Social Security Schemes – EPFO, ESIC, PM-SYM
🟠 Topic 86: Social Security Schemes – EPFO, ESIC, PM-SYM
📌 Introduction
Social security is a critical component of welfare governance, aimed at ensuring income protection, health security, and retirement benefits to workers, especially those in the formal and informal sectors. Social security enhances economic resilience, reduces vulnerability to illness, accidents, and old age, and promotes inclusive growth.
India has built a multi-tier social security framework comprising mandatory schemes for formal workers and voluntary schemes for informal workers, with major players including EPFO (Employees’ Provident Fund Organisation), ESIC (Employees’ State Insurance Corporation), and PM-SYM (Pradhan Mantri Shram Yogi Maandhan).
⚫ Employees’ Provident Fund Organisation (EPFO)
📖 What is EPFO?
EPFO is India’s statutory body under the Ministry of Labour & Employment, tasked with managing retirement savings for formal sector workers under the Employees’ Provident Fund & Miscellaneous Provisions Act, 1952.
Key Schemes Under EPFO
| Scheme | Description |
|---|---|
| EPF (Employees’ Provident Fund) | Retirement savings scheme – employer and employee contribute 12% each |
| EPS (Employees’ Pension Scheme) | Provides monthly pension post-retirement |
| EDLI (Employees’ Deposit Linked Insurance) | Life insurance cover linked to EPF account |
Contribution Structure (EPF)
| Entity | Contribution |
|---|---|
| Employee | 12% of Basic Pay |
| Employer | 12% (8.33% to Pension, 3.67% to EPF) |
Key Benefits of EPFO
✔️ Lump sum corpus on retirement.
✔️ Monthly pension after retirement.
✔️ Life insurance up to ₹7 lakh under EDLI.
✔️ Partial withdrawals allowed for housing, medical emergencies, education, etc.
✔️ Online account management via UAN portal.
Chart – EPFO Members Growth (in crore)
2015 - 4.0
2017 - 5.2
2019 - 6.4
2021 - 7.6
2023 - 8.6
This steady increase reflects formalisation of workforce, expansion into gig workers, and increased enforcement through digital platforms.
Case Study – Universal Account Number (UAN)
- UAN introduced in 2014 to link all EPF accounts under a single ID.
- Enabled: ✔️ Online claims processing.
✔️ Portability between employers.
✔️ SMS and app-based notifications.
⚫ Employees’ State Insurance Corporation (ESIC)
📖 What is ESIC?
ESIC provides comprehensive health and social security benefits to workers earning up to ₹21,000 per month under the Employees’ State Insurance Act, 1948. It covers medical care, maternity, disability, and dependent benefits.
Coverage
| Beneficiaries | Approximate Numbers (2023) |
|---|---|
| Employees Covered | 3.6 crore |
| Total Beneficiaries | ~13 crore |
Contribution Structure (ESIC)
| Entity | Contribution (% of Wages) |
|---|---|
| Employer | 3.25% |
| Employee | 0.75% |
Key Benefits under ESIC
✔️ Full medical care to insured persons and families.
✔️ Sickness benefits – 70% of wages for up to 91 days/year.
✔️ Maternity benefits – 100% of wages for 26 weeks.
✔️ Disablement benefit – Monthly pension for permanent disability.
✔️ Dependent benefits – Pension for dependents of deceased insured persons.
Map – ESIC Coverage Across States (2023)
- Highest Coverage: Maharashtra, Tamil Nadu, Gujarat, Karnataka.
- Expanding into Northeast and rural areas.
Case Study – ESIC COVID-19 Response
- ESIC hospitals converted into COVID-19 treatment centres.
- Extended unemployment cash benefits (Atal Beemit Vyakti Kalyan Yojana) to workers losing jobs.
⚫ Pradhan Mantri Shram Yogi Maandhan (PM-SYM)
📖 What is PM-SYM?
PM-SYM is a voluntary pension scheme launched in 2019 for workers in the unorganised sector, ensuring a minimum monthly pension of ₹3,000 after the age of 60.
Eligibility Criteria
✔️ Age: 18 to 40 years.
✔️ Monthly income: Up to ₹15,000.
✔️ Not covered under EPFO, ESIC, or NPS.
Contribution Structure
| Age of Entry | Monthly Contribution (₹) |
|---|---|
| 18 years | ₹55 |
| 30 years | ₹100 |
| 40 years | ₹200 |
✔️ Government co-contributes matching amount.
Key Benefits
✔️ Assured monthly pension post-retirement.
✔️ Spouse eligible for 50% pension on subscriber’s death.
✔️ Flexible withdrawal in case of permanent disability.
Chart – PM-SYM Enrollment (in crore)
2019 - 0.25
2020 - 0.72
2021 - 1.10
2023 - 1.46
Case Study – PM-SYM & Street Vendors
- PM-SYM has attracted: ✔️ Street vendors. ✔️ Agricultural labourers. ✔️ Domestic workers.
- Provides financial security to informal workers lacking formal pensions.
🔹 Comparative Table – EPFO, ESIC, PM-SYM
| Feature | EPFO | ESIC | PM-SYM |
|---|---|---|---|
| Coverage | Formal sector | Formal sector | Unorganised sector |
| Type | Provident fund & pension | Health & social security | Pension only |
| Mandatory/Voluntary | Mandatory | Mandatory | Voluntary |
| Employer Contribution | Yes | Yes | No |
| Government Contribution | No | No | Yes (50%) |
| Health Benefits | No | Yes | No |
| Pension Benefits | Yes | No | Yes |
🔹 Challenges in Social Security Coverage
1️⃣ Informal Sector Exclusion
✔️ 90% of workforce in unorganised sector with limited coverage under EPFO/ESIC.
2️⃣ Low Awareness
✔️ Many eligible workers unaware of PM-SYM and other voluntary schemes.
3️⃣ Compliance Issues
✔️ Many small establishments evade EPFO/ESIC registration.
4️⃣ Portability Barriers
✔️ Migrant workers struggle to transfer benefits across states.
5️⃣ Low Benefit Levels
✔️ PM-SYM pension of ₹3,000/month may not be sufficient in future due to inflation.
🔹 Way Forward
✔️ Universal Social Security Code covering all workers.
✔️ Expand portability and interoperability across schemes.
✔️ Leverage Aadhaar and Jan Dhan platforms for seamless enrolment.
✔️ Integrate health and pension benefits for informal workers.
✔️ Social security literacy campaigns targeting vulnerable groups.
📚 Practice MCQ
1️⃣ Under the Employees’ Provident Fund (EPF) scheme, what is the employee’s contribution rate?
✅ Options:
(a) 8%
(b) 10%
(c) 12%
(d) 15%
2️⃣ Pradhan Mantri Shram Yogi Maandhan (PM-SYM) is designed for:
✅ Options:
(a) Government employees
(b) Workers in organised sector
(c) Unorganised sector workers
(d) Corporate executives
