What is Social Security Code?

PWOnlyIAS

July 10, 2025

What is Social Security Code?

Uber India may implement the Social Security Code for its drivers by the end of 2025, following talks with the Union Government.

What is Social Security Code?

  • Legislative Background: The Code on Social Security, 2020, was passed by Parliament to consolidate and streamline multiple existing social security laws into one comprehensive framework.
  • Coverage and Beneficiaries: It expands social security to all categories of workers such as formal, informal, unorganized, gig, and platform workers ensuring inclusion beyond traditional employer-employee relationships.
  • Enables the government to create welfare schemes for workers, including:
    • Health insurance under ESIC (Employee State Insurance Corporation).
    • Retirement benefits through EPF (Employees’ Provident Fund).
    • Maternity benefits for women workers.
  • Institutional Framework: The Code provides for the creation of a National Social Security Board with representation from gig platforms, workers, government officials, and experts to frame welfare schemes and oversee implementation.

Significance of the Social Security Code

  • Interoperability for Gig Workers: Under the Code, gig workers such as Uber drivers will have interoperable benefits, meaning social security will continue even if they switch to platforms like Ola or Rapido.

What is Social Security?

  • Social security refers to a system of protection designed to safeguard individuals and households from economic risks and vulnerabilities.
  • According to the International Labour Organization (ILO), social security is, “The protection provided to individuals and households to ensure access to health care and to guarantee income security, particularly in cases of old age, unemployment, sickness, invalidity, work injury, maternity, or loss of a breadwinner.”

Key Components of Social Security

  • Health Care Protection
  • Old Age Security
  • Unemployment Benefits
  • Disability and Work Injury Benefits
  • Maternity and Family Benefits
  • Survivor Benefits

  • Comprehensive Protection: The Code mandates benefits including life and disability cover, health and maternity benefits, old-age protection, education, and more, tailored by the Central Government.
  • Co-contribution Model: Funding for these schemes will come from the Central and State Governments and aggregators (like Uber), ensuring shared responsibility for worker welfare.

Alignment with International Norms: India’s adoption of the Social Security Code aligns with ILO recommendations and its commitment under the UN Covenant on Economic, Social and Cultural Rights.

Concerns Regarding Social Security Status in India

  • High Proportion of Informal Workforce: Around 85 percent of the workforce in India is employed in the unorganized sector.
    • These workers lack written contracts, social protection, or access to formal welfare schemes.
  • Low Social Security Coverage: In India currently only about 35 million out of a workforce of 400 million have access to formal social security in the form of old-age income protection.
    • For gig and platform workers, coverage is even lower due to the absence of employer-employee relationships.
  • Insurance Penetration is Suboptimal: As per IRDAI data (2024), life insurance penetration in India is less than 3.2% of GDP, while health insurance penetration remains under 0.9%, highlighting inadequate risk coverage for vulnerable populations.
  • Fragmented Welfare Delivery: Most social security schemes (like Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM), Ayushman Bharat, etc.) operate in silos, leading to duplication, inefficiency, and limited portability for workers who migrate or change occupations frequently.

Way Forward

  • Expedited Implementation of the Social Security Code: Ensure that all stakeholders especially gig and platform aggregators comply with the Code by the stipulated timeline and create real-time worker databases to operationalize benefit delivery.
  • Promote Digital Portability & Interlinking: Develop digital IDs or worker registries (such as e-Shram) to enable portability of benefits, especially for migrant and gig workers, across states and platforms.
  • Incentivize Aggregator Compliance and Awareness: Provide tax or policy incentives for platform companies that contribute to social security and conduct awareness campaigns among workers to boost enrollment and utilization.

To get PDF version, Please click on "Print PDF" button.

Need help preparing for UPSC or State PSCs?

Connect with our experts to get free counselling & start preparing

Aiming for UPSC?

Download Our App

      
Quick Revise Now !
AVAILABLE FOR DOWNLOAD SOON
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध
Quick Revise Now !
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध

<div class="new-fform">






    </div>

    Subscribe our Newsletter
    Sign up now for our exclusive newsletter and be the first to know about our latest Initiatives, Quality Content, and much more.
    *Promise! We won't spam you.
    Yes! I want to Subscribe.