Insurance for Contractual Workers of Micro and Small Enterprises in India - A Conscience Call

This focus note explores the context and need to develop customized insurance solutions for the contractual workers of medium and small enterprises (MSEs) in India. It reports that over 93% of MSEs’ workers in India are contractual workers. While employing contractual workers brings in significant cost reduction for these enterprises, these workers are deprived of the benefits that accrue to regular employees. In spite of attractive benefits and generous government cocontributions, many of welfare schemes targeting unorganized workers have not achieved their intended scale. The paper covers the following sections in detail:

• Identifying the target segment of unorganized workers;
• Discussion on regulatory perspectives concerning social security for unorganized workers;
• Evaluation of current social security schemes;
• Overview of the microinsurance market in India;
• Systemic and client level issues in providing customized insurance products for contractual workers.