Erosion of Social Security in Contemporary India
Ankit Singh
The social organisation of labour extends its influence both within and beyond the shop floor. Politics of production is deeply intertwined with the politics of social insurance. In the late 19th and early 20th centuries, changes in industrial work organisation and managerial strategies aimed at regulating production led to significant disputes in industrial relations globally. These tensions coincided with the rise of more organised labour formations within factories. In India, workers’ committees and labour unions emerged at the shop floor level, often aligning with central trade unions to address evolving industrial relations through localised labour conflicts and strike actions. From the late 19th century to the present, the working class has asserted its survival and secured social security legislation and state welfare mechanisms through collective struggles. These efforts have manifested both in organised labour movements and in the deployment of subtle resistance tactics, often described as "weapons of the weak," reflecting a dynamic interplay between overt and covert forms of resistance. However, the cohesive framework of labour legislation and acts implemented in the post-war period has undergone significant transformations in contemporary times. The introduction of new labour codes and regulations has eroded the limited protections that once provided a measure of security to the working class, undermining their already precarious conditions of survival.
Post-war industrial policies, as formulated through the platform of ILO, both globally and in India, have aimed to balance mass production with the provision of social security for workers, facilitating the internationalisation of the labour market alongside goods markets. Social security initiatives must be critically analysed in two dimensions.
First, these measures, when seen in the framework of the all encompassing capitalism, are not a mechanism for labour to achieve genuine freedom. Instead, they are essential for ensuring the survival of labour, enabling the continuous reproduction of labour power necessary for capitalist exploitation. Freedom, in this context, would not mean tactical reforms within capitalism but liberation from capitalism and neoliberalism. True emancipation would challenge and dismantle the capitalist system of domination and hegemony through collective labour struggles and movements.
Second, the historiography of social security and its associated insurance schemes must acknowledge their origins in the capitalist imperative to expand markets and consolidate the hegemony of the global North. In the first half of the 20th century that saw two world wars, if on the one hand communist revolutionaries were marking their presence in history, on the other, the imperialist forces driven by the exploitative capitalist motive needed to stabilise their economic-political system. The establishment of the International Labour Organization (ILO) in 1919, alongside other multilateral institutions, depicts this dynamic. In India, early social security measures, such as the reforms for wages, can in a way appear intertwined with the broader imperialist project, as evidenced by arguments from figures like M.N. Roy. Roy highlighted how that increment in wages in India was necessary for the colonial rulers to sustain the sale of British goods to the Indian working class. India accepted several labour legislations by ILO as a signatory member, and the acts and legislations concerning labour were passed in the post-War period, largely in Independent India (c. 1946-1952).
Drawing from Britain, the Keynesian, Fordist, and Beveridge models of economic management, production, and social welfare, India’s approach to labour and welfare policy has been complex and uneven, particularly under the current regime. While efforts like the Employees' State Insurance Act of 1948 (ESIC) and the Maternity Benefit Act of 1961 aim to secure worker welfare, the state’s prioritisation of corporate and industrial interests has often left the welfare of workers out of the picture. The neglect of a robust social security net for the most vulnerable workers, including huge informal sector workers in India can be seen as part of a broader agenda that undermines labour rights and sidelines the needs of the working class.
The Fordist model, emphasising mass production and efficiency, has long been viewed as a means of transforming developing economies into competitive global players. In India, Fordism’s ideals have been particularly influential in the manufacturing sector, where assembly-line production and efficiency practices have been promoted. However, under the current political climate, Fordism has been weaponized to advance corporate profits at the expense of labour protections, with industrial policies that prioritise output over the rights and welfare of workers. The Modi administration, known for its pro-business stance, has frequently espoused a vision of “Make in India” that aligns more closely with Fordist efficiency than with the Keynesian or Beveridge models’ anticipation to worker welfare and social stability. For millions of Indian workers, Fordism as it is implemented today represents exploitation rather than economic upliftment, as government policies continue to favour capital interests over labour rights.
The issue of social security in India is deeply tied to the socio-economic disparities that continue to divide the formal and informal sectors. Over 90% of India’s workforce is informal, meaning they lack access to basic protections, fair wages, and social security. The Employees' State Insurance Act (ESIC) was designed to extend essential health and social security benefits to formal sector employees, providing them with some measure of security. Despite such initiatives, India’s social security coverage remains limited. The vast informal sector, comprising around 400 million workers, is largely excluded from formal social insurance schemes like ESIC. In response, the government introduced the Pradhan Mantri Shram Yogi Maandhan (PMSYM) in 2019, a voluntary pension scheme for unorganised sector workers. PMSYM offers a monthly pension of ₹3,000 ($40) to workers over sixty years, yet enrollment and implementation challenges persist, with many informal workers remaining unaware or unable to access these benefits. Such social security schemes are nothing but an insurance scheme which is not a benefit but of contributory in nature.
Under the Modi government, rather than expanding ESIC or similar protections to all workers, the focus has been on reducing labour protections, ostensibly in the name of economic growth. Recent labour law reforms have diluted existing protections, making it easier for companies to hire and fire workers and reducing the ability of workers to unionise and demand better working conditions. The Industrial Relations Code requires higher thresholds for unionisation and collective bargaining, making it harder for workers to advocate for their rights. Similarly, the Code on Wages eliminates regional variations in minimum wages, which could result in lower wages for workers in areas with higher costs of living. It also provides legal scope for floor wages replacing minimum wages. These revisions, celebrated by corporate leaders, have been a direct attack on workers’ rights, making it increasingly difficult for the labour force to secure fair wages and benefits.
The Maternity Benefit Act, initially designed to support women in the workforce by offering paid maternity leave and other provisions, exemplifies India’s piecemeal approach to welfare. The Act’s reach is primarily limited to the formal sector, covering only a fraction of India’s female workforce. In a country where women are heavily represented in informal work, the Act fails to support most female labourers, many of whom are forced to choose between their jobs and their health. While the Modi government publicly champions women’s empowerment, it has failed to address this structural issue, leaving millions of women in precarious, underpaid work without access to the social benefits they need. This selective application of welfare protections is emblematic of a broader trend in the administration’s policies, which prioritise corporate growth and profit over the welfare and rights of the working class.
Under the current administration, Keynesian principles of economic intervention for the public good have been largely abandoned in favour of neoliberal reforms that deepen inequality and undercut public welfare. Programs like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which provided rural employment, have faced budget cuts and administrative neglect, undermining one of the country’s most effective Keynesian policies aimed at sustaining rural demand and alleviating poverty, at least, partially. MGNREGA has long served as a lifeline for rural households, providing stable, minimum income and demand in otherwise vulnerable areas. However, the Modi administration has consistently underfunded the program, eroding its ability to provide stable employment and financial support to rural communities. This deliberate neglect aligns with the government’s broader pattern of undermining worker welfare while promoting corporate interests, contributing to rising economic inequality and insecurity for millions of Indians.
The regime’s approach to welfare is a stark departure from the Beveridge model, which emphasised universal welfare and protections against poverty, illness, and economic vulnerability. Under the guise of “reforms” and “efficiency,” the current administration has been rolling back welfare provisions, from cutting subsidies to neglecting healthcare funding, at a time when rising inflation and economic instability make social security all the more urgent. The Bharatiya Janata Party’s (BJP) policies have prioritised privatisation and deregulation, strategies that often leave essential services like healthcare and education out of reach for the working class. Rather than expanding social protections, the regime has shifted its focus toward benefiting the elite and consolidating corporate power. The result is an economic system that mirrors Gramsci’s warning in Americanism and Fordism, a system where industrial capitalism, devoid of worker protections and welfare, creates social instability and entrenches inequality. The Modi administration’s rhetoric around development and modernization rings hollow when the majority of Indian workers face an erosion of their basic rights and protections.
Gramsci’s analysis underscores the need for a cultural and political shift to sustain Fordist production, one that includes substantial worker welfare protections and prioritises social stability. In India’s case, however, the government has moved in the opposite direction. Instead of fostering a culture that values worker protections and social security, it has embraced a corporate-centric model that sacrifices the well-being of the majority for the prosperity of a few. For Fordism to genuinely benefit India, the state must shift from a neoliberal agenda to one that ensures worker protections and universal social security. Without this shift, India risks perpetuating a system that exploits its labour force, undermining not only economic stability but also the foundations of democracy and social equity.
From colonial labour laws to contemporary neoliberal reforms, workers have been systematically deprived of protections, reinforcing inequality and precarity. The dismantling of labour rights under corporate-driven policies demands urgent action. Workers must mobilise, organise, and unite across industries and borders to reclaim their rights. Collective struggles and solidarity are essential to challenge capitalist hegemony, ensure equitable social security, and build a system prioritising dignity, fairness, and true liberation for labour. The fight for justice cannot wait.