Question

Explain any two social security measures adopted in India.

Answer 1

1. Provident Fund: Under the Employees' Provident Funds and Miscellaneous Provisions Act, the Central Government has established a provident fund scheme for employees. Every employee is entitled to become a member of the scheme after completing three months of continuous service. The employee and the employer contribute every month ten percent of the basic wages. The total contributions are invested in specified investments. The accumulated amount of standing credit to an employee is payable on retirement, death or at the time of leaving service. An employee can get advances and permanent withdrawals for the construction of the house, the marriage of dependents and other specified purposes, like a serious illness.
2. Pension: Under the Employees' Provident Funds and Miscellaneous Provisions Act, the Government of India has framed a family pension scheme to provide family pension benefits to employees. The scheme was launched with the objective of providing long-term recurring financial assistance to the employee after retirement and to his family in case of premature death while in service. A family pension is payable:
   1. To the widow of the deceased employee;
   2. To the eldest surviving minor son until he attains the age of 21 years (in the absence of the widow of the employee);
   3. To the eldest surviving unmarried daughter until she attains the age of 24 years or marries, whichever is earlier (in the absence of the widow of the employee);
   4. In the event of remarriage or the death of the widow, the family pension will be granted to the minor son/daughter through the natural guardian.
      A pension is payable at the rate of 50% of the pay drawn on the date of retirement. Pensioners are allowed, in addition to the dearness allowance announced by the government from time to time. An employee can get a portion of the pension commuted and get a lump sum. The balance of the pension is paid every month.
3. Group Insurance: Group insurance is a scheme that provides insurance coverage for the lives of several persons under one insurance policy. or contract. It is generally provided to employees working for one employer. The insurance on each life is, however, independent of that on the other lives. The main features of group life insurance are as follows:
   1. Insurance is provided to all employees without any evidence of insurability.
   2. It provides risk coverage to the employees as long as they remain in the service of the employer.
   3. Group life insurance is basically a contract between the insurance company and the employer. The policy issued to the employer is called a master contract.
   4. The premium is generally paid jointly by the employee and the employer.
   5. The amount of the premium is payable at a fixed rate without regard to the age or salary of the employees.
   6. In cases of injury or death to an employee, the claim received by the employer is paid to the employee or his nominee.
      Group life insurance is very cheap for employees. They have to pay a very small amount of premium. Salaried people in low-income groups may otherwise find it very costly to get individual insurance policies. High salaried people can use group life insurance as a supplement to the individual life insurance. For the insurance company, cost of administration is low as only one policy is issued for several persons. The employer can get insurance cover for his employees at low cost and thereby provide security to them. Therefore, group life insurance is gaining popularity these days.