Social Security System

A Consumption and Expense based community managed Social Security System for Developing Countries

Although India is leaping from a developing nation to a developed country, its population is still denied the basic right to Social Security. Even after six decades of independence, majority of Indians still have to fight for basic necessities every day. And to add to it are worries of uncertainty and an uncertain future. The lack of a comprehensive Social Security System in India has had disastrous effects on the country’s poor. With no financial back up for old age, unemployment or income losses, these situations spell financial doom and indebtedness on the poor, occasionally driving them to suicides. Lack of a social security net has also had a profound impact on the area of healthcare. Starkly put, the poor in India cannot afford to be ill. A medical emergency, long-term treatment, a routine surgical procedure – any of these is sufficient to destroy a family financially, as it inevitably means turning to moneylenders for support, getting trapped into the debt cycle, thereby ensuring that poverty becomes generational.

State-driven employment-connected benefits do exist but are accessible only to those working in the organized sector. They thus impact a very small population if one recalls that 93% of the workforce (contributing to 63% of the GDP) is employed in the informal sector. Although social security schemes and instruments exist in our country, but they are income-linked and savings-based and hence designed for those with investable surplus. This pro-rich policy governs the way insurance schemes are marketed: they are sold as tax benefits making them attractive for the moneyed but irrelevant for the poor who cannot even make two ends meet. In case of the family of a disabled or terminally ill, this trauma is even more intensified. Neither does the family have any social security and nor are there any specific insurance products for the challenged. Thus, the disabled or terminally ill lead a precarious existence, totally dependent on family members who are themselves without any protection.

For the poor, the Government has adopted a welfare approach that is supposed to take care of the people, but fails them in every way. Since it is designed to be a constant drain on government funds, it is inherently unsustainable. The various schemes are also vulnerable to the whims of changing governments. Having to depend on what essentially amounts to State handouts and subsidies implies that the poor are deprived of choice and quality.

Years of informal research into the reasons behind and terrible fallout of the lack of an appropriate social security system in India led OASiS, to conclude that a social security model for the poor in India could be economically viable only if it did not squeeze their meager resources, and if it could leverage the advantages of a large population. This insight led OASiS to design a model where a community contributes to its socio-economic security not through taxes, savings or spending cuts but as a by-product of its non-discretionary expenditure.

The model revolves around creating complimentary Business activities for Self Employed Groups (SEGs) that are formed out of Self Help Groups. Each SEG produces or serves as a part of a larger and integrated Business model thus acting both as sellers and consumers. The entire community benefits from the Business model as active consumers, for which they receive insurance coverage against loss of life, ability, health, livelihood and old age for FREE. While the business activities bring all essential and desirable items to the doorstep of the community, they also act as secondary livelihoods and livelihood security for those in SEGs. Thus the system works for the people, is of the people and run by the people in the community. Each family gets a Personal Account for Social Security (PASS), which is a Bank account that accumulates a social security fund from their consumerism across different social security establishments. The diagrammatic representation below explains the entire model.

This is a comprehensive system complete with social security numbers, recording and collecting mechanisms and distribution procedures for unemployment allowance and retirement benefits linked with living standards. Along with customized social security instruments (insurances), the community also chooses the Insurance Company. Easily replicable and adaptable to different contexts, and for different situations, the model offers different communities the chance to take charge of their social security using their existing resources.

After successfully piloting it in Betul, Madhya Pradesh (Central India), the model was replicated by JAI-JUI VICHAR MANCH in SOLAPUR, Maharashtra (Western India). 

Two more replications are on: one in Bihar (East India) by DRISHTEE, and the other in Andhra Pradesh (South India) by PROTO VILLAGE.

NGOs, CBOs and MFIs wishing to replicate the model for their beneficiaries are welcome. OASiS also offers this model to Funding Agencies and Corporate Houses to be replicated under their Corporate Social Responsibility, through their network of NGOs.

Such interconnected community based Social Security Systems across different locations and communities, will create the much needed and long awaited Social Security Net for the country.


A Snapshot of the proposed Social Security Model for Urban Areas is given below: