rapidly after independence.

(ii) Social Security in India has been supported by laws which have enacted from time to time during last four decades.

(iii) In India Employee State Insurance and Employee provident fund Schemes of the central govt. where states does not need to contribute.

(iv) Unfortunately in India only workers engaged in Industry and organized sectors are covered by these schemes. Unorganized sector, agricultural sectors have been ignored they have to yet received benefits of these social measures.
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Review Questions
  • 1. What do you understand by the social security concept? Discuss different approaches of it in India.
  • 2. Discuss the nature and objectives of social security.
  • 3. Explain scope and techniques of social security in India.
  • 4. What is the status of social security in India?
  • 5. What different labour laws govern social security in India?
  • 6. Discuss briefly the development of India Social Security system.
  • 7. “Employee’s state Insurance and Employee’s Provident fund sections are the most important Acts in the field of social security and have the maximum coverage.” Discuss.
  • 8. Discuss social security and its impact on industrialization and liberalization.
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