The Centre has taken long-overdue steps to improve the social security of the poorest sections in the country. A health insurance scheme for below poverty line (BPL) workers and their families in the unorganised sector has been approved by the Union Cabinet. Implementation of the scheme, which will be launched on October 2, requires amendment of the Unorganised Sector Workers’ Social Security Bill and this is expected to get done in the coming week. Workers in India’s unorganised sector are among the poorest and most vulnerable in the country. Not only are their wages meagre but also, their bargaining power has been weak as they are not organised in trade unions or associations. This has enabled employers to exploit them in every possible way. Working conditions are abysmal and often dangerous, and workers are not provided social security cover or health benefits. This is now poised to change – on paper at least. The government's green signal to the health insurance scheme at this juncture has prompted speculation that with mid-term general elections looking increasingly inevitable, the United Progressive Alliance (UPA) government is seeking to polish up its image as a friend of the aam admi. While this is likely, the need for health insurance for the unorganised sector itself cannot be disputed.

If the government implements the proposed health insurance scheme in a way that its benefits actually reach the target population, it would make a significant difference to a sizeable section of India’s workforce. Hopefully, the government’s commitment to implementing the scheme will extend beyond the elections.

Most of India’s poverty alleviation programmes have failed to make a dent on the problem because of corruption. BPL card holders are entitled to foodgrains at subsidised prices but poverty has pushed many of them to hand over their entitlement to exploitative middlemen and corrupt officials. The government has said that smart cards will be issued to identify beneficiaries of the insurance scheme. It will have to ensure that the smart cards are not misused and the health insurance scheme not hijacked by middlemen. The proposed health insurance scheme will be ineffective if its intended beneficiaries are not made aware of their entitlements and about how the scheme works.