India’s Social Security Coverage

1. At a Glance

• Social security protects workers against loss of income and other risks across their working life and old age. It matters more as informal, gig and platform work grows and incomes become less steady [1].
• India's system has two parts. The organised sector is covered mainly by the EPFO (EPF, EPS, EDLI) and ESIC. Unorganised workers are covered through e-Shram, PM-SYM and social assistance such as NSAP, which became the Pradhan Mantri Samajik Sahayata Yojana [1][10].
• Government figures based on ILO data show coverage rising from 19% (2015) to 64.3% (2025) and then 68.4% (2026) [1][2]. Informal workers make up 88.4% of the workforce, so large gaps remain [4].
• This is core material for GS-II (welfare schemes, vulnerable sections) and GS-III (inclusive growth, labour reforms, formalisation).

2. Why in the News

• September 2026: the monthly wage ceiling for mandatory EPFO coverage was raised from ₹15,000 to ₹25,000. This brings over 51 lakh more employees into coverage [1].
• 2026: the EPF, EPS and EDLI schemes were re-issued as 2026 schemes under the Code on Social Security, 2020, replacing the earlier ones [1].
• October 2026: NSAP was revised into the Pradhan Mantri Samajik Sahayata Yojana, which runs from 2026–27 to 2030–31 [1].
• 21 November 2025: the four Labour Codes came into force, consolidating 29 central labour laws [8].
• 08.05.2026: the Social Security (Central) Rules, 2026 were notified to put the Code's gig and platform worker provisions into practice [7].

3. Background & Evolution

• Rationale: many central social-security laws overlapped, informal workers were largely left out, and gig and platform work had no legal recognition. The Code on Social Security, 2020 (Act No. 36 of 2020) brought nine central laws into one framework [1][13].
• Milestones:
• 2015: social protection coverage was 19% [2].
• 2020: the Code on Social Security was enacted. It was the first law to define "gig worker" and "platform worker" [6][13].
• August 2021: e-Shram launched as an Aadhaar-seeded National Database of Unorganised Workers [1].
• 2021 → 2024: coverage under the ILO World Social Protection Report doubled, from 24.4% to 48.8% [3].
• March 2025: the Ministry of Labour & Employment began a social protection data-pooling exercise [12].
• 2025: the ILO dashboard reported 64.3% coverage, about 94 crore people covered by at least one benefit [2].
• 21 November 2025: the four Labour Codes took effect [8].
• May 2026: the Social Security (Central) Rules were notified [7].
• September 2026: the EPFO wage ceiling was raised to ₹25,000 [1].

• 2026: coverage reached 68.4% [1].

• Earlier arrangements: separate laws, one per scheme, before the Code [1]. For the elderly, widows and persons with disabilities, social assistance ran through NSAP, which is now the PM Samajik Sahayata Yojana [1].

4. Core Static Facts

5. Multi-Dimensional Analysis

Economic

• Raising the wage ceiling and the rise in EPFO members (3.49 crore → 7.98 crore) point to more formal jobs and a larger pool of long-term savings [1].
• The aggregator levy (1–2% of turnover, capped at 5% of worker payouts) makes platforms share the cost of social security without making them employers [6].
• Higher mandatory coverage raises employers' non-wage costs. This may slow formal hiring in small businesses (analytical point).

Social

• 88.4% of workers are informal, so contributory schemes alone cannot give universal coverage. Non-contributory assistance (PM Samajik Sahayata Yojana) remains essential [4][1].
• PM-SYM's entry age of 18–40 leaves out older informal workers, who are pushed towards social assistance instead [1].
• Gig and platform workers now have legal recognition for the first time [6].

Legal / Constitutional

• The Code (Act 36 of 2020) replaces nine laws. The 2026 EPF, EPS and EDLI schemes are framed under it [1][13].
• The Codes took effect on 21 November 2025 [8], but delivery depends on rules being notified by both the Centre and the States [11][7].
• One-time schemes cut litigation: VISHWAS, 2026 settles disputes over damages and penalties for defaults before 14 June 2024, and AMNESTY, 2026 gives PF trusts retrospective exemption [1].

Scientific / Technological

• EPFO 3.0 is built on core banking, the cloud, APIs and microservices. Claims that pass risk checks are settled automatically, cutting the time from up to 20 days to under 3 days [1].
• Benefits can follow the worker because UAN and the e-Shram ID are both linked to Aadhaar [1][6].

Governance / Measurement

• The jump from 48.8% to 64.3% partly reflects changes in ILO methodology and newly available data. The ILO says its estimates are not strictly comparable with earlier reports [5][3].
• The government says even this figure undercounts, because the data-pooling exercise is only in its first phase and non-cash benefits are excluded [2][12].

Administrative

• In December 2025, ESIC's "universal" coverage still applied only in notified districts and areas [10].
• 13 partial-withdrawal provisions were merged into Essential Needs, Housing Needs and Special Circumstances. Cheque-leaf and passbook uploads are no longer required [1].

6. Recent Developments (last 12–18 months)

• 21 November 2025: the four Labour Codes took effect, replacing 29 central laws [8].
• December 2025: ESIC's universal coverage was being extended across India, still district by district [10].
• February 2026: a PIB release described ESIC coverage under the Codes (more than 10 employees, or one worker in hazardous processes) [9].
• 08.05.2026: the Social Security (Central) Rules, 2026 were notified [7].
• 2026: VISHWAS and AMNESTY schemes, EPFO 3.0, and EPF/EPS/EDLI re-issued under the Code [1].
• August 2026: e-Shram registrations reached 31.89 crore [1].
• September 2026: EPFO wage ceiling raised to ₹25,000. Contributing members stood at about 7.98 crore on 16 September 2026 [1].
• October 2026: NSAP became the PM Samajik Sahayata Yojana [1].

7. Prelims Hooks

• The EPFO wage ceiling was raised from ₹15,000 to ₹25,000 in September 2026 [1].
• The EDLI benefit goes up to ₹7 lakh, and members pay no separate premium [1].
• The Code on Social Security, 2020 brings together nine central labour laws [1].
• The four Labour Codes together cover 29 central laws and took effect on 21 November 2025 [8].
• The Code on Social Security, 2020 is the first law to define "gig worker" and "platform worker" [6].
• Aggregators contribute 1–2% of annual turnover, capped at 5% of payouts to gig and platform workers [6].
• e-Shram launched in August 2021 as an Aadhaar-seeded national database of unorganised workers [1].
• PM-SYM: entry age 18–40, pension of ₹3,000 a month after 60, voluntary and contributory [1].
• PM Samajik Sahayata Yojana replaced NSAP and runs 2026–27 to 2030–31 [1].
• Social protection coverage: 19% (2015), 48.8% (2024), 64.3% (2025), 68.4% (2026) [1][2][3].
• The ILO counts only legally backed, cash, active schemes [2].
• India's informal workforce is 88.4% (ILO) [4].
• EPFO 3.0 cuts claim settlement from up to 20 days to under 3 days [1].
• VISHWAS, 2026 applies to defaults from before 14 June 2024 [1].
• 13 partial-withdrawal provisions were merged into 3 categories [1].

8. What the 68.4% Counts, and What It Leaves Out

• One benefit is enough to be counted
• The ILO measures effective coverage (the share of people who actually get a benefit, not just the share a law says should get one). A person counts if they receive at least one social protection benefit [4].
• So a person getting one small cash benefit counts the same as an EPFO member with a provident fund, a pension and insurance.

• The number tells you how many people the system reaches. It does not tell you whether what they get is enough to live on.

• Why 68.4% covered and 88.4% informal can both be true

• The coverage figure counts people who get any cash benefit, including non-contributory help such as old-age or widow pensions [2][1].
• The informality figure counts workers with no formal job protection [4].

• So the coverage number can go up while most workers still have no job-linked protection like a provident fund, sick pay or a pension. Don't present the two numbers as contradicting each other in an answer.

• Registering is not the same as getting a benefit

• e-Shram has 31.89 crore registrations [1]. A registration is an ID in a database, not a payment.
• The ILO still says informal workers have little or no access to basic social security [4]. Being on the list has not yet become getting money for most of them.

9. Why Voluntary Pensions Have Not Reached Informal Workers

• PM-SYM has grown very slowly
• By 10 July 2019, 30.85 lakh people had joined PM-SYM [20].
• Seven years later, on 29 July 2026, the total was just over 54 lakh [17].
• That is under 2% of the 31.89 crore workers registered on e-Shram [1].

• Compare: one change to the EPFO wage ceiling brought in 51 lakh workers in a single step [1]. That is almost what PM-SYM gathered in seven years.

• The design does not fit an uneven income

• PM-SYM is contributory (the worker must pay in every month to stay in) [1]. A daily-wage worker or street vendor does not earn the same amount every month, so payments get missed.
• If a subscriber leaves within 10 years, they get back only their own contributions, with savings-bank interest [18]. The government's matching share is lost.

• So the workers most likely to drop out are also the ones who lose the most when they do.

• The government has admitted part of the problem

• It has said COVID-19 led to low new enrolments [17].

• It has now added a voluntary exit option and given members three years to revive a dormant (inactive) account [17]. This is an admission that many accounts stop receiving payments.

• The age limit adds another gap

• Entry is allowed only between ages 18 and 40 [1]. A 45-year-old construction worker cannot join at all and has to depend on the PM Samajik Sahayata Yojana.

10. What the CAG Found Inside EPFO's Pension Scheme

• The pension fund may not have enough money for its promises
• CAG Report No. 15 of 2026 audited records from April 2017 to March 2024. It was tabled on 12 August 2026 [16].
• It found a significant asset-liability mismatch at EPFO [16]. This means the money the fund holds is not keeping up with the pensions it has promised to pay in future.

• EPFO's actuarial valuation (the check of whether future money coming in will cover future payouts) left out the guaranteed minimum pension [16]. So the real gap is likely larger than EPFO's own check shows.

• Bringing in more members raises the stakes

• The September 2026 ceiling change adds over 51 lakh employees [1].

• If their pensions go into a scheme whose shortfall has not been fully measured, it widens the promise without fixing the funding (analytical point).

• Some money went into risky investments

• The CAG found pension funds held in securities below the required investment grade (riskier bonds than the rules allow) [16].

• A 2013 CAG report had already flagged EPFO for not following its investment pattern [16]. So this is a problem that keeps coming back, not a one-off.

• Members have nowhere independent to complain

• EPFO has no ombudsman (an independent official who settles complaints against the organisation). PFRDA, which regulates NPS, has one [16].

• An EPFO member with a wrongly rejected claim has to complain to EPFO itself, the same body that rejected it.

• The CAG also pointed to who was left out

• The CAG noted that EPS excluded employees earning above ₹15,000, which limited pension coverage [16].
• The new ₹25,000 limit [1] addresses this only if it also applies to EPS membership. Check this before writing it in an answer.

11. The Gig Worker Fund: Law in Place, Benefits Not Yet Flowing

• The workforce is growing faster than the system
• NITI Aayog estimated 77 lakh gig workers in 2020–21, growing to 2.35 crore by 2029–30 [19].

• Recognition came in 2020 [6], but the Central Rules came only in May 2026 [7]. For about five and a half years the law existed with no way to put it into practice.

• No one knows the exact number to plan for

• NITI asked for gig workers to be counted separately in official surveys such as PLFS (the Periodic Labour Force Survey) [19].

• Without that count, nobody can check whether the aggregator levy will raise enough for the benefits being promised.

• The levy depends on worker earnings, not need

• The levy is capped at 5% of payouts to workers [6]. When platforms pay workers less, as they do in a slow season, the fund also gets less money.

• So the fund shrinks at exactly the time workers need income support most (analytical point).

• The Centre alone cannot deliver it

• The Codes are in force, but benefits also depend on States notifying their own rules [11].
• A delivery worker in a State that has not notified its rules has a legal right on paper but no working scheme to claim it from.

12. The Best Case for Formal Jobs, and Where It Stops

• The strongest argument: formal jobs work, so create more of them
• EPFO contributing members rose from 3.49 crore to about 7.98 crore [1].
• One ceiling change added 51 lakh workers [1]. Voluntary PM-SYM managed about 54 lakh in seven years [17].

• So the argument is: mandatory, employer-linked cover grows quickly, and the best social security policy is to turn informal jobs into formal ones.

• What is right about it

• The figures support it. Making cover compulsory through employers has done far more than asking workers to sign up voluntarily.

• Where it stops

• Formal cover reaches only workers who have an employer. Own-account workers (self-employed people with no employer, such as vendors or small farmers) have no employer to make contributions for them. The ILO lists them among the groups usually left out of compulsory insurance [4].
• With 88.4% of workers informal [4], formalisation would take decades to reach most of them.

• Even the formal pillar has weak spots. The CAG found funding gaps in the pension scheme itself [16].

• The fair conclusion for an answer

• Formalisation is necessary but not enough. India needs three parts working together: compulsory employer-linked cover, a platform levy for gig workers, and tax-funded assistance for everyone else.

13. What Should Be Done, and by Whom

• EPFO should get an ombudsman, as PFRDA has

• The CAG pointed out that this missing complaints route is a gap [16]. PFRDA already shows how it can work for NPS members.

• EPFO should count the full cost of its pension promise

• The actuarial valuation should include the guaranteed minimum pension, and pension money should stay in investment-grade securities, as the CAG found it had not [16].

• Do this before adding the new members brought in by the ₹25,000 ceiling [1].

• MoLE should use e-Shram to enrol people in benefits

• 31.89 crore workers are registered [1], but under 2% are in PM-SYM [17].

• Each e-Shram registration should be used to link the worker to a scheme they are eligible for. A registration alone should not be counted as coverage.

• MoLE should make PM-SYM forgive missed payments

• The three-year dormant-account revival is a start [17].

• Irregular earners need contributions that can be paid when they have income. Leaving early should not cost them the government's matching share, which the 10-year exit rule does now [18].

• MoSPI should count gig workers in PLFS, as NITI Aayog advised

• The Social Security Fund cannot be planned without knowing how many workers it must serve [19].

• The Social Security Fund should start with accident insurance

• NITI Aayog pointed to Indonesia, which gave accident insurance to digital-platform workers [19].
• Accident cover is cheap and quick to set up, and it protects against the risk delivery workers face most on the road.

14. Anchors for Answers

• Data: PM-SYM had just over 54 lakh enrolled (29 July 2026), against 31.89 crore e-Shram registrations. That is under 2% of registered workers [17][1]
• Data: Gig workforce of 77 lakh (2020–21), projected to reach 2.35 crore by 2029–30 (NITI Aayog) [19]
• Data: 88.4% of India's workforce is informal (ILO) [4]
• Report/Committee: CAG Performance Audit Report No. 15 of 2026, on pension entities. It found an asset-liability mismatch at EPFO, minimum pension left out of the valuation, below-grade investments and no ombudsman [16]
• Report/Committee: NITI Aayog, India's Booming Gig and Platform Economy (June 2022) [19]
• Report/Committee: Standing Committee on Labour (2019–20), on PM-SYM. Exit within 10 years returns only the worker's own contribution [18]
• Law/Case: Code on Social Security, 2020 (Act No. 36 of 2020) [13]; Social Security (Central) Rules, 2026 [7]
• Comparison: Indonesia gave accident insurance to digital-platform workers, a model NITI Aayog recommended for India [19]
• Comparison: PFRDA gives NPS members an ombudsman; EPFO has none [16]
• Scheme: PM-SYM, India's voluntary contributory pension, which shows the limits of asking informal workers to pay in themselves [1][17]
• Scheme: PM Samajik Sahayata Yojana, the tax-funded fallback for workers no contributory scheme reaches [1]

15. Mains Relevance

• GS-II: welfare schemes for vulnerable sections; mechanisms, laws and bodies set up to protect them; government policies and interventions.
• GS-III: inclusive growth; employment; labour reforms; formalisation of the economy.
• GS-IV (minor): a dignified life and fairness towards gig workers.
• Possible questions: 1. India's social protection coverage has risen sharply, yet nearly nine in ten workers remain informal. Critically examine whether contributory schemes can deliver universal social security. (15 marks) 2. Discuss how the Code on Social Security, 2020 addresses gig and platform workers. What are the challenges in putting it into practice? (10 marks) 3. Evaluate the role of digital public infrastructure (UAN, e-Shram, EPFO 3.0) in making social security portable and easier to access. (15 marks)

16. Related Topics to Study Next

• Four Labour Codes (Wages; Industrial Relations; OSH): they form one reform package with the Social Security Code.
• ESIC and Ayushman Bharat PM-JAY: health is the other pillar of social security, and non-cash benefits are left out of the ILO count.
• NPS and Atal Pension Yojana: contributory pensions to compare with EPS and PM-SYM.
• ILO World Social Protection Report and SDG 1.3: source of the global benchmark and the measurement debate.
• Gig economy (NITI Aayog estimates) and state platform-worker laws: the Centre–State overlap.
• PMJJBY and PMSBY: low-cost insurance for informal workers, compared with EDLI.
• PLFS informality data: shows how much of the workforce is formal.

17. NCERT Concepts to Revise

• Social security (Economy): The whole note is about social security: provident fund, pension and insurance, and who is left out.
• Gig worker (Economy): The Code on Social Security, 2020 first defined gig and platform workers and set up the aggregator levy for them.
• Labour laws (Economy): The four Labour Codes merged 29 central laws, and the Social Security Code merged nine of them.
• Universal social security (Economy): The note asks whether contributory schemes can reach all workers, including informal and gig workers.
• Asset-liability mismatch (Economy): The CAG found EPFO's pension fund holds assets that may not cover the pensions it has promised.
• Digital public infrastructure (Polity): UAN, e-Shram and Aadhaar-linked IDs let benefits follow workers across jobs and platforms.

18. Common Errors / Trap Areas

• 9 vs 29: the Social Security Code merges 9 laws; all four Codes together merge 29 [1][8].
• PM-SYM vs PM Samajik Sahayata Yojana: PM-SYM is a contributory pension; the Samajik Sahayata Yojana is non-contributory social assistance that replaced NSAP [1].
• Coverage figures: 48.8% (2024), 64.3% (2025) and 68.4% (2026) are different data points, and the methods behind them are not strictly comparable. Don't treat them as the same series [3][5][1].
• EDLI premium: members pay no separate premium. EDLI covers death in service; EPS covers pension [1].
• VISHWAS vs AMNESTY: VISHWAS settles disputes over damages and penalties; AMNESTY gives PF trusts exemption [1].
• Aggregator levy cap: the 5% cap applies to payouts to workers, not to turnover [6].