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SBI Research: AB-PMJAY, MGNREGA can help increase insurance cover in unorganised sector – here’s how

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Government’s flagship schemes like MGNREGA and Ayushman Bharat-PMJAY can be used to enhance insurance penetration in the   unorganised sector in the country, according to SBI Research.The cumulative number of enrolments under insurance and pension schemes across all entities in India today stand at 68.98 crores, of which there are 10.34 crore persons enrolled in PMJJBY and 23.40 crore persons in PMSBY, with claim servicing ratio of 93.7% & 77.3% respectively.

There has also been significant progress regarding pension coverage for unorganised sector workers. For example, under APY, 3.13 crore of persons have been enrolled till June 2021 with male to female subscription ratio of 56:44.

In the latest ‘Ecowrap’ report, Dr Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI, recommended that the ambit of providing social security succour to unorganised sector could be further enhanced through two simple measures:

1. Through MGNREGA

MGNREGA has provided livelihood security till now. However, SBI Research proposes that it can be used as a provider of social security as well.

“For every 100-day worked, the Government can make a defined contribution of say 10 days for creating a social security. Further, there should be compulsory enrolment of MGNREGA workers in PMJJBY and PMSBY for a payment of only Rs 342 (330+12). As only 10% of HHs/individuals complete 100 days of work, the cost of compulsory enrolment will be only Rs 400-500 crore that can be borne by the Government and this could immediately benefit at least 1 crore additional people,” Dr Ghosh said.

2. Through Ayushman Bharat- PMJAY 

Under Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), a total of 16.14 crore Ayushman cards have been issued to the scheme beneficiaries.

However, Dr Ghosh said, “Government should launch an opt-in scheme for health insurance in line with Jan Suraksha schemes. The opt-in scheme may be implemented by auto debit amount from the interest from savings account and paying towards Mediclaim policy. The approximate size of the health insurance now is Rs 58,572 crore and savings bank interest is at least Rs 1.35 lakh crores. With the number of Jan Dhan accounts at 40 crores, the health insurance unveiled might potentially double the existing Ayushman coverage in one go!”

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