EPFO BOOSTER 2023 - Part 2 - 18110928

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EPFO BOOSTER Part-2
INDEX
Sr. No. Topic Pg. No.
1. Industrial Relations And Labour Laws. 03
2. PYQs (EPFO/APFC 2012-2021) on Industrial Relations 47

And Labour Laws.
3. Social Security in India. 55
4. Insurance. 79
5. PYQs (EPFO/APFC 2012-2021) on Social Security in 91

India and Insurance.
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1. INDUSTRIAL RELATIONS AND LABOUR LAWS
Industrial Relations
Industrial relations: It means the relationship between labour and management which arises through
interactive processes. T. Dunlop defines Industrial relations as the complex interrelations among managers,
workers & agencies of government.
Parties in Industrial Relations: Employees, Employers, Government, Employers’ organisation, Trade
unions, Courts & tribunals, etc.
Approaches to Industrial Relations (IR):

1) Unitary Approach: It is based on the core assumption that there is only one source of authority i.e., the
management, which owns and controls the dynamics of decision making in issues relating to negotiation and
bargaining. Under unitary approach, industrial relations are grounded in mutual cooperation, individual
treatment, team-work, and shared goals. It has paternalistic approach where it demands loyalty of all
employees.
2) Pluralistic Approach: It assumes that organization is composed of individuals who form distinct groups
with their own set of aims, objectives, leadership styles, and value propositions. It considers conflict
between management and employees as rational and inevitable. State intervention through legislation
and industrial tribunals is necessary to protect the overall interest of society.
3) Marxist Approach (Radical Perspective): It is based on the proposition that the economic activities of
production, manufacturing, and distribution are majorly governed by the objective of profit. It regard
conflict between employers and employees as inevitable (like in pluralistic). Industrial conflict is seen as
being synonymous with political and social unrest. Marxists regard state intervention as supporting
management’s interest rather than ensuring a balance between the competing groups.
4) Systems Approach: (by Prof. John T. Dunlop) – According to Dunlop, the industrial relations system
comprises certain actors (viz., managers, workers, government agencies), contexts, and an ideology, which
binds them together and a body of rules created to govern the actors at the workplace and work community.
5) Giri Approach: (V.V. Giri) Collective bargaining’s and mutual negotiations between management
and labour should be used to settle industrial disputes. He suggested that there should be bipartite
machinery in every industry and every unit of the industry to settle differences from time-to-time with
active encouragement of Government Outside interference should not encroach upon industrial peace.
6) Human Relations Approach: (Keith Davis) The concept of human relations approach underlines the
need for making the individuals familiar with the work situations of the organization and uniting the
efforts of the workers.
7) Industrial Sociology Approach: (G. Margerison) It holds the view that the core of industrial relations is
the nature and development of the conflict itself.
8) Action Theory Approach: (Henry Sanders) The actors operate within a framework, which can at best
be described as a coalition relationship. The action theory analysis of industrial relations focuses primarily
on bargaining as a mechanism for the resolution of conflicts.
9) Oxford Approach: (Flanders) According to this approach, the industrial relations system is a study of
institutions of job regulations and the stress is on the substantive and procedural rules as in Dunlop’s
model. Flanders considers every business enterprise a social system of production and distribution, which
has a structured pattern of relationships. The “institution of job regulation” is categorised by him as
internal (rules, wage structure, grievance procedure) and external (trade unions).
10) Trusteeship Approach/ Perspective: The theory of trusteeship is based on the view that all forms of
property and human accomplishments are gifts of nature and as such, they belong not to any one
individual but to society. Thus, the trusteeship system is totally different from other contemporary labour
relations systems.
Important Terms:
Golden Handshake:
A golden handshake is a clause in an executive employment contract that provides the executive with a
significant severance package in the case that the executive loses their job through firing, restructuring,
or even scheduled retirement. This can be in the form of cash, equity, and other benefits, and is often
accompanied by an accelerated vesting of stock options. Golden handshake is similar to, but more generous
than a golden parachute because it not only provides monetary compensation and/or stock options at the
termination of employment, but also includes the same severance packages executives would get at
retirement.
Golden Handcuffs:
Golden handcuffs refers to financial allurements and benefits that have the objective to encourage highly
compensated employees to remain within a company or organization instead of moving from company to
company (or organization to organization) (opposite of a golden parachute). Golden handcuffs come in
different forms, such as employee stock options or restricted stock, which endow only when the employee
has been with the company or organization for a certain number of years, and contractual agreements,
consisting of bonuses or other forms of benefits which must be repaid to the company if the employee leaves
before the date agreed on. Golden handcuffs are frequently used for jobs that require rare and specialised
skills or in a "tight labour market", where jobs are more common than workers.
Glass ceiling:
A glass ceiling is a metaphor usually applied to women, used to represent an invisible barrier that
prevents a given demographic from rising beyond a certain level in a hierarchy. No matter how
invisible the glass ceiling is expressed, it is actually a difficult obstacle to overcome. The metaphor was first
used by feminists in reference to barriers in the careers of high-achieving women. It was coined by
Marilyn Loden during a speech in 1978.
Yellow-dog contract:
A yellow-dog contract (a yellow-dog clause of a contract, also known as an ironclad oath) is an agreement
between an employer and an employee in which the employee agrees, as a condition of employment, not
to be a member of a labour union. In the United States, such contracts were used by employers to prevent
the formation of unions, most often by permitting employers to take legal action against union organizers. In
1932, yellow-dog contracts were outlawed in the United States under the Norris-LaGuardia Act.
De-jobbing:
Means reducing the number of jobs in the organization through the combined processes of increasing
functional flexibility, delayering the hierarchy, and downsizing the workforce.

Iron law of wages:
The iron law of wages is a proposed law of economics that asserts that real wages always tend, in the long
run, toward the minimum wage necessary to sustain the life of the worker. The theory was first named by
Ferdinand Lassalle in the mid-nineteenth century.
It was coined in reference to the views of classical economists such as David Ricardo's law of rent, and the
competing population theory of Thomas Malthus. It held that the market price of labour would always, or
almost always, reduce as the working population increased and vice versa. Ricardo believed that this
happened only under particular conditions.
Feather bedding:
Featherbedding is the practice of hiring more workers than are needed to perform a given job, or to adopt
work procedures which appear pointless, complex and time-consuming merely to employ additional
workers. The term "make-work" is sometimes used as a synonym for featherbedding.
Trade unionism:
It is system, methods, or practice of trade or labour unions or trade unions collectively.
Theories of Trade Unionism
1) Class struggle theory of Karl Marx: It traced the origin of trade unionism to the growth of industrial
capitalism. Trade union is an instrument for destroying capitalist class. According to Karl Marx,
trade union is an organizing centre. Trade union is necessary to bring about revolutionary and
fundamental changes in social class order.
2) Webb’s theory of Industrial Democracy: According to Webb, trade unionism is an extension of

democracy from political sphere to industrial sphere. Equality of bargaining power & collective
negotiations is the solution of class conflict. Webb agreed with Marx that trade unionism is a class
struggle and modern capitalist state is a transitional phase which will lead to democratic socialism.
Trade union is an instrument to eliminate industrial autocracy. Webb's book 'Industrial democracy'
is the Bible of trade unionism.
3) Cole’s theory of Industrial Unionism & control of industry: Cole’s views are given in his book
“World of Labour” 1913. His views are somewhere in between Webb and Marx. He agrees that
unionism is class struggle and the ultimate is the control of industry by labour and not revolution
as predicted by Marx.
4) Mitchell’s Economic Protection Theory of Trade Unionism: Mitchell, a labour leader, completely
rejected individual bargaining. According to him unions afford economic protection to.
5) Tannenbaum’s Anti-technology Theory (Theory of Man Vs. Machine): Industrial revolution

(automation) threatens the security of workers. Trade union aims at control over machines.
6) Simons Theory of Monopolistic, anti-Democratic Trade Unionism: He denounced trade unionism as

monopoly founded on violence and he claimed monopoly power has no use save abuse.
7) Hoxie’s Theory of Business union/Functional classification of Unionism – It explained origin of trade

unionism in group psychology. According to him, workers who are similarly situated economically and
socially, closely associated and not too divergent in temperament and training will tend to develop a
common solution of their problems of living.
8) Common’s Pragmatic Approach/Environment Theory: This theory is based on a set of premises

which are mostly environmental factors that’s why it is also called as ‘Environmental theory of
labour movement’. The outcome of Common's theory of labour unionism is non-revolutionary and
implies non-acceptance of capitalism which fell considerably short of even the Webb's expectations of
political evolution.
9) Perlman’s Theory of Scarcity Consciousness: Workers are conscious of the existence of scarcity of
opportunity, and they have evolved institutions to hedge and distribute opportunities among members.
He rejected the idea of class consciousness as an explanation for the origin of the trade union
movement but substituted it with what he called job consciousness.
10) Mahatma Gandhi’s Sarvodaya Theory – It is based on Sarvodaya principles of Truth, Non-violence
and Trusteeship. According to him capital & labour should supplement each other.
Five functional types of unionism by Robert F. Hoxie:
1. Business Unions (Bread and Butter union): These are trade conscious rather than class conscious. They
accept the existing economic system and aim at bringing about improvement in the wages and working
conditions of their members.
2. Revolutionary Unions: These are class conscious. Their aim is to overthrow capitalistic system and install
socialistic system.
3. Predatory unions: Unions of this kind do not subscribe to any ideology. Such unions are characterized by
their ruthless pursuit of immediate ends. Their methods include collective bargaining, secret bribery and
violence.
4. Friendly or Uplift Unions: These unions mainly aim at improving the intellectual, moral and social life of
their members. They are idealistic in nature. Since they are law-abiding, they believe in the institution of
collective bargaining and also setting up of cooperative enterprises, mutual insurance, profit-sharing, etc.
5. Dependent Unions: A depend union is parasitic in nature relying upon the support of the employers or
other labour groups.
a) Company Union: This type of union totally depends on the employer for its support and does not
really represent the interest of the workers in so far as it is not opposed to the interest of the management.
b) Union label Union: These types of union depend upon the union label being imprinted on the products
made by the union members.
Trade unions can be classified into following categories on basis of membership structure:
1) Craft union- (Occupational union) It is organisation of workers employed in particular craft/occupation. It

may cover all workers engaged in a particular craft irrespective of the industries in which they are
employed e.g. plumbers, electricians etc.
2) Industrial unions- (Vertical union) An industrial union is organised on the basis of an industry rather than
a craft.
3) General unions- A General union is one whose membership covers workers employed in different
industries and crafts.

Bargaining and Negotiations:
Collective Bargaining:
The term “collective bargaining” refers to the negotiation of employment terms between an employer
and a group of workers. Employees are normally represented by a labor union during collective
bargaining.
The terms negotiated during collective bargaining can include working conditions, salaries and
compensation, working hours, and benefits. The goal is to come up with a collective bargaining
agreement through a written contract. According to the International Labour Organization, collective
bargaining is a fundamental right for all employees.
The process goes through a number of stages:
 Identifying the issues and preparing the demands: This may include a list of grievances, such as
abusive management practices or low salaries.
 Negotiating: The union will hire a team of professional negotiators to reach an agreement with the
employer. The employer will also hire negotiators, and the two teams will continue to meet until they
find a satisfactory agreement.
 Coming to a tentative agreement: Once an agreement is reached, both teams of negotiators will submit
the agreement to their constituents. At this time, any last-minute issues will be raised as the details are
hammered out.
 Accepting and ratifying the agreement: The agreement will be submitted to union members, who will
have the opportunity to vote for or against the new contract.
 Administering the agreement: After an agreement is finalized, workers and shop stewards will
continue monitoring to ensure that the company is abiding by its obligations.
Types of Collective Bargaining:

1. Composite Bargaining:
Composite bargaining has nothing to do with compensation. Instead, it focuses on other issues, such as
working conditions, job security, and other corporate policies. These may include hiring and firing practices
as well as workplace discipline. The goal of composite bargaining is to come up with a suitable agreement
leading to a lasting and harmonious relationship between employers and their employees.
2. Concessionary Bargaining:
As its name implies, concessionary bargaining focuses on union leaders making concessions in exchange for
job security. This is common during an economic downturn or a recession. Union leaders may agree to give
up certain benefits to guarantee the survival of the employee pool and, ultimately, of the business.
3. Distributive Bargaining:
This process is characterized as benefiting one party financially at the expense of the other. This can come
through increased bonuses, salaries, or any other financial benefits. Distributive bargaining normally favors
workers over employers.
4. Integrative Bargaining:
Each party tries to benefit through integrative bargaining, which is why it’s often referred to as a form of
win-win bargaining. Each side tries to consider the other’s position and bring issues to the table that aim to
benefit both parties. As such, employees and employers both stand to lose and gain with integrative
bargaining.
5. Productivity Bargaining:
This type of bargaining revolves around compensation and the productivity of employees. Labor union
leaders often use higher salaries and compensation as a way to boost employee productivity, which leads to
higher profits and value for the employer. For this kind of bargaining to work, both parties need to agree to
financial terms in order to increase productivity.
Pros and Cons of Collective Bargaining:
Pros:
 Employees have a larger voice.
 Improves workplace conditions and protects employees
 Establishes rights and responsibilities of employers and employees
Cons:
 Lengthy process
 Comes at a high cost
 Employers may be forced to negotiate and accept unfavorable terms.
Walton & McKersie Negotiation Framework (Behavioral theory of labour negotiations):

4 sets of activities are considered to account for almost all of the behavior in negotiations as follows:
1. Distributive Bargaining:
Competitive behaviors.
The parties bargain over division of a particular pie, and one party’s gain is a direct loss for the opponent.
It is a fixed-sum game, or distributive bargaining.
2. Integrative Bargaining:
Problem-solving behaviors.
Both sides search for solutions that would increase the size of the pie.
In game theory models, this approach is referred to as a variable-sum game.
3. Attitudinal Structuring:
Activities affecting attitudes of the parties to one another.
This sub process defines the quality and type of relationship between labor and management.
Encompasses the parties’ efforts, intended and unintended, to shape their opponents’ behaviors.
4. Intra-organizational Bargaining:
Behaviors of a negotiator for achieving consensus within his own organization.
Takes place largely away from the bargaining table and refers to the internal negotiations that occur within
the respective organizations.
Each side must resolve some of these internal conflicts before it can reach a settlement with its bargaining
opponent.
Contract Zone: Its outer limits are determined by the bargaining parties. For example, in the case of a
potential automobile transaction, there is a price at which the buyer would rather walk than drive, and there
is a price at which the seller would rather keep than sell the automobile
Trade union security measures:
Types of Union security measures are as follows:
1. Closed Shop: In this, the employer agrees to hire only union members. Those who resign from the union
must be dismissed.
2. Union Shop: In this, the employer may hire anyone regardless of them being a member of the trade union
but the employee must join the union within the stipulated time period.
3. Agency Shop: The employer may hire anyone and there is no need for the employee to join the union
4. Dues check off: It is the contract between the employer and the union where the employer agrees to
collect fees from union members directly from their paycheck and transmit those funds to the union on
regular basis.

Evolution of Labour laws & Trade unions in India
 1st labour agitation in India – In Bombay, 1875 under the leadership of S.S Bengalee.
 1st Factory commission, 1875: During Lord Ripon's time, the first Factories Act was accepted in
1881. Following this act, a Factory Commission was appointed in 1885. Arbuthnott was the president
of the First Factory Commission.
 1st Factories act, 1881: This act mainly aim to improve the working conditions of labour such as
regulation of working hours. The act prohibited employment of children under the age 7. This act is
applicable only to factories using mechanical powers, employing not less than 100 workers. Children
between the ages 7-12 were to work for maximum 9 hours.
 Narayan Meghaji Lokhande (1848–1897) established Bombay Mills Hands Association in 1890 to
fight for worker's rights (1st leader to organised labour union in India). He is acclaimed as the Father
of the Trade Union Movement in India (first leader to organize labour movement in India)
 Afterwards, various trade unions came into being:

In 1897, the Amalgama Society of Railway Servants of India was established and registered under the
Companies Act.
Printers’ Union Calcutta (1907)
Postal Union (1907)
Kamgar Hitwardhak Sabha (1909)
Social Service League (1910).
 Mahatma Gandhi along with Ansuyaben Sarabhai and Shankerlal Banker founded the Ahmadabad
textile labour association in 1918.
 1st organised trade union: Madras Labour Union (1918) - established by B. P. Wadia.
 Establishment of International Labour Organization (ILO) by the 1919 Peace Conference that
followed World War I. A branch of ILO was established In India and a regular conference of I.L.O. was
started in India.
 All India Trade Union Congress (AITUC) – Set up in 1920. Founded by Lala Lajpat Rai, Joseph
Baptista, N.M Joshi and Diwan Chaman Lal. Lajpat Rai was first president of AITUC. The All India
Trade Union Congress (AITUC) is the oldest trade union federation in India.
 Trade Union Act of 1923 and Industrial Disputes Act, 1929.
 British government established the Royal Commission on Labour in 1929. It was chaired by John
Henry Whitely.Reports of this commission laid down way for a series of labour legislations from 1932
to 1937 including Payment of Wages Act, 1936, Trade Disputes (Amendment) Act 1938.
 The unions which separated themselves from AITUC, formed their own all India body - All India
Trade Union Federation.
 In 1931, a new All India Trade Union - All India Red Trade Union Congress came into being.
 In 1934, a grand session of Indian Trade Union Congress took place. This session was presided over
by Pandit Harinath Shastri. In this session, an agreement was reached between All India Red Trade
Union Congress and Trade Union Congress. All India Red Trade Union Congress was abolished.
Subsequently in 1938, Trade Union Federation was also merged in All India National Trade Union
Congress.
 In 1941, Indian Trade Union Labour Federation” came into existence led by M.N. Roy.
 Indian Labour Conference: The first meeting of the Indian Labour Conference (then called Tripartite
National Labour Conference) was held in 1942 and so far a total of 46 Sessions have been held. ILC
also known as the ‘labour parliament’ of the country formed on the lines of International Labour
Conference is the apex level tripartite (Government, Employers and Workers) consultative committee in
the Ministry of Labour & Employment. International Labour Conference also known as
International Parliament of Labour is a conference organized by ILO every year.
 Industrial Employment Act, 1946 and Bombay Industrial Relations Act, 1946.
 In 1947, Indian National Trade Union Congress was established under aegis of ‘Gulzarilal Nanda
and Sardar Patel.’
 Hind Mazdoor Sabha (Praja Socialist Party): It was founded in west Bengal in 1948. Its founders
included Basawan Singh (Sinha), Ashok Mehta, R.S. Ruikar, Mani Benkara, Shibnath Benerajee,
R.K. Khedgikar, T.S. Ramanujam, VS. Mathur, G.G. Mehta.
 In 1949, United Trade Union Congress (UTUC) headed by Professor K.T. Shah came into existence.
 In 1955, Bhartiya Mazdoor Sangh was established under aegis of Rashtriya Swayamsevak Sangh
(RSS).
 In 1957, 15th session of Indian Labour Conference evolved code of discipline.
 Code of Discipline of Industries, 1962: Principles of the Code of Discipline:

1. There should be no strike or lockout without proper notice.
2. No unilateral action should be taken in connection with any industrial matter.
3. There should be no resource to go slow tactics.
4. No deliberate damage should be caused to a plant or property.
5. Acts of violence, intimidation, coercion or instigation should not be resorted to.
6. The existing machinery for settlement of disputes should be utilized.
7. Awards and agreements should be speedily implemented.
8. Any action which disturbs cordial industrial relation should be avoided.
 1st National Commission on Labour (1966) under the Chairmanship of Justice P.B. Gajendragadkar.
It recommended to set up working committee in any unit which has a recognized union.
 2nd National Commission on Labour in (1999) under the chairmanship of Ravindra Verma.
It recommended that the existing Labour Laws should be broadly grouped into 4 or 5 Labour Codes
on functional basis by simplifying, amalgamating and rationalizing the relevant provisions of the
existing about 44 Central Labour Laws.
 Wage Board for Working Journalists 2009: G.R. Majithia
 Index Review Commission 2009: G.K. Chadha
United Nation’s Universal Declaration of Human Rights (UDHR) & Labour provisions:
There are total 30 articles, of which Articles 22–27 sanction an individual's economic, social and
cultural rights, including healthcare.
Article 22:
Everyone, as a member of society, has the right to social security and is entitled to realization, through
national effort and international co-operation and in accordance with the organization and resources
of each State, of the economic, social and cultural rights indispensable for his dignity and the free
development of his personality.
Article 23:
Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and
to protection against unemployment.
Everyone, without any discrimination, has the right to equal pay for equal work.
Everyone who works has the right to just and favourable remuneration ensuring for himself and his family
an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.
Everyone has the right to form and to join trade unions for the protection of his interests.
Article 24:
Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic
holidays with pay.
Article 25:
Everyone has the right to a standard of living adequate for the health and well-being of himself and of his
family, including food, clothing, housing and medical care and necessary social services, and the right to
security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood
in circumstances beyond his control.
Labour Laws & Indian Constitution (Related Articles)

Fundamental Rights:
Article 14:
Equality before the law which is interpreted in labour laws as “Equal pay for Equal work”. There are a few
exceptions in it regarding labour laws such as physical ability, unskilled and skilled labours shall receive
payment according to their merit.
In the case of Randhir Singh vs Union of India, the Supreme Court said that “Even though the principle of
‘Equal pay for Equal work’ is not defined in the Constitution of India, it is a goal which is to be achieved
through Article 14,16 and 39 (c) of the Constitution of India.
Article 16:
Equality of opportunity in matters of public employment
16(1) There shall be equality of opportunity for all citizens in matters relating to employment or
appointment to any office under the State

16(2) No citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any
of them, be ineligible for, or discriminated against in respect or, any employment or office under the State.
16(3) Parliament can prescribe residence as condition for certain employment.
16(4) State can make provisions for reservations in favour of backward class.
16(5) Incumbent of an office related to religious/denominational institution can belong to that particular
religion/denomination.
Article 19 (1) (c): All citizens shall have right to form associations/unions/cooperative societies.
The Trade Union Act, 1926 works through this Article of the Constitution. It allows workers to form trade
unions.
Article 19 (1) (g): All citizen shall have right to practice any profession/carry any occupation, trade, or
business.
Article 23:
Prohibition of traffic in human beings and beggar & other forms of forced labour.
In current times, forced or bonded labour is an offense which is punishable under the law. The Bonded
Labour (Abolition) Act, 1976 prohibits all kinds of bonded labour and is declared illegal.
In People's Union for Democratic Rights vs. Union of India 1983, it was held that labour or services for a
remuneration less than a minimum wage amounts to "forced labour".
23(2) – State can impose compulsory service for public purpose.
Article 24:
No child below the age of 14 years shall be employed to work in any factory/mine or engaged in any other
hazardous employment.
DPSPs:
Article 38: State to minimise inequalities in income, status, facilities and opportunities. This was added
by 44th amendment act, 1976.
Article 39: To secure opportunities for healthy development of children. This was added by 42nd amendment
act, 1976.
Article 39 (a): State shall secure right to an adequate means of livelihood.
Article 39 (d): The State shall, in particular, direct its policy towards securing; that there is equal pay for
equal work for both men and women.
Article 39A: To Promote equal justice and to provide free legal aid to the poor. This was added by 42nd
amendment act, 1976.
Article 41: To secure right to work, to education & to public assistance in case of unemployment, old age,
sickness & disablement.
Article 42: State shall make provisions for just & humane conditions for work & maternity relief.
Article 43: State shall endeavour -1) To secure work, living wage, decent standard of living, full enjoyment
of leisure & social & cultural opportunities to all workers. 2) To promote cottage industries on an individual
or cooperative basis in rural areas.
Article 43A: State shall secure participation of workers in management of industries. This was added by
42nd amendment act, 1976.

7th SCHEDULE (Article 246): Labour is a concurrent subject in the Constitution of India. However,
certain matters are reserved for the Centre.
Union List:
Entry 55 - Regulation of labour and safety in mines and oilfields.
Entry 61 - Industrial disputes concerning Union employees.
Entry 65 - Union agencies and institutions for "Vocational ...training...”
Concurrent List:
Entry No. 22 Trade unions, industrial and labour disputes
Entry No. 23 Social security and insurance, employment and unemployment
Entry No. 24: Welfare of labour including conditions of work, provident funds, employers "invalidity and
old age pension and maternity.
State List:
Entry 9 - Relief of the disabled and unemployable.
Theories of Labour Welfare:

As per the Committee on Labour Welfare, welfare services should mean, “Such Services, facilities, and
amenities as adequate canteens, rest and recreation facilities, sanitary and medical facilities, arrangements
for travel to and from the place of work, and for the accommodation of workers employed at a distance”.
1. Policing Theory:
According to this theory, the factory and other industrial workplaces provide many opportunities for owners
as well as managers to exploit workers in an unfair manner. This is done by making the labour work for
very long hours, by paying unfair wages, by not keeping the workplace hygienic, by ignoring safety and
health provisions like drinking water, canteens, restrooms etc.
The welfare state, therefore, has to prevent this exploitation and to do so, it assumes the role of a policeman,
and makes it mandatory for the managers of industrial establishments to provide welfare facilities, and also
punishes the non-complier.
2. Philanthropic Theory:
Philanthropy refers to affection for mankind. This theory of labour welfare refers to the provision of good
working conditions, crèches, canteens and drinking water facilities etc., so as to remove the disabilities of
the workers.
Employers having concern for their workers may undertake such labour welfare measures for the benefit of
workers.
3. Religion Theory:
The Religion theory consists of two aspects, namely, Investment and Atonement.

The Investment aspect states that the fruits of today’s deeds will be reaped tomorrow. Therefore, any
action, good or bad, is treated as an investment and inspired by this aspect (Investment), some employers
plan and organize canteens and crèches.
The Atonement aspect of the religion theory states that the current disabilities of an individual are the
outcome of the sins committed by him/her previously. Therefore, he/she should pledge to do good deeds
now so as to atone or compensate for his/her sins.
4. Placating Theory:
The Placating theory is based on the assumption that appeasement pays when the workers are organised
and are militant.
Workers’ demand for higher wages and better working conditions cannot be left unattended. Therefore,
some welfare measures need to be taken so as to bring peace.
5. Trusteeship Theory:
The Trusteeship Theory is also called the Paternalistic Theory of labour welfare. According to this theory,
the employer or the industrialist holds the total industrial estate, properties and the profits accruing from
them, in trust. Workers are also not able to take care of themselves for reasons such as lack of education,
low wages etc.
The employers should, therefore, provide for the well-being of the workers out of the funds that are in their
control.
6. Functional Theory:
The Functional Theory is also called the Efficiency Theory of labour welfare. It states that welfare
facilities are provided so as to make the workers more efficient. The workers will work efficiently if they
are treated kindly if they are provided with clean and safe working conditions, good canteens etc.
8. Public Relations Theory:

The Public Relations Theory is based on the fact that welfare activities are provided to the workers so as
to create a good impression on their minds and the public and this can be done by providing clean and
safe working conditions, a good canteen, creche and other measures.Providing such measures help making a
good impression on the workers, visitors and the public.
9. Social Theory:
The Social Theory of labour welfare states that along with improving the condition of its employees an
industrial establishment is also morally bound to improve the conditions of the society.

Citizen concept of labour -
• As a citizen in a democracy has certain inalienable rights and voice in determining and exercising
these rights.
 Industrial Labour has also the same right as industrial citizens.
 Labour has a right to be consulted in regard to the terms and conditions under which they are
supposed to work.
• Labour welfare is also mandatory in an Industry, which is an extension of the term welfare and
its application to labour.
 The term labour, labourer, workers, workman or employee are all used to refer to the wage-
earning human agents in the industry.
 The concept of labour welfare has received inspiration from the concepts of democracy and
welfare state.

International Labour Organization (ILO):
1. It is a United Nations agency whose mandate is to advance social and economic justice by setting
international labour standards.
2. Founded in October 1919 by the Treaty of Versailles under the League of Nations, it is the first and
oldest specialised agency of the UN in the year 1946.
3. The International Labour Organization (ILO) is the only tripartite U.N. agency with government,
employer, and worker representatives. The ILO celebrated its 100th anniversary in 2019.
4. The ILO has 187 member states: 186 out of 193 UN member states plus the Cook Islands. India is a
founder member of the International Labour Organization.
5. It is headquartered in Geneva, Switzerland.
6. ‘World Employment and Social Outlook’ and ‘Global wage report’ is released by International
Labour Organization.
Declaration of Philadelphia (10 May 1944):

It restated the traditional objectives of the International Labour Organization (ILO) and then branched
out in two new directions: the centrality of human rights to social policy, and the need for international
economic planning. With the end of the world war in sight, it sought to adapt the guiding principles of the
ILO "to the new realities and to the new aspirations aroused by the hopes for a better world. It was adopted
at the 26th Conference of the ILO in Philadelphia, United States of America. In 1946, when the ILO's
constitution was being revised by the General Conference convened in Montreal, the Declaration of
Philadelphia was annexed to the constitution and forms an integral part of it by Article 1.
The declaration focused on a series of key principles to embody the work of the ILO. These include:
1. Labour is not a commodity.
2. Freedom of expression and of association are essential to sustained progress.
3. Poverty anywhere constitutes a danger to prosperity everywhere.
4. The war against want requires ... unrelenting vigour ... (for) the promotion of the common welfare. (I, d)
All human beings, irrespective of race, creed or sex, have the right to pursue both their material well-being
and their spiritual development in conditions of freedom and dignity, of economic security and equal
opportunity.
The eight ILO fundamental Conventions are:
1. Forced Labour Convention, 1930 (No. 29),
2. Abolition of Forced Labour Convention, 1957 (No. 105)
3. Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87)
4. Right to Organise and Collective Bargaining Convention, 1949 (No. 98)
5. Equal Remuneration Convention, 1951 (No. 100)
6. Discrimination (Employment and Occupation) Convention, 1958 (No. 111)
7. Minimum Age Convention, 1973 (No. 138), and
8. Worst Forms of Child Labour Convention, 1999 (No. 182)
Among these 8 core fundamental convention India ratify 6 Convention. India has not ratified the two
core/fundamental conventions:
1. Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87)
2. Right to Organise and Collective Bargaining Convention, 1949 (No. 98)
Note: Remember ‘Convention number’ E.g. No. 138 for Minimum Age Convention.

Labour welfare organisations under Ministry of Labour & Employment:
Dattopant Thengadi National Board for Workers Education and Development (DTNBWED):
It is an autonomous body under the Ministry of Labour & Employment, Government of India. It is
registered under the Societies Registration Act, 1860. Started in 1958.
Chief Labour Commissioner (CLC):
It is known as Central Industrial Relations Machinery was set up in April, 1945 in pursuance of the
recommendation of the Royal Commission on Labour in India and was then charged mainly with duties of
prevention and settlement of industrial disputes, enforcement of labour laws and to promote welfare of
workers in the undertakings falling within the sphere of the Central Government.
Directorate General Factory Advice Service and Labour Institutes (DGFASLI):
The office of the Chief Adviser of factories, which is now called Directorate General, Factory Advice
Service and Labour Institutes, was setup in 1945 with the objective of advising Central and State
Governments on administration of the Factories Act and coordinating the factory inspection services in the
States. Headquarters situated in Mumbai.
Employees State Insurance Scheme (ESIC): ESIC scheme was inaugurated in Kanpur on 24th February
1952 (ESIC Day) by then Prime Minister Pandit Jawahar Lal Nehru.
It is one of the two main statutory social security bodies under the ownership of Ministry of Labour and
Employment, Government of India, the other being the Employees' Provident Fund Organisation. The
fund is managed by the Employees' State Insurance Corporation (ESIC) according to rules and
regulations stipulated in the ESI Act 1948.
In March 1943, Prof. B.P.Adarkar was appointed by the Government of India to create a report on the
health insurance scheme for industrial workers. The report became the basis for the Employment State
Insurance (ESI) Act of 1948.
Founded: 24 February 1952, Headquarters: New Delhi
The ESI Scheme applies to factories and other establishment's viz. Road Transport, Hotels, Restaurants,
Cinemas, Newspaper, Shops, and Educational/Medical Institutions wherein 10 or more persons are
employed. However, in some States threshold limit for coverage of establishments is still 20.
The ESI Scheme is financed by contributions from employers and employees. The rate of contribution by
employer is 4.75% of the wages payable to employees. The employees' contribution is at the rate of 1.75%
of the wages payable to an employee. Employees, earning less than Rs. 137/- a day as daily wages, are
exempted from payment of their share of contribution.
Employees Provident Fund Organisation (EPFO):

EPFO is one of the World's largest Social Security Organisations in terms of clientele and the volume of
financial transactions undertaken. The Employees' Provident Fund came into existence with the
promulgation of the Employees' Provident Funds Ordinance on the 15th November, 1951. It was replaced
by the Employees' Provident Funds Act, 1952.

EPFO Scheme:
EPF Scheme 1952
Accumulation plus interest upon retirement and death.
Partial withdrawals allowed for education, marriage, illness and house construction.
Housing Scheme for EPFO Members to achieve Hon'ble Prime Minister's Vision of housing to all Indians
by 2022.
Pension Scheme 1995 (EPS)
Monthly benefit for superannuation/retirement, disability, survivor, widow(er) and children.
Minimum pension on disablement.
Past service benefit to participants of erstwhile Family Pension Scheme, 1971.
Insurance Scheme 1976 (EDLI)
Benefit provided in case of death of an employee who was a member of the scheme at the time of death.
Benefit amount 20 times of the wages. Maximum benefit of 6 lakh.
Pandit Deendayal Upadhyaya National Academy of Social Security (PDNASS):

NATRSS was set up in 1990, by Employees" Provident Fund Organisation. Ever since its inception,
PDNASS has been emerging as a premier institution involved in training, research and consultancy in the
social security sector.
V.V. Giri National Labour Institute (VVGNLI):

It is an autonomous body of the Ministry of Labour and Employment, Government of India, set up in
July 1974, is a premier Institute of Labour Research, Training and Education at Noida, Uttar
Pradesh.
SAMADHAN Portal (Software Application for Monitoring And Disposal, Handling of Industrial
Disputes/Claims/General Complaints): It is a digital initiative of the Ministry of Labour and
Employment to make the life of workmen, management, trade union and other stakeholders smooth by
making the system more user-friendly, transparent & efficient though online documentation, centralized
monitoring & reducing disposal time by giving them a single online platform for raising their grievances.
DigiSaksham: National Career Service (NCS) Portal now offers “DigiSaksham” Microsoft I MoLE
Training by Microsoft free of cost for its registered Jobseekers on digital skills, with a focus on rural and
socially disadvantaged youth.

New Labour Codes:
Ministry of Labour & Employment has consolidated 29 central labour laws into 4 labour codes.
Labour code Acts subsumed under it
Code on Industrial Relations Trade Unions Act, 1926

Industrial Employment (Standing Orders) Act, 1946
Industrial Disputes Act, 1947
Code on Wages Payment of Wages Act, 1936

Minimum Wages Act, 1948
Payment of Bonus Act, 1965
Equal Remuneration Act, 1976
Code on Social Security Employees’ Provident Funds and Miscellaneous Provisions

Act, 1952
Employees’ State Insurance Act, 1948
Employees’ Compensation Act, 1923
Employment Exchanges (Compulsory Notification of
Vacancies) Act, 1959
Maternity Benefit Act, 1961
Payment of Gratuity Act, 1972
Cine-workers Welfare Fund Act, 1981
Building and Other Construction Workers’ Welfare Cess Act,
1996
Unorganised Workers Social Security Act, 2008
Code on Occupational Safety, Health Factories Act, 1948

& Working conditions Mines Act, 1952
Dock Workers (Safety, Health and Welfare) Act, 1986
Building and Other Construction Workers (Regulation of
Employment and Conditions of Service) Act, 1996
Plantations Labour Act, 1951
Contract Labour (Regulation and Abolition) Act, 1970
Inter-State Migrant Workmen (Regulation of Employment
and Conditions of Service) Act, 1979
Working Journalist and other Newspaper Employees
(Conditions of Service and Miscellaneous Provision) Act,
1955
Working Journalist (Fixation of Rates of Wages) Act, 1958
Motor Transport Workers Act, 1961
Sales Promotion Employees (Condition of Service) Act, 1976
Beedi and Cigar Workers (Conditions of Employment) Act,
1966
Cine-Workers and Cinema Theatre Workers (Regulation of
Employment) Act, 1981

Code on industrial relations:
Comparison with previous acts
Provisions Previous Acts Code on Industrial relations
Non-Employee Persons employed in a Persons employed in a

managerial/administrative/in a managerial/administrative capacity/in
supervisory capacity with wages a supervisory capacity with wages
exceeding Rs 10,000/- (Industrial exceeding Rs 18,000/-.
Dispute Act, 1947).
Fixed term employment No provision regarding fixed term Introduces a new provision for “fixed
employment. term employment” which means
engagement of a worker on the
basis of a written contract of
employment for a fixed period. They
are eligible for all statutory benefits
available to a permanent worker.
Strike, Lock-outs 14 days prior notice of strike and Notice of 14 days before a strike or
lock-out – Applicable only to public lock-out. This notice is valid for a
utility services. maximum of 60 days. (Applies to all
industrial establishment irrespective
of Public Utility Services).
Applicability of Standing Applies to all the industrial All industrial establishment with
Order establishments (within India) with an 300workers or more.
engagement of more than
100workmen (Industrial Dispute
Act, 1947)
Negotiating No such provision. Sole Negotiating Union: If there were
union/council more than one registered trade union
of workers functioning in an
establishment, the trade union having
more than 51% of the workers as
members would be recognised as the
sole negotiating union.
Negotiation Council: In case no trade
union is eligible as sole negotiating
union, negotiating council will be
formed consisting of representatives
of unions that have at least 20% of the
workers as members.
Grievance Redressal Workman need not raise its It mandates that establishment with 20
grievance to the committee before or more employees shall constitute
moving to a conciliation officer. one or more Grievance Redressal
(Industrial Dispute Act) Committee.
Disciplinary proceedings No time limit mentioned for Investigation and inquiry have to be
completing the disciplinary completed within 90 days from the
proceedings against the worker. date of suspension of a worker.

Trade union forum for It lies before high court also. Appeal against non-registration or
appeal cancellation of registration lies only
before tribunal
Industrial Tribunal Resolution of Industrial dispute use Now the Industrial tribunal will
to be done by only 1 member consist of 2 members out of whom
Tribunal. one shall be a judicial member and the
other will be an administrative
member.
Notice for Retrenchment 1 month notice (for industry 1 Month notice is required.
employing less than 50 workers),
3 Months’ notice (for Industry
employing not less than 100
workers)
Re-employment or No such time period prescribed Within 1 year period only
retrenched worker
PRIOR PERMISSION Applied for industrial establishment All industrial establishment with
For lay off, retrenchment where 100 or more workers are 300workers or more.
& closure of employed.
establishment
Workers Reskilling Fund Not existed. Employer will be required to deposit
an amount equal to fifteen days last
drawn wages of every retrenched
worker.
 Definition of Industry:
Industry means any systematic activity carried on by cooperation between an employer and for
production, supply or distribution of goods/services with a view to satisfy human wants/wishes whether
or not:
Any capital has invested for purpose of carrying on such activity. Such activity is carried on with motive
to make any gain or profit but does not include:
Institutions owned/managed by organization wholly/substantially engaged in any charitable, social
or philanthropic service.
Any activity of appropriate government relatable to sovereign functions of appropriate
government including all activities carried on by departments of central government dealing with
defense, research, atomic energy & space, any domestic service.
Any activity notified by central government.
 Definition of Worker:
Worker means any person except an apprentice employed in any industry to do any manual, unskilled,
skilled, technical, operational, clerical or supervisory work for hire or reward, whether terms of
employment be express or implied and includes working journalists and includes any such person who
has been dismissed, discharged or retrenched or retrenchment has led to that dispute. Or whose
dismissal, discharge or retrenchment has led to dispute, but does not include any such persons:
Who is subject to Air force act 1950/Army act 1950/Navy Act 1957.
Who is employed in police service or as an officer or other employee of a prison or
Who is employed mainly in managerial or administrative capacity.
Who is employed in supervisory capacity drawing wage of exceeding Rs. 18000/month or amount as
may be notified by central government.

Code on wages:
Comparison with previous acts:
Provisions Previous provisions Code on Wages
Applicability Applicable only on scheduled Applicable to all employees including
employments under Minimum organized and unorganized sector.
Wages Act, 1948.
Revision of minimum wages Minimum wages must be Mandates that minimum wages be
revised by the Central or State revised in five-year intervals.
governments at least once in
every 5 years.
Settlement period for If <1000 employees – 7th of 7th of succeeding month.
monthly wages succeeding month. In case the employee is
If >1000 employees – 10th of removed/dismissed/retrenched/resign,
succeeding month. wages are required to be paid within 2
working days.
Claims for wages, bonus Claims for wages and bonus Claim could be made within 3 years.
can be filed within period
varying from 6 months to 2
years.
Applicability to employee Applied to those employees All employees are protected without
drawing less than Rs.24,000/- any wage limit.
for filing claim under Payment
of Wages Act, 1936.
National minimum No provision to fix floor Central Government will fix national
wage/Floor wage wages minimum wage /floor wage after taking
into account minimum standard of
living of workers. The State
Government shall not fix minimum
wage below the floor wage.
Registers & returns Over 10 Registers. Only 2 registers are required to be
Four returns. maintained. Only one return to be filed.
Overtime payment Different States have different Overtime payment shall be at 2 times
provisions for overtime the normal wages/ ordinary wages
payment
Bonus The Payment of Bonus Act, Applies to every establishment which
1965: Applies to every has 20 or more employees.
establishment which has 20 or
more employees whose wages All employees whose wages do not
do not exceed Rs.21,000 per exceed specific monthly amount (to be
month. specified by central/state government)
will be entitled to annual bonus-
Minimum 8.33%and maximum 20%.

Some More Provision of Code on Wages:
 Definition of wages:
Includes-Basic Pay, dearness allowance & retaining allowance
Excludes-statutory bonus, value of house accommodation & utilities, employer contribution to provident
fund/pension, conveyance allowance/travelling concession, house rent, allowance, remuneration,
overtime allowance, commission, gratuity, retrenchment, compensation.
Quantum of exclusion- The specified exclusions, however may not exceed 50% of all renumeration and
in event of exceeding, such excess amount shall be deemed as renumeration and will be considered as
wage.
 Mode of payment of wages:

i) Coins, ii) Currency notes, iii) Cheque, iv) by crediting to bank a/c, v)through electronic mode.
 Inspector cum Facilitator: Not just inspecting authority (as in erstwhile acts) but also facilitator toward
compliance.
 Advisory boards:
Central Advisory Board – Employees, Employers(equal in numbers as of employees), Independent
persons (not exceeding 1/3rd of total), 5 representative of state government.
The Central Advisory Board shall consist of persons to be nominated by the Central Government
representing employers and employees in the scheduled employments who shall be equal in number and
independent persons not exceeding one-third of its total number of members; one of such independent
persons shall be appointed the Chairman of the Board by the Central Government.
State Advisory Board – Employees, Employers (equal in numbers as of employees), Independent

persons (not exceeding 1/3rd of total). 1/3rd of total members of central and state advisory board must be
women.

Code on social security:
Comparison with previous acts:
Provisions Previous provisions Code on social security
Registration/Cancellation of Required under all previous If Establishment is registered under
establishment acts. any existing Central Labour Laws, it
is not required to obtain registration
under Section 3 of the Code of Social
Security.
Employees Not include contract labours. Include workers employed through
contractors.
Interstate migrant workers Not include self-employed Include self-employed workers from
workers. another state.
Gig workers and Platform Not defined. Defined & mandated social service
workers schemes for them.
Assessment & determination No limitation period was In case of any dispute or proceedings
of dues from employer mentioned for determination of for determination of dues from the
moneys due from an employer employer, fixed the limitation period
of proceedings and inquiry to be five
years.
Applicability for Employees’ Where 10 or more persons are To every establishment with 10 or
State Insurance employed and therefore applies more employees except seasonal
to both organised and factory.
unorganised sectors. (ESI Act, Central government can extend it for
1948) establishment which carries
hazardous occupation irrespective
of number of employees employed.
Employer of plantation who has
opted for application of ESIC.
It allows for voluntary
registration(i.e., establishment with
less than 10 employees can apply).
Applicability for Gratuity Every factory; Every shop or Every shop or establishment in which
establishment in which 10 or 10 or more employees are employed,
more persons are employed and a continuous service of 5 years in
(The Payment of Gratuity Act, general.
1972). It reduces the gratuity period from
five years to three years for
working journalists.
Fixed term employees will be
eligible for gratuity just after 1 year
of serving an organisation
Applicability for Maternity Every shop or establishment Every shop or establishment in which
benefit wherein 10 or more persons are ten (10) or more employees are
employed (Maternity Benefit employed
(Amendment) Act, 2017.

Social Security Organisations No such provision existed. It enforces Constitution of Social
Security Organizations for the
administration of funds.
National social security Not existed. Code enforces for its constitution.
board and state unorganised
workers’ board
Appeal to tribunal No appeal by employer shall No appeal by the employer shall be
be entertained by the Tribunal entertained by the Tribunal unless it
unless it has deposited a has deposited 25% of the amount due
Demand Draft payable in the with Social Security Organization
Fund and bearing 75% of the concerned.
amount due from him.
Excessive Sickness Benefit No such provision. It provides extra expenditure as
sickness benefit for insanitary
working conditions in the factory or
in the accommodations due to the
neglect of the owner.
Some more provisions of Code on Social Security:

 It mandates government to form social security schemes for- Homebased workers, self-employed
workers, wage workers, gig workers and platform workers.
 Employees’ Provident Fund:

Applicable to every establishment with 20 or more employees.
Contributions to PF: Employer – 10% of wages payable, Employee – 10% (or more if he/she want)
Central Government can apply rate of 12% of wages for any establishment.
 It mandates an employee or a worker (including an unorganised worker) to provide Aadhaar number to

receive social security benefits or to even avail services from a career centre.
 It is mandatory for any establishment to report vacancy to career centres before filling up the vacancy.
However, there is no obligation on employer to recruit through career centre.
 Maternity Benefits:
Women shall not work in any establishment during 6 weeks immediately following day of delivery,
miscarriage or medical termination of pregnancy.
Leave: Maximum 26 weeks of which not more than 8 weeks shall precede the expected day of delivery.
Women shall be entitled to payment of maternity benefit at rate of average daily wage.
Medical bonus of 3500/- or such amount as notified by central government from the employer if no pre-
natal confinement or post-natal care is provided by employer.
2 breaks (for duration as notified by central government) till child attains age of 15 months,
Establishment with 50 or more employees, shall have creche facility.
Woman who has actually worked in establishment for not less than 80 days in 12 month immediately
preceding date of expected delivery can claim maternity benefit.
Punishment- Imprisonment up to 6 months or/and fine up to 50000/-.

In case of more than 2 surviving chid- Maternity leave will be of 12 weeks of which not more than 6
weeks shall precede the expected date of delivery.
 Unorganized/gig/platform workers:
Registration: 2 Conditions- a) completed 16 years of age or other prescribed age, b) he/she has
submitted a self-declaration containing information prescribed by central government.
Contribution by aggregators shall be between 1-2% of the annual turnover of the aggregators, but not
exceeding 5% of the annual amount paid or payable by him to his gig workers.
The Occupational Safety, Health & Working Conditions Code:

Provisions Previous New
Definition of Factory 1. 10 workers, if the work is carried 1. 20 workers for premises where
out using power, or the work is carried out using power,
2. 20 workers, if it is carried out and
without using power. (The 2. 40 workers for premises where it
Factories Act, 1948) is carried out without using power.
Hazardous Industry Factories Act covered only the All establishments where any
hazardous industries where any hazardous activity is carried out
business, trade, or occupation is irrespective of the number of
carried out with 10 or more workers
workers. (The Factories Act, 1948)
Contract workers The government may prohibit New Code prohibits contract labour
employment of contract labour in in core activities, except where: (i)
some cases including where: (i) the the normal functioning of the
work is of a perennial nature, or (ii) establishment is such that the
the work performed by contract activity is ordinarily done through
workers is necessary for the contractor, (ii) the activities are
business carried out by the such that they do not require full
establishment, or (iii) the same time workers for the major portion
work is carried out by regular of the day, or (iii) there is a sudden
workmen in the establishment. increase in the volume work in the
core activity which needs to be
completed in a specified time
Rights of Employees No such provision Every employee shall have right to
obtain from employer information
related to employee’s health &
safety and report to Safety
Committee also.
Work Hour Maximum limit at 9 hours per day. Maximum limit at 8 hours per day.

Overtime If a worker works beyond 9 hours a Overtime work can be taken by the
day or 48 hours a week, overtime employer with consent of
wages are double the rate of wages worker/employee. Overtime wages
are payable. are twice the wage.
(Factories Act,1948)
Employment of Women A woman worker cannot be Employer can employ women
employed beyond the hours 6 a.m. employee between7 p.m. and 6 a.m.
to 7.00 pm. with her consent, subject
toconditions on safety, holidays and
working hours
Social security fund No provision Establishment of a Social Security
Fund for the welfare of
unorganised worker.
Inter-state Migrant Not defined Inter-state migrant worker as a
Workers person who: (i) has been recruited
by an employer or contractor for
working in another state, and
(ii)draws wages within the
maximum amount notified by the
central government; (iii)any person
who moves on his own to another
state and obtains employment
Safety Committee When there are 1000 workers When 500 workers in a factory.
250 workers inhazardous process.
250 workers in building/other
construction.
100 workers in a mine
Welfare Officer When there are 500 workers in On 250 workers in factory, mine,
factory. plantation.
Creche facility for For 30 Female workers For 50 female workers

children below 6 years of
age
Canteen facility When 250 or more workers are When 100 or more workers are
employed employed
Other provisions:
 This code does not apply to offices of central government, state government and any ship of war or any
nationality but it applies to contract labour employed through contractor in offices where central/state
government are principal employer.
 Establishments covered by the Code are required to register within 60 days (of the commencement of
the Code) electronically to the registering officers, appointed by the Central/state government.
 It introduces concept of core activity of an establishment as opposed to non-core activities such as
sanitation, security, running canteens, hospitals, clubs, guest house, housekeeping, etc.
 District Magistrate shall be Inspector-cum-facilitator when mines are concerned.

 It allows the appropriate government to exempt contractors from the provisions of the code in case of an
emergency, subject to such conditions as may be notified.
 It provides that no person below 18 years of age shall be allowed to work in any mine or part thereof
but in case of apprentices &other trainees, such age limit is not below 16 years.
 Workers can’t be required to work for more than 6 days/week and will be entitled to 1 day off for
every 20 days of work and 1 day off every week.
 Provisions regarding Annual leave:
Eligibility: Worker must have worked for 180 days in calendar year.
Entitlement: Leave entitlement shall be at the rate of one-day leave for every 20 days of work; In case
of adolescent workers and workers employed below ground mine the same is one-day leave for every 15
days of work.
Prohibition of Sandwich Leave Policy:Any holidays that fall in between the leave availed by a worker
shall be excluded from the period of leave so availed.
If a worker does not avail the whole of the leave allowed to him in any 1 calendar year, then, any leave
not taken shall be added to the leave to be allowed to him in the succeeding calendar year. This is
subject to the following conditions: -
a) The total number of days of leave that may be carried forward to a succeeding year does not exceed
30 days;
b) The worker who has applied for leave with wages but has not been granted the same shall be entitled
to carry forward the leave refused without any limit.
Worker shall be entitled to encashment of leave at the end of a calendar year if he requests the same.
Where the total quantum of leave exceeds 30 days, a worker shall be entitled to encash such excess
leave.


Trade Unions Act, 1926
 The Trade Unions Act, 1926 provides for registration of trade unions with a view to render lawful
organisation of labour to enable collective bargaining. It also confers certain protection and privileges on
a registered trade union.
 The Act extends to the whole of India and applies to all kinds of unions of workers and associations of
employers, which aim at regularising labour management relations.
 Definition –
A Trade Union is a combination whether temporary or permanent, formed for regulating the relations
not only between workmen and employers but also between workmen and workmen or between
employers and employers.
 Appointment of Registrar:
Section 3 of the Trade Union Act, 1926 empowers the Government to appoint a person to be registrar of
Trade Unions. The appropriate Government (State/Central), as the case may be is also empowered to
appoint additional and Deputy Registrars as it thinks fit for the purpose of exercising and discharging the
powers and duties of the Registrar.
 Mode of Registration – Registration of a trade union is not compulsory but is desirable since a
registered trade union enjoys certain rights and privileges under the Act.
Section 4 of the Act provides for the mode of registration of the trade union.
According to the Section, any seven or more than seven members of a trade union may by application
apply for the registration of the trade union subject to the following two conditions:
• At Least 7 members should be employed in the establishment on the date of the making of the
application.
• At Least 10% or a hundred members whichever is less, are employed in the establishment should be a
part of it on the date of making the application.
 Trade dispute: "Trade dispute" means any dispute between employers and workmen or between
workmen and workmen, or between employers and employers which is connected with the
employment or non-employment, or the terms of employment or the conditions of labour, of any person,
and "workmen" means all persons employed in trade or industry whether or not in the employment of
the employer with whom the trade dispute arises;
 Rules of a Trade Union - Section 6 of the Act enlists the provisions which should be contained in the
rules of trade union and it provides that no trade union shall be recognized unless it has established an
executive committee in accordance with the provisions of the Act and specified rules.
 Section 7 of the Act furnishes upon the registrar power to call for information in order to satisfy
himself that any application made by the trade union is proper. In matters where the discrepancy is found
the registrar reserves the right to reject the application unless such information is provided by the
union.
 According to Section 8 of the Act, if the registrar has fully satisfied himself that a union has complied
with all the necessary provisions of the Act, he may register such union by recording all its particulars
in a manner specified by the Act.
 According to Section 9 of the Act, the registrar shall issue a registration certificate to any trade union
which has been registered under the provision of Section 8 of the Act and such certificate shall act as
conclusive proof of registration of the trade union.
 Section 9A of the Act lays down the minimum number of members required to be present in any union
which has been duly registered, the Sections mandates that a trade union which has been registered must
at all times should continue to have not less than 10% or one hundred of the workmen, whichever is less,
subject to a minimum of seven, engaged or utilized in an institution or trade with that it’s connected, as
its members.
 The registrar, according to Section 10 of the Act has the power to withdraw or cancel the
registration certificate of any union in any of the following conditions:
On an application made by the trade union seeking to be verified in such manner as may be prescribed.
If the registrar is satisfied with the fact that the trade union has obtained the certificate by means of fraud or deceit.
If the trade union has ceased to exist.
If the trade union has wilfully and after submitting a notice to the Registrar, has contravened any provision of the
Act or has been continuing with any rule which is in contravention with the provisions of the Act.
If any union has rescinded any rule provided under Section 6 of the Act.
 Legal Status of a Registered Trade Union Incorporation of Registered Trade Union Section 13 of the
Act. It shall - Body corporate by the name under which it is registered.
Have perpetual succession and a common seal.
Power to contract and hold and acquire any movable and immovable property.
By the said name can sue and be sued.
 Criminal conspiracy in Trade Disputes: Section 17 of the Act states that no member of a trade union
can be held liable for criminal conspiracy regarding any agreement made between the members of the
union in order to promote lawful interests of the trade union.
 Immunity from civil suits in certain cases: Section 18 of the Act immunes the members of trade union
from civil or tortious liabilities arising out of any act done in furtherance or contemplation of any trade
disputes.
 Appointment of Office Bearers: At least 50% of the office bearers of a union should be actually
engaged or employed in the industry with which the trade union is concerned, and the remaining 50%
or less can be outsiders such as Lawyers, politicians, social workers etc.
 To be appointed as an office bearer or executive of a registered trade union, a person must have:
a) attained the age of 18 years; and b) not been convicted of any moral turpitude and sentenced to
imprisonment, or a period of at least 5 years has elapsed since his/her release.
 Change of Name & Registered Office:
A registered trade union may change its name with the consent of at least 2/3rds of the total numbers of
its members.
Notice of change of name in writing, signed by the secretary and 7 members of the union, should be sent
to the registrar.
Change of Registered Office Notice of change in registered office address should be given to the
Registrar in writing within 14 days of such change.
 Amalgamation of Trade Unions: Any registered trade union may amalgamate with any other union(s), provided
that-
a) At least 50% of the members of each such union record their votes and
b) At least 60% of the votes so recorded are in favour of amalgamation.
 Dissolution of a Trade Union: A registered trade union can be dissolved in accordance with the rules of
the union. A notice of dissolution signed by any seven members and the secretary of the union should be
sent to the registrar within 14 days of the dissolution. [The funds of the union shall be divided by the
Registrar amongst dissolved Union’s members in the manner prescribed under the rules of the union or
as laid down by the government.]
 The following Act, namely – (a) The Societies Registration At, 1863. (b) The co-operative Societies Act,
1912. And (c) The Company Act shall not apply to any registered Trade Union, had the registration
of any such Trade Union under any such Act shall be void.

Industrial Dispute Act, 1947
 Earlier laws dealing with Industrial disputes: Employers' and Workmen's Disputes Act, 1860, Trade
Disputes Act, 1929, Rule 81-A, of the Defence of Indian Rules(during the 2nd World War).
 The Industrial Disputes Act 1947 came into force on 1 April 1947 and extends to the whole of India. It
regulates Indian labour law so far as those concerns trade unions as well as Individual workman
employed in any Industry within the territory of India. It applies only to the organized sector.
 Industrial Dispute is “any dispute of difference between employers and employers or between
employers and workmen; or between workmen and workmen, which is connected with the employment
or non-employment or the terms of employment or with the conditions of labour of any person.”
 Section 2A of Industrial Disputes Act, 1947, where any employer discharges, dismisses, retrenches or
otherwise terminates the services of an individual workman, any dispute or difference between that
workman and his employer connected with, or arising out of, such discharge, dismissal,
retrenchment or termination shall be deemed to be an industrial dispute whether or not other
workman nor any union of workmen is a party to the dispute.
 Industry - Any systematic activity carried on by co-operation between an employer and his workmen
for the production, supply or distribution of goods or services with a view to satisfy human wants or
wishes (not being wants or wishes which are merely spiritual or religious in nature).
 Applicability –
To whole of India and applies to every industrial establishment carrying on any business, trade,
manufacture or distribution of goods and services irrespective of the number of workmen employed
therein.
Every person employed in an establishment for hire or reward including contract labour, apprentices and
part time employees to do any manual, clerical, skilled, unskilled, technical, operational or supervisory
work, is covered by the Act.
 It does not apply to persons mainly in managerial or administrative capacity, persons engaged in a
supervisory capacity and drawing more than Rs. 10,000 per month or executing managerial functions
and persons subject to Army Act, Air Force and Navy Act or those in police service or officer or
employee of a prison.
 Workmen: The word 'workman' means any person employed in any industry etc. It is a very exhaustive
term, including any person, apprentice employed in any industry to do any manual, skilled, unskilled,
technical, operational, clerical or supervisory work for hire or reward etc.
 Closure: The Act defines “Closure” as the permanent closing down of a place of employment or part
thereof. Here, the employer is constrained to close the establishment permanently.
 Controlled industry: "controlled industry" means any industry the control of which by the Union has
been declared by any Central Act to be expedient in the public interest.
 Strike: Strike means a cessation of work by a body of persons employed in any industry acting in
combination, or a concerted refusal or a refusal under a common understanding of any number of
persons who are or have been so employed, to continue to work or to accept employment.
 Lock-out: It means the temporary closing of a place of employment or the suspension of work, or the
refusal by an employer to continue to employ any number of persons employed by him.
 Restrictions & Prohibitions Strikes and Lockouts: It provides that no person employed in public
utility service shall go on strike in breach of contract: a) Within 14 days of giving notice of strike or b)
Without giving to employer notice of strike within 6 weeks before striking; or c) Before the expiry of the
date of strike specified in any such notice as aforesaid; or d) During the pendency of any conciliation
proceedings before a conciliation officer and 7 days after the conclusion of such proceedings.
 Declaration of Public Utility Service: The appropriate Government may declare any industry specified
in the first Schedule of the Industrial Disputes Act, 1947 to be a public utility service for a period of six
months by issuing a Notification in the Official Gazette which may extend from time to time for any

period not exceeding six months if in the opinion of the appropriate Government public emergency or
public interest requires extension.
 General prohibition of strike: Act imposes general restrictions on declaring strike in breach of contract
in the both public as well as non- public utility services in the following circumstances mainly: - a)
During the pendency of conciliation proceedings before a board and till the expiry of 7 days after the
conclusion of such proceedings; b) During the pendency and 2 months after the conclusion of
proceedings before a Labour court, Tribunal or National Tribunal; c) During the pendency and 2 months
after the conclusion of arbitrator, when a notification has been issued under sub- section 3 (a) of section
10 A; d) During any period in which a settlement or award is in operation in respect of any of the matter
covered by the settlement or award.
[Conciliation proceeding before a conciliation officer is no bar to strike under this section].
 Lay-offs:
"Lay-off" means the failure, refusal or inability of an employer on account of – 1) Shortage of coal, 2)
Power or raw materials or the accumulation of stocks or 3) Break-down of machinery or 4) Natural
calamity or for any other connected reason to give employment to a workman whose name is borne on
the muster rolls of his industrial establishment and who has not been retrenched.
Workman has right to lay-off compensation subject to the following conditions, they are: • Workman
name should be borne on muster rolls of the establishment and he/she is not a badli workman or a casual
workman; and • The workman should have completed not less than 1-year continuous service, and • The
workman should have laid-off, continuously or intermittently;
The lay-off compensation is equal to 50% of the total of the basic wages and dearness allowance that
would have been payable to him, if he had not been so laid off.
According to section 25C of Industry and dispute Act 1947, maximum days allowed to Layoff of
employee by employer is 45 days.
However, if this contingency is prolonging beyond a reasonable time, then parties can enter into an
agreement not to continue lay-off after a period of 45 days in a year.
Certain establishments do not have any provisions relating to layoff of the employees by the employer.
a) Industrial establishments in which less than 50 workmen are employed, on an average per working
day.
b) Industrial establishments which are of a seasonal character and in which work is performed only
intermittently.
 Act defines Retrenchment as the termination by the employer of the service of a workman for any
reason whatsoever, but does not include - (a) Voluntary retirement of the workman, or (b) Punishment
inflicted by way of disciplinary action, or (c) Retirement of the workman on reaching the age of
superannuating if the contract of employment between the employer and the workman concerned
contains a stipulation in that behalf; or (d) termination of the service of the workman as a result of the
non-removal of the contract of employment between the employer and the workman concerned on its
expiry or of such contract being terminated under a stipulation in that behalf contained therein; or (e)
termination of the service of a workman on the ground of continued ill-health.
 Works or Workers’ Committee: Act provides that every industrial undertaking employing 100 or more
workers is under an obligation to set up a works committee consisting equal number of representatives of
employer and employees.
 Act empowers the Central & State governments to appoint conciliation officers and a Board of
Conciliation as and when the situation demands.
The Organization of the Chief Labour Commissioner (Central) acts as the primary conciliatory agency in
the Central Government for industrial disputes

 The appropriate government may, by notification in the official gazette, appoint such number of persons
as it thinks fit to be the conciliation officer. The conciliation officer however has no power to force a
settlement.
Whether the settlement has been reached or not, the report in either case must be submitted within 14
days of the commencement of conciliation proceedings or earlier.
In case of failure of conciliation, a report is sent to Government. The Ministry of Labour after
considering it, either refers the dispute for adjudication or refuses to do so.
 When the conciliation officer fails to resolve the disputes between the parties, the governments can
appoint a Board of Conciliation. (It is not a permanent institution like the Conciliation officer. It is an
adhoc, tripartite body having the powers of a civil court, created for a specific dispute.)
The board cannot admit a dispute voluntarily. It can act only when the dispute is referred to it by the
Government. The board is expected to submit its report within 2 months of the date on which the
dispute was referred to it.
 In case of the failure of the conciliation proceedings to settle a dispute, the government can appoint a
Court of Inquiry to enquire into any matter connected with or relevant to industrial dispute. The court
of enquiry is required to submit its report within a period of six months from the commencement of
enquiry. This report is subsequently published by the government within 30 days of its receipt.
 According to Act, in cases where the conciliation process fails, it is advised that the parties opt for
voluntary arbitration. (Voluntary arbitration refers to getting the disputes settled through an
independent person chosen by the parties involved mutually and voluntarily).
The arbitration award becomes binding once it is enforceable on those parties who refer the disputes to
the Arbitrator. Government will then publish it within 30 days of such submission. The award would
become enforceable on the expiry of 30 days of its publication.
 For the purpose of adjudication, the Industrial Disputes Act provides a 3-tier machinery:
A. Labour court
B. Industrial Tribunal
C. National Tribunal
In case of failure of conciliation, the matter is referred to any of the Industrial Tribunal or Labour court
and the process of adjudication begins. At the end of the proceedings an Award is given by the Presiding
Officer. The Ministry of Labour publishes the Award in the Official Gazette within a period of 30 days
from the date of receipt of the Award. An Award becomes enforceable on the expiry of 30 days from the
date of its publication in the Official Gazette. The Regional Labour Commissioner is the implementing
authority of the Awards.

Industrial Employment (Standing Orders) Act:
 Applicability: The Act applies to the industrial establishments (within India) with an engagement of
more than 100 workmen at present or as noted on any day in the preceding year unless provided by the
appropriate Government for application to any such industrial establishment – with less than a hundred
employees.
 Certification of Standing Orders: It is mandatory for every employer covered under the Industrial
Employment (Standing Orders) Act to get standing orders certified by submitting five draft copies of the
standing orders to the certifying officer such as labour commissioner or a regional labour commissioner
and also includes any other officer appointed to perform the functions of certifying officer.
 Certification Process:
1) Certifying Officer Send a copy of the Draft Standing Order to the workmen or trade union, along with
a notice calling for objections that shall be submitted within 15 days of receiving such notice.
2) Upon receipt of such objections, the employer and workmen to be given an opportunity of being
heard, after which the Certifying Officer shall decide and pass an order for modification of the Standing
Order. 3)Finally, the Certifying Officer shall certify such Standing Order, and thereby, within 7 days,
send a copy of it annexed with his order for modification passed under Section.
 Appeals: Any related party aggrieved by the order of the Certifying Officer may appeal to the ‘appellate
authority’ within 30 days, provided that its decision, of confirming such Standing Order or amending it,
shall be final. The appellate authority shall thereafter send copies of the Standing Order, if amended, to
the related parties within 7 days.
 Modification of Standing Order: Certified SO cannot be modified, except on agreement between the
related parties, until 6 months from the last modification or operation of such standing order. The parties
may apply to the Certifying Officer for modifications in the standing order by annexing five copies of
the proposal or a certified copy of the agreement for modifications.
 Payment of Subsistence Allowance: Where any workman is known to be suspended at the investigation
or inquiry into complaints or charges of misconduct against him, it is mandatory for the employer to
pay to such workman subsistence allowance at the following rates: a)For the first 90 days: @ 50% of the
wages which the workman was entitled to immediately preceding the date of such suspension. B) For 91
to 180 days: @ 75% of such wages of suspension if the delay in the completion of disciplinary
proceedings against such workman is not directly attributable to the conduct of such workman.
 Penalty: If an employer defaults to submit draft standing orders or modifies his standing orders, then the
concerned officer may impose a penalty which will be above Rs 5,000 and in the case of a continuation
of offence may impose a fine which will be above Rs 200 for every day till the offence continues.
If the establishment does any act in violation of the standing orders after getting certified under this Act,
then the employer will be punishable with the penalty of which will be more than Rs 100 and in the case
of a continuation of offence may impose a fine of Rs 25 for every day till the offence continues.
 Interpretation of Standing Orders: Any question relating to the application/interpretation of this Act
may be referred to the Labour Courts constituted for this purpose, whose decision shall be final and
binding on all parties.

The Factories Act, 1948
 Applicability: -To the whole of India.
Covers all manufacturing processes and establishments falling within the definition of ‘factory’.
Applicable to all factories using power and employing 10 or more workers, and if not using power,
employing 20 or more workers on any day of the preceding 1 Year.
 Definition of Factory:
Factory means any premises including –
1. Where 10 or more workers are working, or were working on any day of the preceding 12 months and
in any part of which is manufacturing process is being carried on with the aid of power as is ordinarily
so carried on; or
2. Where 20 or more workers are working or were working on any of the preceding 12 months and in
any part of which a manufacturing process is being carried on without the aid of power is ordinarily so
carried on.
 A factory shall not include a mine subject to the operation of the Mines Act 1952 or a mobile unit
belonging to the armed forces of the Union, a railway running shed or hotel, restaurant or eating places.
 The state government is empowered to apply the provisions to any establishment irrespective of number
of employed persons. (Except where the work is done by the workers solely with the help of the
members of his family.)
 Manufacturing process: It means any process for- (i) making, altering, repairing, ornamenting,
finishing, packing, oiling, washing, cleaning, breaking up, demolishing or otherwise treating or adopting
any article or substance with a view to its use, sale, transport, delivery or disposal; or (ii) Pumping oil,
water, sewage, or any other substance; or (iii) Generating, transforming or transmitting power; or (iv)
composing types for printing, printing by letter press, lithography, photogravure or other similar process
or book-binding; or (v) Constructing, reconstructing, repairing, refitting, finishing or breaking up ships
or vessels; or (vi) Preserving or storing any article in cold storage.
 Approval, Licencing and registration of Factories:
The State Government is empowered to frame rules regarding approval, licensing and registrations of
Factories.
Prior to giving such approvals by the state government, the chief inspector of factories should inspect the
site to see new construction and extension of existing ones.
Inspector, Chief inspector Inspecting Staff is appointed by the state government.
Every District magistrate shall be the inspector of factories of his district.
The State govt. should appoint certifying surgeon to take care of the health-related issues in the
factories.
 Facilities:
Ambulance room if 500 or more workers are employed;
Canteen if 250 or more workers are employed.
Rest rooms / shelters with drinking water when 150 or more workmen are employed.
Crèches if 30 or more women workers are employed.
Full time Welfare Officer if factory employs 500 or more workers [Section 49].
Safety Officer if 1,000 or more workmen are employed.
 Working Hours:
A worker cannot be employed for more than 48 hours in a week.
He cannot be employed for more than 9 hours in a day.
At least half an hour rest should be provided after 5 hours.
Total period of work inclusive of rest interval cannot be more than 10.5 hours.
A worker should be given a weekly holiday. Overlapping of shifts is not permitted.

 Overtime Wages: If a worker works beyond 9 hours a day or 48 hours a week, overtime wages are
double the rate of wages are payable.
 Restriction on double employment: A workman cannot work in two factories.
 Employment of Women: A woman worker cannot be employed beyond the hours 6 a.m. to 7.00 pm.
State Government can grant exemption to any factory or group or class of factories, but no woman can
be permitted to work during 10 PM to 5 AM.
 A worker is entitled in every calendar year annual leave with wages at the rate of one day for every 20
days of work (provided that he had worked for 240 days or more in the previous calendar year)
 Child Employment:
Child below age of 14 should not be employed.
Child above 14 but below 15 years of age can be employed only for 4.5 hours per day or during the
night. He cannot be employed during night between 10 pm to 6 am.
Adolescent- A person over 15 but below 18 years of age is termed as ‘adolescent’. He can be employed
as an adult if he has a certificate of fitness for a full day's work from certifying surgeon. An adolescent is
not permitted to work between 7 pm and 6 am.
 The Factories Act, 1948, was amended in 1987 to insert a Separate Chapter IV-A (Provisions dealing
with hazardous processes) in the wake of the Bhopal gas tragedy.
Payment of Wages Act, 1936

 Applicability: - To whole of India.
To persons who are employed in- any factory/Railway/industrial establishment and whose wages do not
exceed Rs. 24000/- per month.
The State Government may after giving 3 months' notice of its intention of so doing by notification in
the Official Gazette extend the provisions of this Act or any of them to the payment of wages to any
class of persons employed in any establishment of class of establishments.
 Every employer shall be responsible for the payment to persons employed by him of all wages required
to be paid.
 Wage can be paid on daily, weekly, fortnightly & monthly only. (No wage-period shall exceed one
month.)
 Time of Payment of Wages:
Railway, factory or industrial or other establishment having less than 1000 employees- 7th of succeeding
month.
Other railway factory or industrial or other establishment having more than 1000 employees- 10th of
succeeding month.
For employees of port area, mines, wharf or jetty-7th of succeeding month.
If the employee is terminated or removed for the employment by the employer the wage of that
employee should be paid within 2 days from the day on which he was removed or terminated.
 Mode of payment - All wages shall be paid in current coin or currency notes or by cheque or by
crediting the wages in the bank account of the employee.

Bonded Labour System (Abolition) Act, 1976
 After the commencement of this Act, the liability of repayment of the debt would remain suspended and
extinguished.
The creditor can no longer force the worker to pay the debt. And there shall be no suit in any Court
regarding the recovery of the same.
 Any property of the bonded labour which was confiscated by landlords and was under any mortgage,
lien or other encumbrances shall be reinstated to the labourers and the debt related to the same shall be
discharged.
 A person who was unchained and set free under this Act from any bonds, shall not be shown the door
from residential complexes or premises that he was residing before the commission of this Act, by the
creditor.
 The creditor, by virtue of law, is prevented from accepting payment against any bonded debt which has
been withdrawn through this act.
 3-tier system of implementation: State government confers the District Magistrate with the power to
safeguard the provision of this Act. Further, the District Magistrate delegates the powers to an officer
who will have the implementing powers at the local level.
 The State government is responsible for appointing a vigilance committee at every district and sub-
division.
 When there arises a question of a debt claimed by bonded labour then the burden of proof will lie on
the creditor to prove that the debt is not a bonded debt.
 After the commencement of this Act, all the property which was kept on bonds were to be given back
to its original owner. This restoration shall be done within 30 days.
 The Executive Magistrate is conferred with the powers of a Judicial Magistrate of the first or second
class as per the case by the State government. These Executive Magistrates with the conferred powers of
a Judicial Magistrate will conduct the trial accordingly.
 Civil Courts do not have jurisdiction pertaining to cases under this act and thereby no Civil Court can
issue an injunction relating to matters covered under this act.
 The Central government has the power to make rules or laws under this act through a notification in
the Official Gazette.
Maternity Benefit Act, 1961

 Maternity Benefit Act, 1961 has been amended through the Maternity (Amendment) Act, 2017.
 Applicability:
The Act is applicable to establishments such as Factories, (factory as defined in the Factories Act, 1948),
Mines (mine as defined in the Mines Act, 1952) and Plantations (plantation as defined in the Plantations
Labour Act, 1951).
It also applies to establishments belonging to Government and establishments wherein persons are
employed for the exhibition of equestrian, acrobatic and other performances.
It is also applicable to every shop or establishment defined under law, wherein 10 or more persons are
employed on a day during the preceding 1year.
 Eligibility: A woman must be working as an employee in an establishment for a period of at least 80
days in the past 12 months to be entitled to maternity benefit under the act.
 Employment of women prohibited during 6 weeks immediately following the day of her delivery,
miscarriage or medical termination of pregnancy.

 Maternity Benefit: Maximum period for which any woman shall be entitled to maternity benefit shall
be 26 weeks of which not more than 8 weeks shall precede the date of her expected delivery.
Women having more than two children, adopting mother and commissioning mother will get 12-week
leave.
 Creche Facility: Mandatory for organizations having 50 or more employees.
 Every woman shall be entitled to, and her employer shall be liable for, the payment of maternity benefit
at the rate of the average daily wage for the period of her actual absence. (The average daily wage means
the average of the woman's wages payable to her for the days on which she has worked during the period
of three calendar months immediately preceding the date from which she absents herself on account of
maternity.)
 If a woman entitled to maternity benefit or any other amount under this Act, dies before receiving such
maternity benefit or amount, the employer shall pay such benefit or amount to the person nominated
by the woman and in case there is no such nominee, to her legal representative.
 Medical bonus: Rs. 1000/-, if no pre-natal confinement and post-natal care is provided by the employer
free of charge. (The Central Government may from time to time, by notification in the Official Gazette,
increase the amount of medical bonus subject to the maximum of Rs. 20,000/-).
 Nursing breaks: Every woman delivered of a child who returns to duty after such delivery shall be
allowed in the course of her daily work two breaks of the prescribed duration for nursing the child until
the child attains the age of 15 months.
 Crèche Facility:
The Ministry of Women and Child Development issued the "National Minimum Guidelines for Setting
up and Running Crèches under Maternity Benefit Act, 2017 (the "Crèche Guidelines").
 Features of the Crèche Guidelines:
The crèche facility is for children of age groups of 6 months to 6 years of all employees including
temporary, daily wage, consultant and contractual personnel.
It should be located near/at the work place site or in the beneficiaries' neighbourhood within 500
metres. The crèche centre should have a minimum space of 10 -12 sq. ft. per child to ensure that
children can play, rest and learn. There is a recommended adult-child ratio with helpers, one crèche in
charge and one guard to be employed in a crèche unit of up to 30 children.
Child Labour (Prohibition and Regulation) Amendment Act, 1986

 Child – A person who has not completed his 14 years of age.
 Adolescent – A person who has completed his 14 years of age but has not completed his 18th year [Child
Labour (Prohibition and Regulation) Amendment Act, 2016].
 No child shall be employed/permitted to work in any establishment, occupation or process.
 Under the Act, a Technical Advisory Committee is constituted to advice for inclusion of further
occupations & processes.
 According to the new amendment, child is allowed to work at certain places mentioned below. (a) helps
his family or family enterprise, which is other than any hazardous occupations or processes, after his
school hours or during vacations; (b) works as an artist in an audio-visual entertainment industry,
including advertisement, films, television serials or any such other entertainment or sports activities
except the circus, subject to such conditions and safety measures, as may be prescribed. (Provided that
no such work under this clause shall affect the school education of the child.)
 The Child Labour (Prohibition and Regulation) Amendment Act, 2016permit employment of
adolescent labour except in hazardous processes or occupation.
(For this purposes, “hazardous process” has the meaning assigned to it in Factories Act, 1948.)
Employees State Insurance Act 1948 (ESI Act 1948):
Social security provisions made in the ESI Act 1948 protect the employees against financial distress
arising out of events of disablement, sickness, or death due to employment injury. Employees State
Insurance provides cash compensation for the above cases.
Employees’ State Insurance Corporation (ESIC) administers Employees State Insurance Act 1948.
Employees’ State Insurance Corporation (ESIC) is a statutory corporate body that is established under the
employee’s state insurance act in India.
Benefits of the Employees State Insurance Act 1948 are as follows:
Medical Benefit- medical care will be given to the person and his family members. There will be no ceiling
on the expenditure.
Maternity Benefit- for pregnancy is payable for 26 weeks as well under the ESI Act 1948, which can be
extended up to one month on medical advice.
Sickness Benefit- it will be given in the form of cash compensation at the rate of 70 percent of wages.
Dependants Benefit- this is paid in the form of monthly payments to the dependants in cases where the
death occurred due to occupational hazards or employment injury.
Disablement Benefit- Temporary disablement benefit (TDB) at the rate of 90% of wage is payable so long
as the disability continues.
Permanent disablement benefit (PDB) is paid at the rate of 90% of wage in the form of monthly
payments. It depends on the extent of the loss.
Other Benefits of Employees State Insurance Act 1948
Funeral Expenses, Physical Rehabilitation, Old Age Medical Care, Confinement Expenses, Vocational
Rehabilitation
Coverage of Employees State Insurance Act 1948:
The Employees State Insurance applies to the factories and other establishments institutions where 10 or
more persons are employed. However some states, the limit is 20.
Under section 1(5) of the Employees State Insurance Act 1948, the ESI scheme has been extended to
hotels, shops, cinemas, and restaurants, including road-motor transport, preview theatres and newspaper
establishments where employees are 10 or more.
Again under section 1(5) of the Employees State Insurance Act 1948, the ESI scheme has been extended
to educational institutions and private medical employing more than 10 or more persons.
The ESI scheme is not notified in 526 districts in 35 UT and states, which includes 346 complete districts,
95 district headquarters and 85 districts.

Payment of Gratuity Act 1972:
The Payment of Gratuity Act, 1972 is an act to provide gratuity to the employees working in factories,
oil fields, plantations, ports, etc. It extends to the whole of India. (In the case of plantations and ports, it
shall not extend to the state of Jammu and Kashmir). It came into effect from 16th September 1972.
Highlights of Payment of Gratuity Act, 1972
1) The Payment of Gratuity Act, 1972 shall follow to the subsequent: Factory, mine, oilfield, plantation,
port and Railway Company.
Every save or established order or some other established order notified through the primary authorities
wherein ten or extra people are hired, or had been hired, on any day of the previous twelve months.
2) An worker (now no longer hired in a seasonal established order) is stated to be in non-stop carrier
beneath the organisation for a duration of twelve months if the worker has labored for: 190 days beneath
the floor in a mine or in an established order which goes for much less than six days a week. 240 days, in
some other case.
3) An worker (now no longer hired in a seasonal established order) is stated to be in non-stop carrier beneath
the organisation for a duration of six months if the worker has labored for: 95 days, beneath the floor in a
mine or in an established order which goes for much less than six days a week. One hundred and twenty
days, in some other case.
4) To calculate the quantity of days on which a worker has without a doubt labored beneath an
organisation, the subsequent days also are considered:
5) An worker (hired in a seasonal status quo) is stated to be in non-stop provider beneath the corporation
for a length of twelve months or six months if he has in reality labored for now no longer much less than
seventy-5 percentage of the variety of days on which the status quo changed into in operation for the
duration of such length.
7) Under the Payment of Gratuity Act, 1972, gratuity will be payable to an worker at the termination of
his employment on the subsequent grounds after he has rendered non-stop provider for now no longer much
less than 5 years- Superannuation Retirement or resignation, Death or disablement because of
coincidence or disease.
8) If the termination of the employment is because of loss of life or disablement, 5 years of non-stop
provider shall now no longer be necessary. In the case of loss of life of the worker, gratuity payable to
him will be paid to his nominee. If no nomination has been made, it will be payable to his heirs.If the
nominee or inheritor is a minor, the percentage will be deposited withinside the financial institution or
economic group via way of means of the controlling authority.
9) The corporation shall pay gratuity to a worker on the price of Fifteen days wages for each finished year
of provider. Average of the entire wages obtained for a length of 3 months, with inside the case of piece
rated employees (Overtime wages aren't considered).
Seven days wages for every season, within side the case of seasonal employees.10) Section 4A of the act is
concerning the availability of obligatory coverage to the employees.
If a corporation fails to make any coverage top class fee or fails to make a contribution to an accepted
gratuity fund, he will be at risk of pay the gratuity amount (which include hobby for not on time payments)
to the controlling authority.

If any character contravenes the above provisions, he will be punishable with a most excellent of 10000
rupees and an excellent of 1 thousand rupees for every day, within side the case of a persevering with
offense.
10) Section 4A of the act is regarding the provision of compulsory insurance to the employees.
If an employer fails to make any insurance premium payment or fails to contribute to an approved gratuity
fund, he shall be liable to pay the gratuity amount (including interest for delayed payments) to the
controlling authority.
If any person contravenes the above provisions, he shall be punishable with a maximum fine of ten
thousand rupees and a fine of one thousand rupees for each day, in the case of a continuing offence.
12) Any person who makes false statements or false representations to avoid any payment to be paid by
himself or any person under this act shall be punishable with a maximum imprisonment of six months or
with a maximum fine of ten thousand rupees or with both.
Any employer who contravenes any provisions of this act shall be punishable with imprisonment for a term
which shall not be less than three months but may extend to one year, or with fine which shall not be less
than ten thousand rupees but may extend to twenty thousand rupees, or with both.
If the offence is related to the non-payment of any gratuity, then the employer shall be punishable with
imprisonment for a term which shall not be less than six months but may extend to two years or lesser term
of imprisonment or the imposition of a fine decided by the court.
13) Payment of Gratuity: (1) Gratuity shall be payable to an employee on the termination of his
employment after he has rendered continuous service for not less than five years.
The amount of gratuity payable to an employee shall not exceed ten lakh rupees.
(Parliament passes bill in 2020 that lets govt double tax-free gratuity to Rs 20 lakh. The ceiling of tax-
free gratuity stands enhanced to Rs 20 lakh from existing Rs 10 lakh)
Workmen Compensation Act of 1923:

Objective of Workmen Compensation Act
The Workmen Compensation Act of 1923 was formed majorly to give compensations to workmen in the
event of an accident.
The Act has it that employers should have duties and obligations that include the welfare of workers after an
injury resulting from employment in the same way they have reserved the right to make profits. The Act
aims to see workmen have a sustainable life after an employment-related accident.
Scope of the Act:
The Act is applicable only to those workmen working in industries as specified in the Act. The Act
affords protection to a workman from losses or injury caused by accident arising out of and in the course
of employment subject to certain exceptions as laid down in the Act.

Employers Liability for Compensation:
To make the employer pay compensation, the death or injury suffered by the workman must be consequence
of an accident arising out of and in the course of his employment is dependent upon the following four
conditions:
(1) The casual connection between the injury and the accident (i.e., personal injury is caused to workman
while on work);
(2) The injury and accident caused during the course of employment;
(3) The probability tenable to reason that the work contributed to the causing of personal injury; and
(4) The applicant proves that it was the work and the resulting strain which contributed to or aggravated the
injury.
Applicability of the Act:
The Act is applicable throughout India. The Act does not apply to those areas which are covered by the
Employees State Insurance Act, 1948.
The salient features of the Act are as follows:
I. Application: It applies to
(a) All railway servants not permanently employed in any administrative, district or subdivisional office of
a railway and not employed in any capacity as is specified in Schedule II to the Act;
(b) Persons employed in any such capacity as is specified in Schedule II to the Act. Schedule II includes
persons employed in factories, mines, plantations, mechanically propelled vehicles, construction works and
certain other hazardous occupations. In all, there are 48 employments listed in the Schedule; and
(c) Persons employed in employments added to Schedule II by the State Government in exercise of the
powers conferred on them under section 2(3) of the Act. In this connection, a statement indicating the
additions made so far by different State Governments is enclosed (Annex-I).
Contingencies in which Compensation is Payable:
Compensation is payable in case of temporary/permanent disablement or death as a result of an employment
injury. The contracting of any disease listed in Schedule III to the Act is deemed to be an injury by accident.
Occupational Diseases:
If a workman employed in the employment specified in Schedule III of the Act contracts any occupational
disease peculiar to that employment he becomes eligible for payment of compensation under the Act.
Settlement of Claims under the Act:
The claims for compensation broadly fall in three categories, namely (i) uncontested cases of disablement;
(ii) disputed cases of disablement and (iii) fatal cases.
Compensation
(a) Where death results from the injury: an amount equal to fifty per cent of the monthly wages of the
deceased *[employee] multiplied by the relevant factor; or an amount of *[one lakh and twenty thousand
rupees], whichever is more;

(b) Where permanent total disablement results from the injury: an amount equal to sixty per cent. Of the
monthly wages of the injured *[employee] multiplied by the relevant factor; *[one lakh and twenty thousand
rupees], whichever is more;
(c) Where permanent partial disablement result from the injury: (i) in the case of an injury specified in
Part II of Schedule I, such percentage of the compensation which would have been payable in the case of
permanent total disablement as is specified therein as being the percentage of the loss of earning capacity
caused by that injury; and (ii) in the case of an injury not specified in Schedule I, such percentage of the
compensation payable in the case of permanent total disablement as is proportionate to the loss of earning
capacity (as assessed by the qualified medical practitioner) permanently caused by the injury;
(d) Where temporary disablement, whether total or partial, results from the injury: a half monthly payment
of the sum equivalent to twenty-five per cent of monthly wages of the *[employee], to be paid in accordance
with the provisions of sub-section (2).
Plantations Labour Act, 1951:

Applies to the following plantations, that it to say,-
(a)To any land used or intended to be used for growing tea, coffee, rubber [cinchona or cardamom] which
admeasures 2 hectares or more and in which 15 or more persons are employed or were employed on any
day of the preceding twelve months.
(b)To any land used or intended to be used for growing any other plant, which admeasures 2 hectares or
more and in which 15 or more persons are employed or were employed on any day of the preceding twelve
months, if after obtaining the approval of the Central Government, the State Government by notification in
the Official Gazette, so directs.
Definitions:
(a) “Adolescent” means a person who has completed his fourteenth year but has not completed his
eighteenth year,
(b) “Adult” means a person who has completed his eighteenth year,
(c) “Child” means a person who has not completed his fourteenth year,
(d) “Day” means a period of twenty-four hours beginning at midnight;
Registration of plantations: Appointment of registering officers -The State Government may, by
notification in the Official Gazette,
Registration of plantations. -
(1) Every employer of a plantation, existing at the commencement of the Plantations Labour (Amendment)
Act. 1981 shall, within a period of sixty days of such commencement, and every employer of any other
plantation coming into existence after such commencement shall, within a period of sixty days of the
coming into existence of such plantation, make an application to the registering officer .for the registration
of such plantation.
Appeals against orders of registering officer:

Any person aggrieved by the order of a registering officer under sub-section (6) of Section 3-B may, within
thirty days of the publication of such order in the newspaper under that sub-section, prefer an appeal to such
authority as may be prescribed.
Power to make rules: The State Government may, by notification in the Official Gazette, make rules to
carry out the purposes of this Chapter.
Provisions as to health: Drinking water, Separate Conservancy for male and female, Medical facilities.
Welfare: Canteens, Recreational facilities, Educational facilities by State government.
Crèches: In every plantation wherein fifty or more women workers (including women workers employed by
any contractor) are employed or were employed on any day of the preceding twelve months, or where the
number of children of women workers (including women workers employed by any contractor) is twenty or
more, there shall be provided and maintained by the employer suitable rooms for the use of children of such
women workers.
Housing facilities: It shall be the duty of every employer to provide and maintain necessary housing
accommodation-
(a)For every worker (including his family) residing in the plantation;
(b)For every worker (including his family) residing outside the plantation, who has put in six months of
continuous service in such plantation and who has expressed a desire in writing to reside in the plantation.
Appointment of Commissioners: By The State Government.
Welfare officers: In every plantation wherein three hundred or more workers are ordinarily employed the
employer shall employ such number of welfare officers as may be prescribed.
Weekly hours: Save as otherwise expressly provided in this Act, no adult worker shall be required or
allowed to work on any plantation in excess of [forty-eight hours] a week and no adolescent or child for
more than [twenty-seven hours] a week.
Night work for women and children- Except with the permission of the State Government, no woman or
child worker shall, be employed in any plantation otherwise than between the hours of 6 a.m. and 7 p.m.

PYQs on INDUSTRIAL RELATIONS AND LABOUR LAWS
Q.1. Match List I with List II and select the (a) Any industry the control of which by the
correct answer using the code given below the Union has been declared by any Central Act to be
lists: (EPFO EO/AO 2020) expedient in the public interest
List I (Term) List 11 (Explanation) (b) Any industry the control of which by the State
has been declared by any State Act to be
A. Closure 1. Permanent closing down of a
expedient in the public interest
place of employment
(c) Any industry the control of which by the
B. Workmen 2. Any person employed in any
Municipal bodies has been declared by any
industry to do skilled, unskilled or manual
Municipal Rules to be expedient in the public
work interest
C. Strike 3. Temporary closing down of (d) Any industry the control of which by the State
workplace by the management has been declared by any Central Act to be
expedient in the public interest.
D. Lockout 4. Cessation of work by
employees
Code 4. What is the minimum number of members

required for registration of a Trade Union? (EPFO
A B C D EO/AO 2020)
(a) 1 2 4 3 (a) 2 members
(b) 3 4 2 1 (b) 3 members
(c) 1 4 2 3 (c) 7 members

(d) 3 2 4 1 (d) 10 member
2. Who is an 'Adolescent' as per the Factories Act, 5. Which of the following disputes is/are
1948? (EPFO EO/AO 2020) considered as trade dispute(s) under the provision
of the Trade Union Act, 1926? (EPFO EO/AO
(a) Who has completed 15 years of age but is
2020)
less than 18 years
Any dispute of any person connected with
(b) Who is less than 18 years
1. Employment
(c) Who has completed 14 years of age but is less
than 18 years 2. Non-Employment
(d) Who has completed 16 years of age but is less 3. Conditions of Labour
than 18 years
Select the correct answer using the code given
3. What is a controlled industry? (EPFO EO/AO below :
2020)
(a) 1 only 9. Under which Schedule of the Companies Act,
2013, the format of financial statements are
(b) 2 and 3 only prescribed (EPFO EO/AO 2016)
(c) 1, 2 and 3 (a) Schedule I
(d) 1 and 3 only (b) Schedule II
(c) Schedule III

6. What is the maximum amount of gratuity (d) Schedule IV
payable to the employees under the Payment of
Gratuity Act, 1972? (EPFO EO/AO 2020)
a. 5, 00,000 rs 10. In the absence of any provision in the

partnership agreement, profit and loss are shared
b. 10, 00,000 rs by the partner (EPFO EO/AO 2016)
c. 15, 00,000 rs (a) In the ratio of the capital of partners
d. 20, 00,000 rs (b) Equally
(c) In the ratio of loan given by them to the

7. What is the maximum number of hours in a partnership firm.
week that an adult worker is allowed to work for? (d) In the ratio of the initial capital introduced by
(EPFO EO/AO 2020) the partners
a. 35 hours
b. 40 hours 11. Works Committee, Safety Committee and

c. 45 hours Canteen Management Committee are the
examples of (EPFO EO/AO 2016)
d. 48 hour
a. worker’s participation in management
b. worker’s education schemes

8. What is the maximum period in which the
appropriate government shall review and revise c. worker’s cooperatives
the minimum rates of wages under the Minimum d. worker’s suggestion schemes
Wages Act, 1948? (EPFO EO/AO 2020)
a. 2 years
12. Which one of the following is not part of the
b. 3 years aims and purposes of the ILO as per Philadelphia
c. 4 years Declaration? (EPFO EO/AO 2016)
d. 5 years (a) Labour is not a commodity.
(b) Freedom of expression and of association are

essential to sustained progress.
(c) Poverty anywhere constitutes danger to (c) Labour Court
prosperity everywhere.
(d) Industrial Employment Court
(d) The war against want requires to be carried
on with unrelenting vigour within each nation
and is solely the responsibility of the 16. A union whose membership may cover
government. workers employed in many industries,
employment and crafts is known as (EPFO
EO/AO 2016)
13. Which one of the following is an exception
from the five functional types of unionism (a) Industrial union
identified by Robert Hoxie? (EPFO EO/AO 2016) (b) General union
(a) Business Unionism (c) Craft union
(b) Predatory Unionism (d) Region-cum-industry level union
(c) Revolutionary Unionism
(d) Evolutionary Unionism 17. Which one of the following perspectives of

industrial relations is based on the assumption that
both the parties strive (and have opportunity) to
14. Which one of the following is the process in exercise economic (Wages and benefits) as well as
which representatives of workmen and employer political (Control) power? (EPFO EO/AO 2016)
involved in an industrial dispute are brought
together before a third person or group of persons (a) Pluralistic perspective
who facilitates/facilitate through mediation to (b) Unitary perspective
reach a mutually satisfactory agreement? (EPFO
EO/AO 2016) (c) Radical perspective
(a) Arbitration (d) Trusteeship perspective
(b) Adjudication
(c) Conciliation 18. The provision of workers’ participation in

management of industries is provided under
(d) Collective negotiation (EPFO EO/AO 2016)
(a) Article 39A of the Constitution of India

15. Questions relating to the application or (b) Article 43A of the Constitution of India
interpretation of a standing order certified under
the Industrial Employment (standing (c) Article 42 of the Constitution of India
Order)(Standing Orders) Act, 1946 may be
(d) Article 43B of the Constitution of India
referred to (EPFO EO/AO 2016)
(a) Industrial Tribunal
(b) Labour Commissioner

19. Which one of the following is not a trade (b) One of the employers’ representatives of the
union security measures? (EPFO EO/AO 2016) Board
(a) Closed shop system (c) One of the employees’ representatives of the
Board
(b) Agency shop system
d. A functionaries of the central government
(c) Open shop system nominated by the government.
(d) Union shop system
23. Which one of the following comes under the

20. Which one of the following is statutory ‘State List’ under the seventh schedule of the
machinery functioning at the central level? (EPFO constitution of India? (EPFO EO/AO 2016)
EO/AO 2016)
(a) Relief of the disabled and unemployable
(a) Central Implementation and Evaluation (b) Regulation of labour and safety in mines
Committee
(c) Regulation and control of manufacture, supply
(b) Central Board for Workers’ Education and distribution of salt
(c) Standing Labour Committee (d) Social security and social insurance
(d) Employee’s State Insurance Corporation
24. The assumption that “man is selfish and self

21. Which one of the following explains the centred and always tries to achieve his own ends
‘citizen concept’ of labour? (EPFO EO/AO 2016) even at the cost of others” explains which theory
of labour welfare? (EPFO EO/AO 2016)
(a) Labour is largely regarded by the employers as
operating organizations in industry. (a) Placating theory
(b) Labour is affected by the law of demand and (b) Police theory
supply. (c) Religious theory
(c) Labour has a right to be consulted in regard (d) Philanthropic theory
to the terms and conditions under which they
are supposed to work.
(d) Labour is a cog in the machine. 25. Dr. Aykroyd’s formula is associated with
determination of (EPFO EO/AO 2016)
(a) Fair wage

22. Who among the following can be appointed as
the Chairman of the Central Advisory Board (b) Minimum wage
constituted by the Central government under the
minimum wage act 1948? (EPFO EO/AO 2016) (c) Living wage
(d) Real wage

(a) One of the independent members of the
Board
26. Everyone, as a member of society, has the (a) 40.33 per labour hour
right to social security and is entitled to
realization, through national effort and (b) 41.67 per labour hour
international co-operation and in accordance with (c) 42.67 per labour hour
the organization and resources of each State, of
the economic, social and cultural rights (d) 43.33 per labour hour
indispensable for his dignity and the free
development of his personality. This statement
which is emphasizing the importance of social 29. The famous 'Giri' approach in Industrial
security has been expressed in which of the Relations in India espouses the cause of (EPFO
following? (EPFO EO/AO 2016) APFC 2015)
(a) Universal Declaration of Human Rights (a) Adjudication
(b) Philadelphia Declaration of the ILO (b) Compulsory Collective Bargaining
(c) Report of the First National Commission on (c) Conciliation
Labour
(d) Arbitration
(d) Directive Principles of State Policy of the
Indian Constitution
30. The Maternity Benefit Act, 1961 (M.B. Act)
provides for how many weeks' wages during the
27. For the first time in India, medical benefits as maternity period? (EPFO APFC 2015)
a non cash benefits was provided under (EPFO
EO/AO 2016) (a) 11 weeks
(a) The Employees’ State Insurance Act, 1948 (b) 12 weeks
(b) The Factories Act, 1948 (c) 13 weeks
(c) The maternity benefit Act 1961. (d) 14 weeks
(d) The Mines Act, 1952

31. Employees State Insurance Act, 1948 covers
factors like (EPFO APFC 2015)
28. Consider an industry with the following
features: (EPFO APFC 2015) 1. Factories and establishments with 10 or more
employees.
Budgeted monthly fixed cost = Rs.2, 20,000
2. Provision of comprehensive medical care to
Normal monthly output= 12000 per standard employees and their families.
labour hour
3. Provision of cash benefits during sickness and
Standard variable overhead rate = Rs.25 per maternity.
labour hour
4. Monthly payments in case of death or
What would be the total factory overhead rate? disablement.

Which of the above statements are correct? Codes:
(a) 1, 2 and 3 only (a) Both Statements (I) and Statement (II) are
individually true, and Statement (II) is the
(b) 1, 2 and 4 only
correct explanation of statement 1.
(c) 3 and 4 only (b) Both Statement (I) and Statement (II) are
(d) 1, 2, 3 and 4 individually true but Statement (II) is NOT the
correct explanation of statement 1.
(c) Statement (I) is true but Statement (II) is false.

32. Which of the following statements is true
about Industrial Policy since 1991? (APFC 2012) (d) Statement (I) is false, but Statement (II) is true.
(a) Only 5 industries related to security,

strategic and environmental concerns require 35. The main objective of the minimum wage act
industrial License 1948 is to safeguard the interest the workers
(b) An investor need not file an industrial engaged in: (APFC 2012)
entrepreneur Memorandum. (a) Unorganized sector
(c) There is no reservation of products for (b) Organized sector
production in small scale sectors.
(c) Industrial sector
d. The number of industries reserved for public
sector has been enhanced. (d) Agricultural sector
33. In which of the following Acts, housing 36. Match List-I with List-II and select the correct
facility is a statutory provision? (APFC 2012) answer using the code given below the lists: List-1
(Contribution) (APFC 2012)
(a) The Plantation labour act 1951.
A. Industrial Welfare Movement
b. The Factories Act, 1948
B. Human Relation thought
c. The Mines Act, 1952
C. Concept of Third Force
d. None of the above
D. Ahmedabad Experiment
List-II (Contributor)
34. Statement (I): Industrial relation is currently
more influenced by the external market forces 1. Charles A Myer
than the power play between employers and
employees. (APFC 2012) 2. A.K. Rice
Statement (II): The forces of globalization have 3. Robert Owen

made competition so imperative so imperative that 4. Elton Mayo
union and their tactics like stopping productivity
no more hold good. Code:
ABCD (c) The Directive Principles of State Policy
(a) 2 1 4 3 (d) None of the above
(b) 3 1 4 2
(c) 2 4 1 3 39. Which of the following is NOT covered by the

Employees Provident Fund and Miscellaneous
(d) 3 4 1 2 Provisions Act, 1952? (APFC 2012)
a) Pension
37. Match List-I with List-II and select the correct b) Provident Fund
answer using the code given below the lists: List-I
(Board/Committee) (APFC 2012) c) Deposit Linked Insurance
A. First National commission on labour 1969. d) Injury Compensation.
B. Wage Board for Working Journalists, 2009
C. Second National commission on labour 2002. 40. Which of the following statements about
Workmen's Compensation act 1923 is true?
D. Index Review Commission 2009. (APFC 2012)
1. G.K. Chadha a) It is not social security legislation.
2. Ravindra Verma b) Its name has been changed to the
3. P.B. Gajendragadkar Employee's Compensation Act in 2009.
4. G.R. Majithia c. It provides maximum compensation in the event

of death.
Code:
d) It does not provide compensation for
ABCD occupational diseases.
(a) 3 4 2 1
(b) 1 4 2 3 41. Which of the following legislation is

comprehensive social security legislation? (APFC
(c) 3 2 4 1
2012)
(d) 1 2 4 3
a) The Maternity Benefit Act
b) The Employees State Insurance Act

38. In which part of the Indian Constitution,
c) The Employees Compensation Act
workers participation in management has been
imported? (APFC 2012) d) The Employees Provident Funds and
Miscellaneous Provisions Act.
(a) The Preamble
(b) The Fundamental Rights

42. What is the maximum limit of gratuity payable 43. Which of the following is NOT one of the
under the Payment of Gratuity Act, 1972? (APFC features of the Special Economic Zones (SEZ)
2012) being set up for promoting exports? (APFC 2012)
a) 3 Lakhs rupees (1) Foreign workers will be allowed free entry

without Visa restrictions.
b) 7-5 Lakhs rupees
(b) The SEZ area will be treated as foreign
c) 10 Lakhs rupees territory for trade operations, duties and tariff.
d) 10.5 Lakhs rupees (c) There will be no routine examination by
customs authorities of import/export cargo.
(d) No license is required for import into the zone.

SOCIAL SECURITY IN INDIA
Social insurance:
Social insurance is a form of social welfare that provides insurance against economic risks. The insurance
may be provided publicly or through the subsidizing of private insurance. In contrast to other forms of social
assistance, individuals' claims are partly dependent on their contributions, which can be considered
insurance premiums to create a common fund out of which the individuals are then paid benefits in the
future.
Types of social insurance include:
 Public health insurance
 Social Security
 Public Unemployment Insurance
 Public auto insurance
 Universal parental leave
Features:
The contributions of individuals is nominal and never goes beyond what they can afford the benefits,
eligibility requirements and other aspects of the program are defined by statute; explicit provision is made to
account for the income and expenses (often through a trust fund); it is funded by taxes or premiums paid by
(or on behalf of) participants (but additional sources of funding may be provided as well); and the program
serves a defined population, and participation is either compulsory or so heavily subsidized that most
eligible individuals choose to participate.
Similarities to private insurance: Typical similarities between social insurance programs and private
insurance programs include:
 Wide pooling of risks;
 Specific definitions of the benefits provided;
 Specific definitions of eligibility rules and the amount of coverage provided;
 Specific premium, contribution or tax rates required to meet the expected costs of the system.
Differences from private insurance:

Typical differences between private insurance programs and social insurance programs include:
 Private insurance programs are generally designed with greater emphasis on equity between individual
purchasers of coverage, and social insurance programs generally place a greater emphasis on the social
adequacy of benefits for all participants.
 Participation in private insurance programs is often voluntary; if the purchase of insurance is
mandatory, individuals usually have a choice of insurers. Participation in social insurance programs is
generally mandatory; if participation is voluntary, the cost is heavily subsidised enough to ensure
essentially universal participation.
 The right to benefits in a private insurance program is contractual, based on an insurance contract.
The insurer generally does not have a unilateral right to change or terminate coverage before the end of
the contract period (except in such cases as nonpayment of premiums). Social insurance programs are

not generally based on a contract but on a statute, and the right to benefits is thus statutory rather than
contractual. The provisions of the program can be changed if the statute is modified.
 Individually purchased private insurance generally must be fully funded. Full funding is a desirable
goal for private pension plans as well, but is often not achieved. Social insurance programs are often not
fully funded, and some argue that full funding is not economically desirable.
Social security in India:

Social security in India includes a variety of statutory insurances and social grant schemes bundled into a
formerly complex and fragmented system run by the Indian government at the federal and the state level and
is divided into three categories: non-contributory and tax-payer-funded, employer-funded and lastly, joint-
funded.
1. Aadhar:
The government of India uses this unique identification number to distribute social security and welfare
measures to its citizens and legal residents.
2. Budget:
In budget expenditure on social protection (direct cash transfers, financial inclusion, social benefits, health
and other insurances, subsidies, free school meals, rural employment guarantee and housing grants for the
low income) take place.
3. Federal government social security bodies and programs:
National Pension System:
National Pension System (NPS) is a voluntary, defined contribution retirement savings scheme designed to
enable the subscribers to make optimum decisions regarding their future through systematic savings during
their working life. NPS seeks to inculcate the habit of saving for retirement amongst the citizens. It is an
attempt towards finding a sustainable solution to the problem of providing adequate retirement income to
every citizen of India.
Under NPS, individual savings are pooled in to a pension fund which are invested by PFRDA regulated
professional fund managers as per the approved investment guidelines in to the diversified portfolios
comprising of Government Bonds, Bills, Corporate Debentures and Shares. These contributions would grow
and accumulate over the years, depending on the returns earned on the investment made.
Employees' Provident Fund Organisation:
Employees' State Insurance: Employees' State Insurance (abbreviated as ESI) is a social security and health
insurance fund for Indian workers. The fund is managed by the Employees' State Insurance Corporation
(ESIC) according to rules and regulations stipulated in the ESI Act 1948. ESIC is a Statutory and an
Autonomous Body under the Ministry of Labour and Employment.
National Health Protection Scheme: While people working in the organised sector either get health
insurance through the Ayushman Bharat Yojana or the Employees' State Insurance. Ayushman Bharat
Yojana also provides coverage to the poor and people working in the unorganised sector.
Maternity Benefits: According to The Code on Social Security, 2020, all women employees are entitled to
26 weeks of fully paid maternity leaves.

Accident Assurance Scheme: Pradhan Mantri Suraksha Bima Yojana is available to people (Indian
Resident or NRI) between 18 and 70 years of age with bank accounts. It has an annual premium of ₹12.
Social Assistance and Grants: These are rights-based social assistance programmes funded through the
general taxation and have statutory backing.
National Food Security Safety Net: National Food Security Act, 2013
Free School Meals: Midday Meal Scheme
The Mid-day-Meal: It is a school meal programme of the Government of India designed to better the
nutritional standing of school-age children nationwide and is governed by the statutory act National Food
Security Act, 2013.
Welfare measures in various states:
Kanyashree is an initiative taken by the Government of West Bengal to improve the life and the status of
the girls by helping economically backward families with cash so that families do not arrange the marriage
of their girl child before eighteen years because of economic problem.
Amma Unavagam is a food subsidization programme run by the Government of Tamil Nadu in India.
Social Security Scheme thinkers:

Beveridge Report:
The Beveridge Report, officially entitled Social Insurance and Allied Services (Cmd. 6404), is a
government report, published in November 1942, influential in the founding of the welfare state in the
United Kingdom. It was drafted by the Liberal economist William Beveridge, with research and publicity
by his wife, mathematician Janet Beveridge who proposed widespread reforms to the system of social
welfare to address what he identified as "five giants on the road of reconstruction": "Want, Disease,
Ignorance, Squalor and Idleness". Published in the midst of World War II, the report promised rewards for
everyone's sacrifices. Overwhelmingly popular with the public, it formed the basis for the post-war reforms
known as the welfare state, which include the expansion of National Insurance and the creation of the
National Health Service.
Recommendations: The Report offered three guiding principles to its recommendations:
Proposals for the future should not be limited by "sectional interests". A "revolutionary moment in the
world's history is a time for revolutions, not for patching".
Social insurance is only one part of a "comprehensive policy of social progress". The five giants on the
road to reconstruction were Want, Disease, Ignorance, Squalor and Idleness.
Policies of social security "must be achieved by co-operation between the State and the individual",
with the state securing the service and contributions. The state "should not stifle incentive, opportunity,
responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary
action by each individual to provide more than that minimum for himself and his family".
Beveridge was opposed to "means-tested" benefits. His proposal was for a flat rate universal contribution
in exchange for a flat rate universal benefit. Means-testing was intended to play a tiny part because it created
high marginal tax rates for the poor (the "poverty trap").

Provident Fund –Types, Advantages and Disadvantages:
What Is the Provident Fund Meaning?
The provident fund is a compulsory retirement savings scheme in India. It was introduced in 1935 and is
currently managed by the Employees’ Provident Fund Organisation (EPFO). The EPFO administers the
Scheme on behalf of the Government of India.
Types of Provident Funds:
There are several types of provident funds, but the two most common are pension and provident fund.
Pension funds are special savings accounts that help retired people and their families maintain a comfortable
lifestyle in retirement. Provident funds are similar to pension funds, but they are specifically designed to
provide an income for individuals when they reach retirement age.
Some of the most popular provident funds types include the following:
1) Employees’ Provident Fund (EPF)
2) Public Provident Fund (PPF)
3) Industrial Welfare Provident Fund (IW PF)
4) Life Insurance Corporation (LIC) Provident Fund
Features of Provident Fund:
 First, the Provident Fund is automatic. This means that you don’t need to do anything to participate,
and your contributions are deposited directly into your account each month.
 Second, the Provident Fund is tax-free. This means that you don’t have to worry about paying taxes on
your contributions, which can be a major advantage over other retirement savings options.
 Third, the returns on your contributions are guaranteed. This means that your earnings will always
be at least as much as the amount you deposited, no matter how long it takes for the fund to reach its
target balance.
 Finally, the Provident Fund is growing every day. This means that even if the stock market
experiences dramatic changes over time, your retirement fund will continue to grow at a consistent rate.
Advantages of The Provident Fund include:

 Retirement savings that are tax-effective
 Regular income during retirement years
 Minimum initial contribution
 Wide range of investment options
 Safest Investment Avenue
 Assured returns
 Tax benefits
The Provident Fund Also Offers a Range of Other Benefits Such As:
 Accidental Insurance,
 Maternity Leave,
 And Education Subsidies.
Disadvantages of having a provident fund include:

 Accumulated Corpus may not high
 Longer lock-in period
 Money is inadequate for risks occurring early in working life.
 Inflation erodes the real value of savings.
Pradhan Mantri Krishi Sinchayee Yojana (PMKSY):

PMKSY is a Centrally Sponsored Scheme (Core Scheme) launched in 1st July, 2015. Centre- States will
be 75:25 per cent. In the case of the north-eastern region and hilly states, it will be 90:10. It is being
implemented by the Ministry of Jal Shakti, namely, Accelerated Irrigation Benefit Programme (AIBP), and
Har Khet Ko Pani (HKKP).
Its objectives are:
 Achieve convergence of investments in irrigation at the field level.

 Enhance the physical access of water on the farm and expand cultivable area under assured irrigation
(Har Khet Ko Pani).
 Enhance the adoption of precision - irrigation and other water saving technologies (More Crop Per
Drop).
 Enhance recharge of aquifers and introduce sustainable water conservation practices.
 Explore the feasibility of reusing treated municipal waste water for peri-urban agriculture.
 Improve on - farm water use efficiency to reduce wastage and increase availability both in duration
and extent.
 Ensure the integrated development of rainfed areas using the watershed approach towards soil and
water conservation
UDAN Scheme:
Ude Desh Ka Aam Naagrik (UDAN) was launched as a Regional Connectivity Scheme (RCS) under the
Ministry of Civil Aviation in 2016.
Objectives:
 To develop the regional aviation market.
 To provide affordable, economically viable and profitable air travel on regional routes to the common
man even in small towns.
Features:
 The scheme envisages providing connectivity to un-served and underserved airports of the country
through the revival of existing air-strips and airports. The scheme is operational for a period of 10
years.
 Under-served airports are those which do not have more than one flight a day, while unserved airports
are those where there are no operations.

Pradhan Mantri Kisan Samman Nidhi (PM-KISAN):
PM-KISAN is a central sector scheme launched on February 24, 2019 under Ministry of Agriculture
and Farmers Welfare that guarantees direct income support of Rs 6,000 for farmers.
Eligibility - It will be given per year to all landholder farmer’s families in the country except,
1. All Institutional Land holders.
2. Farmer families in which one or more of its members belong to following categories,
a) Former and present holders of constitutional post.
b) Former and present - Ministers/ State Ministers, M.Ps (Lok sabha& Rajya Sabha), MLAs (SLA & SLC)
c) Former and present Mayors of Municipal Corporations, Chairpersons of District Panchayats.
d) All serving or retired officers and employees of Central/ State Government Ministries
/Offices/Departments and its field units Central or State PSEs and Attached offices /Autonomous
Institutions under Government as well as regular employees of the Local Bodies.
e) All superannuated/retired pensioners whose monthly pension is Rs.10,000 / or more (Excluding Multi
Tasking Staff / Class IV/Group D employees)
f) All Persons who paid Income Tax in last assessment year.
g) Professionals like Doctors, Engineers, Lawyers, Chartered Accountants, and Architects registered with
Professional bodies and carrying out profession by undertaking practices.
 The amount will be given in three installments of Rs.2000 each.
 The amount will be transferred directly to the bank account of beneficiaries through Direct Benefit
Transfer. DBT will ensure transparency in the entire process and will save time for the farmers.
 This is to help them meet farm input and other costs during the crop season.
 The programme would be made effective retrospectively from December 1, 2018.
 The changes in land records after February 1, 2019 shall not be considered for this scheme.
 State Government and UT Administration will identify the farmer families which are eligible for support
as per scheme guidelines.
 Other Features - The cash transfer is not linked to the land size and hence it becomes an income
supplement to landowning households.
 It has left the landless tenants out of its scope.
PM Kisan Maan Dhan Yojana:

 It is a new central sector and pension scheme launched on September 12, 2019 under Ministry of
Agriculture & Farmers' Welfare, for only small and marginal farmers who own less than 2 hectares of
land. (While PM-KISAN is for all farmers)

 Under this Scheme, a minimum fixed pension of Rs.3,000/- is provided to the eligible small and marginal
farmers, on attaining the age of 60 years.
 It is a voluntary and contributory pension scheme, with entry age of 18 to 40 years.
 The beneficiary is required to make a monthly contribution of between Rs.55/- to Rs.200/- to the Pension
Fund, depending on the age of entry into the Scheme.
 Central Government will contribute equally to the beneficiary‘s contribution.
 The pension fund is managed by the Life Insurance Corporation of India (LIC).
 Farmers can also allow contribution to be made directly from the benefits drawn from the PM-KISAN
scheme.
 The beneficiary may exit from the scheme voluntarily or on failure of contribution or on demise.
 The beneficiaries may opt voluntarily to exit the Scheme after a minimum period of 5 years of regular
contributions
 On exit, only their contribution shall be returned by LIC with an interest equivalent to
1. Prevailing saving bank rates (within 10 years) 2. Either accumulated interest actually earned by the
Pension Fund or the interest at the savings bank interest rate, whichever is higher.
 The spouse is also eligible to get a separate pension of Rs.3000/- upon making separate contributions to
the Fund. On the death of the subscriber during the period of contribution, the spouse shall have the option
of continuing the Scheme by paying regular contribution. If the spouse does not wish to continue, the total
contribution made by the farmer along with interest will be paid to spouse. If there is no spouse, then total
contribution along with interest will be paid to the nominee.
 If the farmer died during the receipt of pension, the spouse or heir shall be entitled to receive 50% of
the pension as family pension, provided he/she is not already an SMF beneficiary of the Scheme.
 After the death of both the farmer and the spouse, the accumulated corpus shall be credited back to the
Pension Fund.
 Exception – The beneficiary should not be covered under any other statuary social security schemes and
it includes exceptions under PM-KISAN scheme.
Pradhan Mantri Fasal Bima Yojana:

 It is the flagship scheme of the government for agricultural insurance in India launched in 18th
February 2016 under Ministry of Agriculture in line with the One Nation-One Scheme theme.
 It is compulsory for farmers availing crop loans for notified crops in notified areas and voluntary for
non loanee farmers.
 Premium rate - There is no capping in premium and one premium rate on pan-India basis. It is 1.5%, 2%
and 5% for all Rabi, Kharif and annual horticultural/commercial crops, respectively.
 There is no upper limit on the government subsidy i.e the difference between premium and insurance
charges paid by the farmer.

 Losses covered - Non-Preventable risk such as Natural Fire, Storm, Hailstorm, Cyclone and Inundation
has also been included as a localized calamity. Post-Harvest losses also covered.
 A cluster approach will be adopted under which a group of districts with variable risk profile will be
allotted to an insurance company
 Use of Remote Sensing Technology, Smart phones & Drones for quick estimation of crop losses to
ensure early settlement of claims.
National Food Security Mission:

 It is a centrally sponsored scheme.
 It is launched to enhance the production of Rice, Wheat, Pulses, Coarse Cereals and commercial crops
(Cotton, jute and Sugarcane).
 Targets - Production of rice, wheat and pulses would be increased by 10, 8, 4 million tonnes respectively
and Coarse cereals by 3 million tonnes.
 Funding - 50:50 by Centre and State for food crops and 100% centre funding for cash crops.
 It would be implemented through cluster demonstration, distribution of high yield seeds with farm
mechanization, &Integrated pest management.
Stand up India scheme:

It was launched in 5 April 2016 under Ministry of Finance to promote entrepreneurship at the grass-root
level focusing on economic empowerment and job creation.
Aim: To leverage the institutional credit structure to reach out to the underserved sector of people such as
SCs, STs and Women Entrepreneurs.
Facilitates Bank Loans: The objective of this scheme is to facilitate bank loans between Rs.10 lakh and
Rs.1 crore to at least one SC or ST borrower and at least one woman borrower per bank branch of
Scheduled Commercial Banks for setting up a Greenfield enterprise.
This enterprise may be in manufacturing, services or the trading sector.
Eligibility:
SC/ST and/or women entrepreneurs of above 18 years of age.
Loans under the scheme are available for only Greenfield projects.
Borrower should not be in default to any bank or financial institution.
In case of non-individual enterprises, at least 51% of the shareholding and controlling stake should be held
by either an SC/ST or Woman entrepreneur.
New Changes:
The margin money requirement for loans under the Scheme has been reduced from 'upto 25%' to 'upto
15%' and activities allied to agriculture have been included in the Scheme.
Start Up India Scheme:
It aims at fostering entrepreneurship and promoting innovation by creating an ecosystem that is
conducive for growth of Start-ups launched on 16th January, 2016 under Ministry of Commerce and
Industry.
 According to the scheme, an entity headquartered in India shall be considered as a Startup up to 10 years
from the date of its incorporation/ registration.
 The annual turnover should also not exceed INR 100 crore in any preceding financial year and Entity
should not have been formed by splitting up or reconstructing a business already in existence.
 It provides
1. Simple Compliance Regime for startups based on Self-certification.
2. Single window clearance based on mobile App.
3. Legal support and fast-track patent examination by reducing 80% of the patent cost.
5. Faster exit for startups through modified new bankruptcy code ensuring 90 days exit window.
6. Credit Guarantee Fund for startups through Small Industries Development Bank of India (SIDBI).
7. Providing funding support through a Fund of Funds with a corpus of Rupees 10,000 crore
8. Tax exemption on capital gains invested in Fund of Funds. Tax exemption to startups for 3 years.
Exemption from labour inspection for 3 years.
 Rural India's version of Startup India was named the Deen Dayal Upadhyay Swaniyojan Yojana, which is
developed by Rural development ministry backed by MUDRA loans.
Sampoorna Bima Gram Yojana:

The Union Minister for Communications, Manoj Sinha has launched Sampoorna Bima Gram (SBG)
Yojana on 13 October 2017 and expanded coverage of Postal Life Insurance (PLI) in a bid to provide
affordable life insurance services to people particularly those living in rural areas.
 Under the scheme, at least one village (having a minimum of 100 households) will be identified in each
districts and provide with a minimum of one Rural Postal Life Insurance policy for each households.
 Coverage of all households in the identified village is the primary objective of this scheme.
 All villages under the Saansad Adarsh Gram Yojana will be brought under its ambit.
National Food Security Act, 2013:

It aims to provide subsidized food grains to approximately 2/3rdof India's population i.e 75% in rural
areas and 50% in urban areas will be covered under TPDS, with uniform entitlement of 5 kg/person/month.
 It converts the various existing food security schemes into legal entitlements (i.e.) from welfare based
approach to rights based approach.

 It includes the Midday Meal Scheme, ICDS scheme, the PDS and also recognizes maternity
entitlements.
 Under NFSA, each beneficiaries is entitled to 5 kilograms of food grains per month at Rs. 3, Rs. 2 , Rs.
1 per kg for rice, wheat and coarse grains respectively. It has been decided by the Government to
continue the above mentioned subsidized prices upto June, 2019. Thereafter prices will be as fixed by the
Central Government from time to time, not exceeding MSP. However, the beneficiaries under Antyodaya
Anna Yojana will keep receiving the 35 kg/household/month at same rates.
 NFSA also guarantees age appropriate meal, free of charge through local anganwadi for children up to 6
months and one free meal for children in age group 6-14 years in schools.
 Every pregnant and lactating mother is entitled to a free meal at the local anganwadi as well as maternity
benefits of Rs.6,000 in installments.
 These maternal benefits are not extended to Government employees, since other similar benefits are
provided.
 The identification of eligible households is left to state governments.
 It also has provisions for food security allowance to entitled beneficiaries in case of non-supply of entitled
food grains/meals.
Antyodaya Anna Yojana:

It is launched by the Ministry of Consumer Affairs, Food and Public Distribution on 25 December 2000
to provide food subsidies for poor people.
 The scheme aims to make Targeted Public Distribution System (TPDS) more focused and targeted
towards the poorest section of population.
 Beneficiary families under the scheme are distributed 35 kg of rice and wheat at the rates of Rs. 3 per kg
and Rs. 2 per kg respectively. Coarse grains, on the other hand, are distributed at the rate of Rs. 1 per kg.
 Other families that are not part of AAY but are covered under NFSA receive grains at the rate of Rs. 5 per
kg.
 Under the scheme, subsidies are fully borne by the central government and States/UT bears the distribution
cost.
 The scheme has been expanded to cover 2.50 Cr households and scale of issue has been increased to 35
kg/family/month.
Atal Bhujal Yojana:

 It is a Central Sector Scheme of Ministry of Jal Shakti aims to improve ground water management
through community participation in identified priority areas in seven States.
 It will be implemented over a period of 5 years (2020-21 to 2024-25).
 The states are Gujarat, Haryana, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh.

 It will promote panchayat led ground water management and behavioural changes with primary focus
on demand side management.
 It has two major components such as,
1. Institutional Strengthening and Capacity Building Component
2. Incentive Component for the States
Swachh Bharat Mission:

It was launched on 2nd October 2014 to accelerate the efforts to achieve universal sanitation coverage and
to put the focus on sanitation
 It aims at achieving Open Defecation Free (ODF) nation and a Swachh Bharat (Clean India) by 2nd
Oct, 2019, the 150th anniversary of Mahatma Gandhi.
 SBM is being implemented by the Ministry of Urban Development in urban areas & by the Ministry of
Jal Shakti in rural areas.
 Objectives - Elimination of open defecation, Eradication of Manual Scavenging, Modern and Scientific
Municipal Solid Waste Management, To effect behavioural change regarding healthy sanitation practices,
Generate awareness about sanitation and its linkage with public health, Capacity Augmentation for ULB‘s
and Creating an enabling environment for private sector participation.
 Components –
1. Household toilets, including conversion of insanitary latrines into pour-flush latrines;
2. Community toilets
3. Public toilets
4. Solid waste management
5. Public Awareness and IEC (Information, Education and Communication).
 Implementation - Behaviour change is the primary focus and fundamental tool for achievement of ODF
outcomes.
 It also promotes gender sensitive information, behaviour change guidelines and various mass education
activities.
 Funding - States will contribute a minimum of 25% funds towards all components to match 75%
Central Share. This will be 10% in the case of North East and special category States.
Digital India:
It is a flagship programme of the Government of India launched on July 1, 2015 with a vision to transform
India into a digitally empowered society and knowledge economy.
 The scheme is coordinated by the department of Electronics and IT and implemented by all
government departments.
 The scheme is to be monitored by a Digital India committee comprised of several ministers.
 Digital India has three core components. These includes
1. The creation of digital infrastructure,
2. Delivering services digitally,
3. Digital literacy
 9 Key points of Digital India Programme are
1. Universal Access to Phones
2. Broadband Highways
3. Public Internet Access Programme
4. e-Governance – Reforming government through Technology
5. e-Kranti – Electronic delivery of services
6. Information for All
7. Electronics Manufacturing – Target NET ZERO Imports
8. IT for Jobs
9. Early Harvest Programmes
 It is an umbrella programme which includes the hitherto National Optical Fiber Network (NOFN) to
connect 2, 50,000gram Panchayats by providing internet connectivity to all citizens.
 Digital India includes development of an electronic development fund and envisages Net-Zero
Electronics Import Target by 2020.
 Common Services Centers (CSC) scheme is one of the mission mode projects under the Digital India
Programme, Ministry of Electronics and IT.
Pradhan Mantri Jan Dhan Yojana:

 It is a flagship financial inclusion scheme under Ministry of Finance and launched on 28th August
2014 for 4 years and was later approved to continue beyond.
 The scheme facilitates the opening of bank accounts with zero balance for every household to ensure
access to financial services in an affordable manner.
 The scheme ensures access to a range of financial services like availability of basic savings bank
account, access to need based credit, remittances facility, insurance and pension.
 The 1st phase of the scheme focused on opening basic bank accounts and RuPay debit card with
inbuilt accident insurance cover of Rs 1 lakh.
 The 2nd phase (2015-2018) planned to provide micro-insurance to the people and pension schemes to
unorganized sector workers through Business Correspondents.

The 3rd Phase (from 2018) focus on opening accounts from "every household to every adult". Existing
Over Draft (OD) limit of Rs 5,000 to be raised to Rs 10,000. There will not be any conditions attached for
OD upto Rs 2,000.
 The free accident insurance cover for new RuPay card holders has been doubled to Rs 2 lakh.
 Also, the upper age limit for availing the overdraft facility has been hiked to 65 from the earlier 60
years.
Aam Admi Bima Yojana:

 AABY is a Social Security Scheme launched on 2nd October 2007 and administered through LIC to
provide Death and Disability cover for low-income families of India (unorganised sector workers) to
persons between the age group of 18 yrs to 59 yrs.
 It is a group insurance scheme providing insurance cover for a sum of Rs 30,000/- on natural death, Rs.
75,000/- on death or total permanent disability due to accident, Rs. 37,500/- for partial permanent
disability due to accident.
 The total annual premium under the scheme is Rs. 200/- per beneficiary, of which 50% is contributed
from the Social Security Fund created by the Central Government and maintained by LIC. The balance is
contributed by the State Government / Nodal Agency / Individuals.
Pradhan Mantri Suraksha Bima Yojana (PMSBY):

 It is launched by Ministry of Finance on 9th May, 2015 which aimed at providing accidental insurance
cover to the people belonging to the underprivileged sections of society.
The annual premium for PMSBY has been hiked from Rs 12 to Rs 20 first time from the inception of the
scheme.
 The coverage available will be Rs.2 lakh for accidental death or permanent total disability and Rs.1
lakh for permanent partial disability.
 The Scheme will be available to people in the age group 18 to 70 years with a savings bank account who
give their consent to join and enable auto-debit on an annual renewal basis.
 It is offered by Public Sector General Insurance Companies or any other General Insurance Company
who are willing to offer the product on similar terms.
This premium is auto-debited in one instalment on or before 1st June of every year. Individuals can exit and
re-join the scheme subjecting to conditions.
 It serves the goal of financial inclusion by achieving penetration of insurance down to the weaker sections
of the society.
In case of the death of the account holder, the benefits of the scheme can be availed by his/her nominee.
As per the latest PIB release, about 41.50 per cent of enrolment under this scheme belong to women, and
61.29 percent of claim beneficiaries are women.

Pradhan Mantri Jeevan Jyoti Bima Yojana:
 It is launched by Ministry of Finance on 9th May, 2015 which offers coverage for death due to any
reason.
The annual premium rates of both schemes have been revised from Rs 330 to Rs 436 first time from the
inception of the scheme.
Eligibility: Available to people in the age group of 18 to 50 and having a bank account. People who join the
scheme before completing 50 years can, however, continue to have the risk of life cover up to the age of 55
years subject to payment of premium.
Terms of Risk Coverage: A person has to opt for the scheme every year. He can also prefer to give a
long-term option of continuing, in which case his account will be auto-debited every year by the bank.
 A life cover of Rs. 2 lakhs is available for a one year period at a premium of Rs.330/- per annum per
member and is renewable every year.
 It is administered through LIC and other Indian private Life Insurance companies.
 A person can join PMJJBY with one Insurance company with one bank account only.
 It provides coverage for death only, therefore the benefit will only go to the nominee.
The Atal Pension Yojana (APY):

 It was launched on 9th May, 2015 to create a universal social security system for all Indians, especially
the poor, the under-privileged and the workers in the unorganised sector. With this introduction, the
enrolment under Swavalamban has been closed and the eligible subscribers were automatically migrated to
the APY unless they opt out.
It focuses on all citizens in the unorganised sector, who join the National Pension System (NPS)
administered by the Pension Fund Regulatory and Development Authority (PFRDA).
It is open to all bank account holders in the age group of 18 to 40 years and the contributions differ, based
on pension amount chosen.
Provided that from 1st October, 2022, any citizen who is or has been an income-tax payer, shall not be
eligible to join APY.
Subscribers would receive the guaranteed minimum monthly pension of Rs. 1000 or Rs. 2000 or Rs. 3000
or Rs. 4000 or Rs. 5000 at the age of 60 years.
The monthly pension would be available to the subscriber, and after him to his spouse and after their
death, the pension corpus, as accumulated at age 60 of the subscriber, would be returned to the nominee of
the subscriber.
In case of premature death of subscriber (death before 60 years of age), spouse of the subscriber can
continue contribution to APY account of the subscriber, for the remaining vesting period, till the original
subscriber would have attained the age of 60 years.
Subscribers can voluntarily exit from APY subject to certain conditions, on deduction of Government co-
contribution and return/interest thereon.

 It is open to all bank account holders who are not members of any statutory social security scheme.
 The Central Government would also co-contribute 50% of the subscriber‘s contribution or Rs. 1000 per
annum, whichever is lower for a period of 5 years upto 2020.
 APY can be opened through banks, Postal department and also through eNPS platform.
National Pension Scheme:

 It is a pension cum investment scheme launched by Ministry of Finance on 1st January, 2004 to
provide old age security to citizens.
 Any individual citizen of India (both resident and Non-resident) in the age group of 18-65 years can
join NPS.
 The scheme is regulated by Pension Fund Regulatory and Development Authority (PFRDA).
 The different sectors covered under the scheme are classified in to 2 categories.
Government Sector: Central Government/Central Autonomous Bodies Employees (except for armed
forces), State Government/State Autonomous Bodies Employees.
Private Sector Corporates (adopting NPS architecture) All Citizens of India.
 The employee of the various sectors contributes towards pension from monthly salary along with matching
contribution from the employer (central government/state govt/corporate).
 After retirement or exit from the scheme, the corpus is made available with the mandate that some portion
of the corpus must be invested into annuity to provide a monthly pension post retirement or exit from the
scheme.
 Recent Developments–PFRDA has now permitted Overseas Citizen of India (OCI) to enrol in NPS at
par with Non-Resident Indians.
 Now, any Indian citizen, resident or non-resident and OCIs are eligible to join NPS till the age of 65
years.
Varishtha Pension Bima Yojana:

 It is a pension scheme for the benefit of citizens aged 60 years and above.
 Under the Scheme the subscribers on payment of a lump sum amount get pension at a guaranteed rate of
9% per annum (payable monthly).
 Any gap in the guaranteed return over the return generated by the LIC on the fund is compensated by
Government of India by way of subsidy payment in the scheme.
 The scheme allows withdrawals of deposit amount by the annuitant after 15 years of purchase of the
policy.
 The scheme is administered through LIC.

Pradhan Mantri Vaya Vandana Yojana:
 It is insurance policy-cum-pension scheme launched by Ministry of Finance on 4th May 2017
exclusively for the senior citizens aged 60 years or above.
 The investment limit is Rs.15 lakh/senior citizen and provides an assured return of 8% p.a. for 10
years.
 It is exempted from Service Tax/ GST and LIC is the implementing agency.
 The ceiling of maximum pension is for a family as a whole; the family will comprise of pensioner,
his/her spouse and dependants.
 Premature withdrawal from the scheme is possible in case the money is required for the treatment of
terminal or critical illness of the person or spouse.
 The shortfall owing to the difference between the interest guaranteed and the actual interest earned shall be
subsidized by the Government of India and reimbursed to the Corporation.
Pradhan Mantri MUDRA Yojana:

 The programme was launched by Ministry of Finance on April 8, 2015 to give access to cheap credit to
poor and small fledgling businesspersons with the objective to provide self-employment.
 It is a scheme to extend collateral free loans by Banks, NBFCs and MFIs to Small/Micro business
enterprises and individuals in the non-agricultural sector to enable their business activities and to
generate self-employment.
 For implementing the Scheme, government has set up a new institution named, Micro Units Development
& Refinance Agency Ltd (MUDRA).
 It acts as a regulator for the micro finance sector looks after development and refinancing activities
relating to micro units.
 It provides refinance to all banks and Last Mile Financiers seeking refinancing of small business loans
given under PMMY.
 The scheme services whose credit needs are below Rs.10 lakh.
 Loans can be availed under three categories i. Shishu for loans up to Rs.50,000; ii. Kishor for loans above
Rs. 50,000 and up to Rs.5 lakh; iii. Tarun for loans above Rs.5 lakh and up to Rs.10 lakh.
 Mudra debit cards are issued to borrowers. Using these, they can withdraw the loan from any ATM in
India, as and when they need the money.
Pradhan Mantri Kisan Sampada Yojana:

 It is a Central Sector Scheme of Ministry of Food Processing Industries (MoFPI) that aims to
supplement agriculture, modernize processing and decrease Agriculture waste.
 It was previously known as Scheme for Agro-Marine Processing and Development of Agro-Processing
Clusters (SAMPADA).
 The scheme will be implemented in 2016-20, and the implementation will result in creation of modern
infrastructure, growth of food processing sector and providing better prices to the farmers.
 The following schemes will be implemented under it
1. Mega Food Parks
2. Integrated Cold Chain and Value Addition Infrastructure
3. Creation/ Expansion of Food Processing/ Preservation Capacities (Unit Scheme)
4. Infrastructure for Agro-processing Clusters
5. Creation of Backward and Forward Linkages
6. Food Safety and Quality Assurance Infrastructure
7. Human Resources and Institutions
Ayushman Bharat Programme:

 Ayushman Bharat (centrally sponsored scheme) is National Health Protection Scheme launched by
Ministry of Health and Family Welfare on 23 September 2018, which will cover over 10 crore poor
and vulnerable families based on SECC (Socio-Economic Caste Census) database (approximately 50
crore beneficiaries) providing coverage upto 5 lakh rupees per family per year for secondary and tertiary
care hospitalization to achieve the vision of Universal Health Coverage.
Ayushman Bharat - National Health Protection Mission will subsume the on-going centrally sponsored
schemes - Rashtriya Swasthya Bima Yojana (RSBY) and the Senior Citizen Health Insurance Scheme
(SCHIS).
 It comprises of two inter-related components:
1. Establishment of Health and Wellness Centre
2. Pradhan Mantri Jan Arogya Yojana (PMJAY)
 Health and Wellness Centre - National Health Policy, 2017 envisioned Health and Wellness Centres as
the foundation of India‘s health system.
 These will also provide free essential drugs and diagnostic services.
 First 'health and wellness centre' has been inaugurated in Bijapur district in Chhattisgarh.
 Pradhan Mantri Jan Arogya Yojana (PMJAY) - It aims to reduce out of pocket hospitalisation
expenses by providing health insurance coverage upto Rs.5 lakh/family/year for secondary and tertiary care
hospitalization.
 Also, a beneficiary covered under the scheme will be allowed to take cashless benefits from any
public/private empanelled hospitals across the country.
 To ensure that nobody from the vulnerable group is left out of the benefit cover, there will be no cap on
family size and age in the scheme.
 The insurance scheme will cover pre and post-hospitalisation expenses.
 All pre-existing diseases are also covered.
 It will also pay defined transport allowance per hospitalization to the beneficiary.
 Funding - The expenditure incurred in premium payment will be shared between central and state
governments in a specified ratio
1. 60:40 for all states and UTs with their own legislature.
2. 90:10 in NE states and the 3 Himalayan states of J&K, HP and Uttarakhand. 3. 100% central funding for
UTs without legislature.
 States would need to have State Health Agency (SHA) to implement the scheme.
 The scheme is creating a cadre of certified frontline health service professionals called Pradhan Mantri
Aarogya Mitras (PMAMs). PMAM will be primary point of facilitation for the beneficiaries to avail
treatment at the hospital and thus, act as a support system to streamline health service delivery.
Janani Suraksha Yojana:

 It is 100 % centrally sponsored scheme to provide a safe motherhood intervention under the National
Rural Health Mission (NHM). It is being implemented with the objective of reducing maternal and
infant mortality by promoting institutional delivery among pregnant women.
 There is no bar on age of mother, number of children or type of institution i.e a government or
accredited private health facility.
It was launched by Ministry of Health & Family Welfare in April 2005 by modifying the National
Maternity Benefit Scheme (NMBS).
 Financial assistance under JSY is available to all pregnant women in states that have low institutional
delivery rates, namely, UP, Uttarakhand, Bihar, Jharkhand, MP, Chhattisgarh, Assam, Rajasthan, Odisha,
and J&K. They are categorized as Low Performing States (LPS).
 In High Performing States (HPS), where the levels of institutional delivery are satisfactory, pregnant
women from BPL/SC/ST households only are entitled for JSY benefit.
 The scheme also provides performance based incentives to ASHAs.
Pradhan Mantri Surakshit Matritva Abhiyan:

 It is launched by Ministry of Health & Family Welfare on June 9, 2016 to provide assured,
comprehensive and quality antenatal care, free of cost, universally to all pregnant women on the 9th of
every month.
 It guarantees a minimum package of antenatal care services to women in their 2nd/3rd trimesters of
pregnancy at designated government health facilities.
 The health check-up includes a minimum package of prenatal care/antenatal care services i.e. care given
during pregnancy and medicines such as IFA supplements, calcium supplements etc. would be provided to
all pregnant women.

 The programme follows a systematic approach for engagement with private sector which includes
motivating private practitioners to volunteer for the campaign.
 It also laid special emphasis on early diagnosis, adequate and appropriate management of women with
malnutrition and adolescent and early pregnancies as these pregnancies need extra and specialized care.
 Thus it aims to improve the quality and coverage of Antenatal Care (ANC) including diagnostics and
counselling services as part of the Reproductive Maternal Neonatal Child and Adolescent Health
(RMNCH+A) Strategy.
Housing for All (URBAN):

 It envisions Housing for All by 2022 and it subsumes Rajiv Awasyojana and Rajiv RinnYojana
 It seeks to address the housing requirement of slum dwellers through urban poor including following
programme
1. Central assistance to Urban Local Bodies (ULBs) and other implementing agencies for Slum
rehabilitation with participation of private developers.
2. Promotion of Affordable Housing for weaker section through Credit Linked Subsidy
3. Affordable Housing in Partnership with Public & Private sectors
4. Subsidy for beneficiary-led individual house construction
 It covers all 4041 statutory towns as per Census 2011 with focus on 500 Class I cities in three phases.
 Centre and state will be funding in the ratio of 75:25 and in case of North Eastern and special category
States in the ratio of 90:10.
 Beneficiaries -Urban poor who does not own a pucca house, Economically Weaker Section (EWS) and
Lower Income Groups (LIG – eligible only for credit linked subsidy scheme).
 States/UTs have flexibility to redefine the annual income criteria with the approval of Ministry.
 Under the mission, a beneficiary can avail of benefit of one component only.
 HUDCO and NHB have been identified as Central Nodal Agencies (CNAs) to channelize this subsidy to
the lending institutions.
Deendayal Antyodaya Yojana:

 It aims to uplift the urban poor by enhancing sustainable livelihood opportunities through skill
development.
 It is an integration of National Urban Livelihood Mission (NULM) & National Rural Livelihood
Mission (NRLM).
DAY-NULM was launched by Ministry of Housing and Urban Affairs in the year 2013 by restructuring
the Swarna Jayanti Shahari Rozgar Yojana with an aim to benefit the urban poor including the urban

homeless. It is implemented under the Ministry of Housing and Urban Affairs. NULM aims at universal
coverage of the urban poor for skill development and credit facilities.
DAY-NRLM has been launched under the Ministry of Rural Development in June 2011 by restructuring
of Swarna Jayanti Gram Swarozgar Yojna (SGSY) with an aim to reduce the rural poverty by providing
them with employment opportunities. It also involves building strong community institutions and mobilizing
them to build strong self-help groups.
 Funding will be shared between the Centre and the States in the ratio of 75:25. For North Eastern and
Special Category - the ratio will be 90:10.
Pradhan Mantri Shram-Yogi Maandhan (PM-SYM):

 It is a voluntary and contributory Pension Scheme launched in February 2019 for Unorganized
Workers for entry age of 18 to 40 years with monthly income of Rs.15000 or less.
PM-SYM is a Central Sector Scheme administered by the Ministry of Labour and Employment and
implemented through Life Insurance Corporation of India and Community Service Centers (CSCs).
LIC will be the Pension Fund Manager and responsible for Pension pay out.
 It promises to provide assured pension of Rs 3,000 per month from the age of 60 years, in return for
making a monthly contribution of a nominal sum during the working age.
 The scheme will cover 10 crore workers in the unorganised sector in the first 5 years, making it one of
the largest pension schemes in the world.
They should not be covered under New Pension Scheme (NPS), Employees’ State Insurance
Corporation (ESIC) scheme or Employees’ Provident Fund Organisation (EPFO). He/She should not
be an income tax payer.
It functions on a 50:50 basis where prescribed age-specific contribution shall be made by the beneficiary
and the matching contribution by the Central Government.
 Family Pension - During the receipt of pension, if the subscriber dies, the spouse of the beneficiary shall
be entitled to receive 50% of the pension received by the beneficiary as family pension. Family pension is
applicable only to spouse. If a beneficiary has given regular contribution and died due to any cause (before
age of 60 years), his/her spouse will be entitled to join and continue the scheme subsequently by payment of
regular contribution or exit the scheme as per provisions of exit and withdrawal.
Portal PENCIL:
 Platform for Effective Enforcement for No Child Labour (PENCIL) is an electronic platform under
the Ministry of Labour and Employment to create a child labour free India.
 The portal creates a robust implementing and monitoring mechanism for enforcement of the legislative
provisions of National Child Labour Policy (NCLP).
 Since the subject of labour is in the concurrent list, the enforcement of the policy depends on respective
state governments.

 This online portal aims to connect the Centre to the state government, district and to all project societies
for effective implementation of NCLP.
Pradhan Mantri Ujjawala Yojana:

 It is launched by Ministry of Petroleum and Natural Gas on 1st May 2016 to provide free LPG
connections to Women from BPL Households by providing financial support of Rs 1600 for each new
LPG connection.
 The identification of eligible BPL families will be made in consultation with the State Governments and
the Union Territories based on the socio-economic and caste census data.
 Providing LPG connections to BPL households will ensure universal coverage of cooking gas in the
country which will empower women and protect their health.
 It aims to address serious health hazards associated with cooking based on fossil fuels. Non-
communicable diseases such as heart disease, stroke, chronic obstructive pulmonary disease and lung cancer
and Indoor air pollution causing acute respiratory illnesses in young children is addressed through this
scheme.
 It will also provide employment for rural youth in the supply chain of cooking gas.
PAHAL:
 Direct Benefit Transfer for LPG consumer scheme called, `PAHAL‘aims to reduce leakage of
subsidy, reduce intermediaries and eliminate duplicate LPG connections by introducing direct cash
transfer of subsidies.
 LPG consumers, who join the scheme, will get the LPG cylinders at market price and receive the subsidy
directly into their bank accounts.
 The scheme required the consumer to mandatorily have a bank account linked with Aadhaar number for
availing LPG Subsidy.
 If they do not possess Aadhaar number, they will have to link their bank account directly with their LPG
ID.
Ujwal DISCOM Assurance Yojana:

 It is launched by Ministry of Power on November 15, 2015 to provide financial and operational
turnaround of power distribution companies (DISCOMs) and aims at long term affordable and
accessible 24x7 power supply to all.
 It has target of making all DISCOMs profitable by 2018-19 through four initiatives such as improving
operational efficiencies of Discoms, Reduction of cost of power, Reduction in interest cost of Discoms,
Enforcing financial discipline on DISCOMs through alignment with state finances.
 Under this programme, States shall take over 75% of DISCOM debt over two years i.e. 50% of
DISCOM debt shall be taken over in 2015-16 and 25% in 2016-17.
 Government of India will not include the debt taken over by the states as per the above scheme in the
calculation of fiscal deficit of respective states in the financial years 2015-16 and 2016-17.
 States will issue non-SLR including SDL bonds in the market or directly to the respective banks /
financial institutions (FIs) holding the DISCOM debt to the appropriate extent.
 DISCOM debt not taken over by the state shall be converted by the banks / FIs into loans or bonds.
MNREGA:
 Mahatma Gandhi National Rural Employment Guarantee Act 2005 is an employment scheme to
enhance livelihood security in rural areas by providing at least 100 days of legal guaranteed demand
based wage employment in a financial year to every household whose adult members volunteer to do
unskilled manual work.
 A 60:40 wage and material ratio has to be maintained. No contractors and machinery is allowed.
 Wages are linked to Consumer Price Index (Agriculture labour).
The Ministry of Rural Development (MRD), Govt. of India is monitoring the entire implementation of
this scheme in association with state governments.
 The central government bears the 100% wage cost of unskilled manual labour and 75% of the material
cost including the wages of skilled and semi-skilled workers.
 If work is not provided within 15 days of applying, applicants are entitled to an unemployment
allowance.
The employment will be provided within a radius of 5 km: if it is above 5 km extra wage will be paid.
 MGNREGA is to be implemented mainly by gram panchayats.
 At least one-third beneficiaries shall be women. Wages must be paid according to the statutory minimum
wages specified for agricultural labourers in the state under the Minimum Wages Act, 1948.
 Social audit has to be done by the gram sabha at least once in every 6 months.
National Social Assistance Program:

 It is a social security and welfare programme to provide support to aged persons, widows, disabled
persons and bereaved families on death of primary bread winner, belonging to below poverty line
households.
 It comprises of five schemes, namely - (1) Indira Gandhi National Old Age Pension Scheme (IGNOAPS),
(2) Indira Gandhi National Widow Pension Scheme (IGNWPS), (3) Indira Gandhi National Disability
Pension Scheme (IGNDPS), (4) National Family Benefit Scheme NFBS) and (5) Annapurna.
 Under NSAP 100% Central Assistance is extended to the States/UTs to provide the benefits in
accordance with the norms, guidelines and conditions laid down by the Central Government.

Rashtriya Vayoshri Yojana:
 It is a scheme for providing physical aids and assisted-living devices for Senior citizens belonging to
BPL category.
 The scheme will address disabilities like low vision, hearing impairment, loss of teeth and locomotors
disability with such assisted living devices which can restore near normalcy in their bodily functions.
 The devices will be distributed in camp mode and will be implemented by Artificial Limbs
Manufacturing Corporation (ALIMCO), a Public Sector Undertaking under Ministry of Social Justice
and Empowerment.
 This is a Central Sector Scheme, fully funded by the Central Government.
 The expenditure for implementation of the scheme will be met from the "Senior Citizens' Welfare
Fund".
 Beneficiaries in each district will be identified by the State Governments/UT Administrations through a
Committee chaired by the Deputy Commissioner/District Collector.
Pradhan Mantri Matru Vandana Yojana:

 Since 2005, JSY pays Rs.1, 400 to poor women who deliver in a hospital, for the first two deliveries.
 National Food Security Act (2013) mandated the payment of no less than Rs.6,000 to all pregnant women,
irrespective of their income status.
 So the Ministry has formulated Indira Gandhi Matritva Sahyog Yojana. It was implemented using the
platform of Integrated Child Development Services (ICDS) Scheme and in selected 53 districts across the
country. Pan-India Expansion of Indira Gandhi Matritva Sahyog Yojana is called Pradhan Mantri Matru
Vandana Yojana (PMMVY)/Maternity Benefit Programmee.
 The Scheme provides cash incentives to pregnant and lactating women.
1. For the wage loss so that the woman can take adequate rest before and after delivery;
2. To improve her health and nutrition during the period of pregnancy and lactation;
3. To breastfeed the child during the first six months of the birth, which is very vital for the development of
the child.
 All Pregnant Women and Lactating Mothers (PW&LM), excluding those in regular employment with
the Government or PSUs or those who are in receipt of similar benefits under any law for the time being are
eligible.
 Pregnant Women and Lactating Mothers who are eligible will receive a cash benefit of Rs.5,000/- in
three instalment. The cash incentive is payable in three instalments for the first live birth, as normally, the
first pregnancy of a woman exposes her to new kind of challenges and stress factors.
 The cash transfer would be Aadhaar linked through the individual bank/post office account etc. in DBT
mode.

 It is a Centrally Sponsored Scheme and the cost sharing between Centre and States is 60:40 for all the
States and UTs (with legislature), 90:10 for NER and Himalayan States and 100% GoI share for UTs
without legislatures.
 Thus a PW&LM will get Rs. 5,000/- under PMMVY and the remaining cash incentive as per approved
norms under Janani Suraksha Yojana (JSY) after institutional delivery so that on an average, a woman gets
Rs. 6000/
Sukanya Samriddhi Yojana:

 It is launched as a part of the BetiBachaoBetiPadhao' campaign.
 It is a small deposit scheme for girl child to motivate parents to open an account in the name of a girl
child and for her welfare to deposit maximum of their savings.
 The account can be opened at any time from the birth of a girl child till she attains the age of 10 years in
any post office or authorized branches of commercial banks.
 A minimum of Rs. 1000 and maximum of Rs. 1.5 lakh can be deposited during a financial year and
fetch an interest rate of 9.1 % and provide income tax rebate.
 The account will get matured in 21 years from the date of opening of account or marriage of the girl child
after attaining 18 years of age.
 Partial Withdrawal for girl child education can be done when she cleared 10th class or turned 18
years.
 100% of the amount can be withdrawn after girl child turns 18 is allowed and the provision of not
allowing the withdrawal till the age of 18 is to prevent early marriage.

INSURANCE
Insurance in India:
Insurance - Meaning and Definition
The literal meaning of insurance would be an assurance against unforeseen and unfortunate loss. This
means, that if you encounter a less than normal event in your normal course of life, and happen to incur a
financial loss because of it, you can be compensated.
Legally insurance has been defined as a contract where the insurer agrees to compensate the insured
against the losses incurred due to any unforeseen contingency. The contract also involves a consideration
which is called a premium. The maximum available benefit amount is called sum assured or sum insured.
How does an Insurance Policy Work?
To understand how insurance works, you should know below terms:
1. Premium: is the money you pay to the insurance company to avail of insurance policy benefits.
2. Sum Insured: Sum insured is applicable for a non-life insurance policy like home and health insurance.
It refers to the maximum cap on the costs you are covered for in a year against any unfortunate event.
3. Sum Assured: Sum assured is the amount the life insurance company pays to the nominee if the insured
event happens (death of insured).
Important Terms of Insurance:

Contestable Period:
 The life insurance contestability period is a short window in which insurance companies can
investigate and deny claims. The period is two years in most states and one year in others, and it
begins as soon as a policy goes into effect.
 If you die within the contestability period, the life insurance company can investigate whether you
gave accurate information on your life insurance application. The company can deny paying the
death benefit if you lied - even if the cause of death has nothing to do with misrepresentation on your
application.
Gross Written Premium:
• The sum of direct premiums written and assumed premiums written before the consequences
conceded reinsurance is called Gross Premium written.
• The premiums issued on policies of the insurance subsidiaries of an insurance company during the
financial year are called direct premiums.
• The premiums that insurance subsidiaries of an insurance company received from an approved state-
ordered pool or under past fronting offices.
Actual Cash Value:
• In insurance sector, Actual Cash Value is the method estimating the value of insured property.
• It is calculated by subtracting depreciation from the replacement cost.
• ACV is always less than the cost to replace the damaged or stolen property. ACV is often used
by the insurance companies to calculate the amount to be paid against the damaged or lost
property to the policyholder.
Earned Premium:
• The part of the premium collected by an insurance company against the policy that has been
expired is called as the earned premium.
• Generally, the insurance premiums are payable in advance but the insurance company does not
fully earn them until the policy period expires.
• When the premium is paid, it is considered an unearned premium-thus, not a profit because the
insurance company still has an obligation to fulfill.
Maximum Possible Loss:
• It is the maximum loss of the insured property that an insurer would be expected to incur on a
policy.
• Normally, this sum would be all the property within the premise of the of a structure, in addition, a
loss to a nearby property because of its closeness.
• While determining the risk associated with underwriting a new insurance policy, the insurance
companies use diverse sets of data including Maximum Possible Loss (MPL).
• Maximum Possible Loss (MPL) helps the insurance companies to set the premium under the new
insurance policy.
Contestable Period:
• The life insurance contestability period is a short window in which Insurance companies can
investigate and deny claims. The period is two years in most states and one year in others, and it
begins as soon as a policy goes into effect.
• If you die within the contestability period, the life insurance company can investigate whether you
gave accurate information on your life insurance application. The company can deny paying the
death benefit if you lied - even if the cause of death has nothing to do with misrepresentation on your
application.
Human Life Value:
• HLV is the expected income of the insured person or in other words, it is the total income the
person is supposed to earn during the rest of his/her working life.
• For example, a person having 23 years of age will work till the age of 60 years and he is expected to
earn Rs. 85 lakh rest of his/her life span then Rs. 85 lakh will be the HLV of his/her.
• HLV is not the actual income of a person but it is the expected amount that should be targeted to
earn during his/her rest of life in order to live a financially secured life for himself/herself or for
his/her own loved one irrespective of the possibility of unprecedented death.
Certified Insurance Counselor:
• Certified Insurance Counselor (CIC) is an insurance agent professional certification designation.
• The CIC certification program was started by the National Alliance for Insurance Education &
Research in Austin, Texas in 1969.
• Some CIC courses can be used to fulfill state continuing education requirements for licensing as an
insurance agent.

History and evolution:
Advent of life insurance business in India with the establishment of the Oriental Life
1818
Insurance Company in Calcutta, started by Europeans
Bombay Mutual Life Insurance was the first Swadeshi life insurance
1870
company started in the Bombay Residency.
The Indian Life Assurance Companies Act 1912, was the first statutory measure to
1912 regulate life business. However, the norms were lax, that led insurance industry to face
problems in the aftermath of Great Depression in USA.
With a view to protecting the interest of the public, the earlier legislation was
1938 consolidated and amended by the Insurance Act, 1938 with tougher regulatory
provisions.
Nationalising the Life Insurance sector and Life Insurance Corporation (LIC) came
1956 into existence. The LIC had monopoly till the late 90s when the Insurance sector was
reopened to the private sector.
early 1990s The process of re-opening of the sector had begun.
The Govt. set up RN Malhotra committee to propose recommendations for reforms in

1993
the insurance sector.
On recommendations of Malhotra committee, Insurance Regulatory and Development

1999 Authority (IRDA) (made statutory body in 2000) was constituted as an autonomous
body to regulate and develop the insurance industry.
The subsidiaries of the General Insurance Corporation of India (GIC) were

2000 restructured as independent companies and GIC was converted into a national re-
insurer.
There are currently 57 insurance companies in India, of which 46 are from the private sector. There are 24
life insurance and 33 non-life insurance companies in India.
Insurance principles:
To ensure the proper functioning of an insurance contract, the insurer and the insured have to uphold the 7
principles of Insurances mentioned below:
1. Utmost Good Faith
2. Proximate Cause
3. Insurable Interest
4. Indemnity
5. Subrogation
6. Contribution
7. Loss Minimization
Importance of insurance sector:

Benefits of Insurance:
 The obvious benefit of insurance is the payment of losses.
 Manages cash flow uncertainty when paying capacity at the time of losses is reduced significantly.
 Complies with legal requirements by meeting contractual and statutory requirements, also provides
evidence of financial resources.
 Promotes risk control activity by providing incentives to implement a program of losing control
because of policy requirements.
 The efficient use of the insured’s resources. It provides a source of investment funds. Insurers
collect the premiums and invest those in a variety of investment vehicles.
 Insurance is support for the insured’s credit. It facilitates loans to organisations and individuals by
guaranteeing the lender payment at the time when collateral for the loan is destroyed by an insured
event. Hence, reducing the uncertainty of the lender’s default by the party borrowing funds.
 It reduces social burden by reducing uncompensated accident victims and the uncertainty of society.
 Sector helps in mobilizing savings of public to financial assets
 Reduces fiscal burden on govt. to run schemes for social security – reduction in fiscal deficit.
 Insurance sector also act as a stabilizer and it helps people in the situation of crisis (health, accident,
etc.)
 Spread of financial services in rural areas – IRDA Regulations provide certain minimum business to
be done in rural areas, in the socially weaker sections.
 Insurance is a financial instrument which turns saving into an investment–Circular flow of capital
 A well-developed insurance sector boosts risk-taking in the economy.
 Sector also provides much-needed support to family members in the case of loss of life or health.
 Insurance companies need to invest part of premium in social and economic infrastructure –
promotes socio-economic development.
 Insurance enables entrepreneurs to take bold and big-ticket decisions.
 Assets under management of insurance companies represent long-term capital, they also act as a pool
in which to invest in long-term projects such as infrastructure development.
 Budget-2019 Finance minister Nirmala Sitaraman in the Union Budget last year said that 100% FDI
will be permitted for insurance intermediaries. This will facilitate more investment by foreign
companies in insurance sector, increased competition, better services to consumer, better and robust
economic growth. FDI in the insurance sector was capped at 49% under the automatic route.
According to the policy, FDI for insurance company is still capped at 49%.

Insurance sector in India:
 India currently accounts for less than 1.5 per cent of the world’s total insurance premiums and
about 2 per cent of the world’s life insurance premiums despite being the second most populous
nation.
 India’s life insurance sector is the biggest in the world with about 360 million policies which are
expected to increase at a Compound Annual Growth Rate (CAGR) of 12-15 per cent over the next
five years.
 Government had last year raised the FDI limit in the insurance sector to 74% from 49%, it did
not cover LIC that is governed by a specific legislation.
 At present, the FDI policy does not prescribe any specific provision for foreign investment in
LIC which is a statutory corporation established under LIC Act, 1956. Union Cabinet cleared an
amendment to the FDI Policy to allow Foreign Direct Investment (FDI) up to 20% under the
“automatic route” in Life Insurance Corporation (LIC) ahead of its proposed Initial Public Offer
(IPO).
Banking sector vs insurance sector:

YEAR BANKING SECTOR INSURANCE SECTOR
Regulator RBI IRDAI

1948-49 Nationalization of RBI
1955 – 56 Nationalization of SBI Nationalization of the Life Insurance

sector and LIC came into existence.
1969 Nationalization of 14 Private Banks
1972 GIC Act – GIC and its 4 subsidiaries

tookover – 107 (private owned)
General Insurance Companies.
1980 Nationalization of 6 Private Banks
Reforms Narasimham committee I (1991) and Malhotra Committee (1993) +

In 1990s II (1998) + privatization and Private insurance companies were
liberalization of banking sector allowed + FDI was liberalized
Safeguards CRR, SLR, BASEL Investment Pattern, Solvency
Margin. For instance, Insurance
companies must invest minimum
“specified %” of premium in G-Sec,
they cannot invest more than
“specified %” of premium in private
companies shares or debentures etc.
They must not invest in companies
having less than “AA” credit rating
etc. Exact norms not imp.

Financial Inclusion and Priority Sector Lending (PSL) norms, Rural & Social Obligation Norms-
goal of Welfare 25% branches in unbanked rural areas every year “specified” number of
policies must be sold in rural areas,
PH/backward etc. Further Insurance
companies required to invest
minimum “specified” in affordable
housing projects, State Govt’s fire
equipment etc.
Delivery Channel Bank branch, Business Agents & brokers, Banks selling
Correspondence Agent (Bank-Mitra) insurance (Bancassurance),
Surveyor/Loss Assessors, Third Party
Administrators (e.g. Hospital
where treatment is given)
Types of Insurance:
There are two broad categories of insurance:
1. Life Insurance
2. General insurance
Life Insurance:
The insurance policy whereby the policyholder (insured) can ensure financial freedom for their family
members after death. It offers financial compensation in case of death or disability.
Life Insurance in India was nationalised by incorporating Life Insurance Corporation (LIC) in 1956. All
private life insurance companies at that time were taken over by LIC. In 1993, the Government of India
appointed RN Malhotra Committee to lay down a road map for privatisation of the life insurance
sector.
While purchasing the life insurance policy, the insured either pay the lump-sum amount or makes periodic
payments known as premiums to the insurer. In exchange, of which the insurer promises to pay an assured
sum to the family if insured in the event of death or disability or at maturity.
Depending on the coverage, life insurance can be classified into the below-mentioned types:
 Term Insurance: Gives life coverage for a specific time period.
 Whole life insurance: Offer life cover for the whole life of an individual
 Endowment policy: a portion of premiums go toward the death benefit, while the remaining is invested
by the insurer.
 Money back Policy: a certain percentage of the sum assured is paid to the insured in intervals
throughout the term as survival benefit.
 Pension Plans: Also called retirement plans are a fusion of insurance and investment. A portion from
the premiums is directed towards retirement corpus, which is paid as a lump-sum or monthly payment
after the retirement of the insured.

 Child Plans: Provides financial aid for children of the policyholders throughout their lives.
 ULIPS – Unit Linked Insurance Plans: same as endowment plans, a part of premiums go toward the
death benefit while the remaining goes toward mutual fund investments.
General Insurance:
Everything apart from life can be insured under general insurance. It offers financial compensation on any
loss other than death. General insurance covers the loss or damages caused to all the assets and
liabilities. The insurance company promises to pay the assured sum to cover the loss related to the vehicle,
medical treatments, fire, theft, or even financial problems during travel.
General Insurance can cover almost anything, and everything but the five key types of insurances available
under it are –
 Health Insurance: Covers the cost of medical care.
 Fire Insurance: give coverage for the damages caused to goods or property due to fire.
 Travel Insurance: compensates the financial liabilities arising out of non-medical or medical
emergencies during travel within the country or abroad
 Motor Insurance: offers financial protection to motor vehicles from damages due to accidents, fire,
theft, or natural calamities.
 Home Insurance: compensates the damage caused to home due to man-made disasters, natural
calamities, or other threats.
Life Insurance Corporation of India (LIC):

 The life insurance business/industry in the country was nationalised by the GoI in 1956 and fully
government-owned company was setup by an act of Parliament, to take over the private life insurance
companies.
 In 2018, LIC became majority shareholder in IDBI bank.
 Further in 2019, RBI classifies IDBI as a ‘private sector’ bank.
 LIC HQ (Mumbai) and Corporate magazineà “Yogakshema” (means well-being – Rigveda)
 LIC mottoà “Yogakshemam Vahamyaham” (means I ensure safety and well-beingof my devotees- Gita)
 Twin objectives of nationalisation of LIC
 To spread the message of life insurance for greater social security
 To mobilise people’s savings (collected as premiums) for nation building.

Disinvestment of LIC (2020):
 Union Budget-2020 stated that LIC Act will be amended. This move will convert LIC from a statutory
corporation into a listed company. This will enable govt. to sell part of its shareholding through Initial
Public Offering (IPO)
 Insurance products of LIC come with a sovereign guarantee by the Government. Hence, people prefer
to buy it over private sector insurance policies. This led to distortion of perfect competition.
 Reduction of shareholding by government will result into independent functioning of LIC.
 Prior to these developments, IMF (2018) and Financial Sector Legislative Reforms Commission (Justice
B. N. Sri Krishna) (FSLRC-2011) had also advised the disinvestment to Government of India.
 RN Malhotra Committee (1993) was appointed by the GoI to lay down a road map for
privatisation of the life insurance sector.
Life Insurance and Accidental (General) Insurance:
PRADHAN MANTRI
PRADHAN MANTRI JEEVAN
FEATURES SURAKSHA BIMA YOJANA
JYOTI BIMA (PMJJB)
(PMSBY)
18 to 50 years with bank account in 18 to 70 years with bank account in

Age India. NRIs eligible but payment in India. NRIs eligible but payment in
rupee currency only. rupee currency only.
LIC or any empanelled private life Four Public Sector, or any empaneled
Purchase from
insurance company. pvt. General Insurance company.
INR 436 per person/ annum INR 20 per person/ annum

Premium amount
Life Insurance General Insurance

Insurance Type
1 year “term” accident cum death

1 year “term” life insurance.
Nature of Plan insurance.
Accidental Death, murder, natural

Any type of death: INR 2 lakhs will disaster etc. INR 2
Return be returned lakhs. However, suicide, alcohol-
drugs related death will not be
eligible

General Insurance Entities in India:
Employees’ State Insurance Corporation (ESIC) under Labour Ministry – through

1948
an act of Parliament to protect selected category of workers.
Export Credit Guarantee Corporation of India (ECGC) under Commerce Ministry.

1957 Gives insurance cover to exporters, and credit guarantee to Bank/NBFC who loan to
exporters.
DICGCI Act – banks must buy deposit insurance from it- covers upto INR 5 lakh
1961 Although not considered a General Insurance Company in textbook sense because
does not directly sell insurance policy to any individual household/business firm.
General Insurance Nationalization Act – 107 (private) general insurance companies

were taken over by GIC and its 4 subsidiaries –
National insurance,
New India Assurance,
1972
United India,
Oriental
Later, Govt. took direct control over these 4 subsidiaries, and left GIC to take care of
re-insurance business.
Agriculture Insurance Company Limited (AIC), (formed with funding of GIC, above 4
2002
public sector General Insurance Companies and NABARD.)
Budget announced to merge National Insurance Company, United India Insurance

Budget 2018-
Company and Oriental India Insurance Company, however the plan is yet to
Feb
materialize.
Dept of Financial service (Min. of Finance) organized ‘Insurance Manthan’ for Public
Sector General Insurance at Delhi.
2018-Oct
Six-point agenda endorsedàfully insured society, customer orientation, digital-analytics
for future, sustainable-prudent business, reach for everyone and talent management.
Agricultural insurance in India:

Agriculture in India is highly susceptible to risks like droughts and floods. It is necessary to protect the
farmers from natural calamities and ensure their credit eligibility for the next season. For this purpose, the
Government of India introduced many agricultural schemes throughout the country.
Pradhan Mantri Fasal Bima Yojana: Covered in Social security section.
Livestock Insurance Scheme: In India provided "provide protection mechanism to the farmers and cattle
rearers against any eventual loss of their animals due to death.

Farm Income Insurance Scheme: Central Government formulated the Farm Income Insurance Scheme
(FIIS) during 2003-04. The two critical components of a farmer's income are yield and price.
National Agriculture Insurance Scheme: Government of India experimented with a comprehensive crop
insurance scheme which failed. The Government then introduced in 1999-2000, a new scheme titled
“National Agricultural Insurance Scheme” (NAIS) or “Rashtriya Krishi Bima Yojana” (RKBY).
Employees' Provident Fund Organisation (EPFO):

The Employees' Provident Fund Organisation (EPFO) is one of the two main organizations under the
Government of India's Ministry of Labour and Employment.It is a non-constitutional body that promotes
employees to save funds for retirement. It was launched in 1951.
It is responsible for regulation and management of provident funds in India, the other being Employees'
State Insurance.
The EPFO administers the mandatory provident fund, a basic pension scheme, and a disability/death
insurance scheme.
It also manages social security agreements with other countries. International workers are covered under
EPFO plans in countries where bilateral
Reinsurance:
Reinsurance, often referred to as “insurance for insurance companies,” is a contract between a reinsurer and
an insurer. In this contract, the insurance company—the cedent—transfers risk to the reinsurance company,
and the latter assumes all or part of one or more insurance policies issued by the cedent.
Micro-insurance:
Micro-insurance products offer coverage to low-income households or to individuals who have little
savings. It is tailored specifically for lower valued assets and compensation for illness, injury, or death.
IRDAI – Insurance Sector Regulator in India:
Following the recommendations of the Malhotra Committee report,

IRDA was setup in 1996, the statutory status given in 1999.
Organisation In 2014, its name changed to Insurance Regulatory and Development
Authority of India (IRDAI). It is headquartered at
Hyderabad (Telangana). (SEBI and RBI are at Mumbai)
Total 10à One Chairman (5yrs or 65 yrs) and 9 members (5yrs or 62 yrs)
Structure
They are eligible for re-appointment.

IRDAI gives separate licenses for life, general & re-insurance companies.
Prescribes norms for insurance companies for accounting, solvency, audit,
commission to agents etc. It can penalize companies, suspend or cancel
registration. (Appeal against order lies in Securities Appellate Tribunal
(SAT).
Functions
Norms for agents & brokers, banks selling products (Bancassurance),
Surveyor/ Loss Assessor, and Third-Party Administrators (e.g. Hospital)
Consumer grievance redressal via Insurance Ombudsman.
IRDAI is member of Financial Stability and Development Council
(FSDC).
Challenges to insurance sector:

 Low penetration and density rates: Due to relatively few buyers and sellers of insurance in rural
areas, market power shifts to insurers and results in high prices, which further leads to lower
penetration.
 Poor rural participation and low household investment: As per the IRDAI, lack of awareness
about health insurance remains one of the major hurdles. Not surprisingly, less than 15 percent of the
populace purchase a health insurance policy. Despite liberalisation, insurance companies have
consistently ignored rural markets.
 Lack of adequate capital investments: Partly, low insurance penetration can be attributed to
inadequate capital with insurers. The expansion to the unpenetrated markets of the country remains a
challenge due to insufficient capital that needs to be invested.
 Accessibility and lack of financial literacy: The insurance sector is less accessible to people in
rural areas for a number of reasons, including pricing and lack of awareness.
 Low Awareness – A large majority of people in India believe that health insurance is not a worthy
investment.
 Poor Distribution – Distribution outside large cities is poor. The reason insurers and distributors do
not build a presence in small towns is that it is unviable.
 Insurance is highly regulated, but healthcare is equally unregulated, so it creates supply demand
mismatch between (doctors-hospitals) vs. patients. Moreover, standardized medical treatment costs
difficult to ascertain (unlike car damage). This problem further aggravated by delays in claim
settlement so discourages to renew health policy.
 Capital intensive industry– Private players not generating enough profits due to poor returns in
share market. Soaring commission rates and marketing reduces profitability further.
 Costly products – Lack of innovative custom and tailor-made policies for MSME. This results
into under insurance (client not taking sufficient insurance to cover losses)
 Lack of required skill set – with the insurance agents. Need of more skill and network more than
banker.
 Rural folks – they are either disinterested or un-served despite no. of schemes and & IRDAI norms
which are in place.
 Sales centric focus – Insurers have been focusing on growing sales even if that creates a distortion
in pricing for individuals.
 Perception by influencers – Often, the life insurance industry is portrayed (by media and
influencers) in a negative manner and hence the consumers become skeptical.
 Fewer product innovations – While many essential products to mitigate risk are available, there
are gaps in the insurance product portfolio that leaves large risks uninsured.
 Hesitation by peoples in buying House, Factory, Fire, Theft insurance due to fear of discovery of
‘asset value’ which could result into IT/GST raids & ransom demands. As a result, India’s
“insurance gap” is high i.e. total assets (in value) divided by insured assets (in value).

PYQs on SOCIAL SECURITY IN INDIA & INSURANCE
1. Which one of the following is not an objective a. 21 years and 58 years respectively
under Pradhan Mantri Krishi Sinchayee
Yojana (PMKSY)? (EPFO EO/AO 2020) b. 18 years and 40 years respectively
c. 18 years and 50 years respectively

a. Providing subsidies to use fertilizer, high
yielding varieties (HYV) and pesticides d. 21 years and 60 years respectively
b. To achieve convergence of investments in
irrigation at the field level
5. Startup Hubs are agreed to be set up in (EPFO
c. To expand cultivable area under assured EO/AO 2016)
irrigation
1. IIITs
d. Improving on-farm water use efficiency
2. IISERs
3. NITs
2. Which one of the following is the name of the
scheme introduced as a well-targeted system of 4. Central Universities
service delivery to LPG customers? (EPFO
EO/AO 2020)
below.
a. SAHAJ
(a) 1, 2 and 3
b. PAHAL
(b) 1 and 4 only
c. UDAY
(c) 3 and 4 only
d. UDAN
(d) 1, 3 and 4
3. Under Sukanya Samriddhi Yojana, what is the

6. StandUp India Programme envisages each bank
maximum amount that can be deposited during a
branch to give loan between `10 lakh to `100 lakh
financial year? (EPFO EO/AO 2020)
(EPFO EO/AO 2016)
a. 1.5 lakh
1. to at least one SC/ST borrower
b. 1 lakh
2. to at least one woman borrower
c. 2 lakh
3. to at least one rural unemployed youth
d. 2.5 lakh borrower

below.
4. What is the minimum and maximum age at
which a subscriber can join the Atal Pension (a) 1 only
Yojana ? (EPFO EO/AO 2020)
(b) 2 and 3
(c) 1 and 3 (c) `20
(d) 1 and 2 (d) `12
7. Which one of the following is the correct set of 10. Consider the following statements in respect
contingencies identified by William beveridge in of Atal Pension Yojana: (EPFO APFC 2015)
his comprehensive social security scheme? (EPFO
EO/AO 2016) 1. Beneficiary must be in the age group of 18 to
40 years.
(a) Want, disease, ignorance, squalor and
2. Beneficiary will receive the pension only after
idleness
he attains the age of 60 years.
(b) Want, sickness, disability, squalor and idleness
3. After the death of a beneficiary, his
(c) Want, disease, old age, squalor and spousecontinues to receive the pension.
unemployment
4. No nominee of the beneficiary is permitted.
(d) Disease, invalidity, old age, unemployment
and ignorance. Which of the above statements are correct?
(a) 3 and 4 only
8. Which of the following statements is not correct (b) 1, 3 and 4 only

for Atal Pension Yojana? (EPFO EO/AO 2016) (c) 1, 2 and 3 only
(a) There is guaranteed minimum monthly pension (d) 1, 2, 3 and 4
for the subscribers ranging between 1,000 and
`5,000 per month.
b. The benefit of the minimum pension would be 11. Consider the following statements regarding
guaranteed by the Government of India. the Pradhan Mantri Suraksha Bima Yojana:
(EPFO APFC 2015)
c. Government of India co-contributes 50% of the
subscriber’s contribution or 1,000 per annum, 1. It is applicable for all bank account holders up
whichever is lower. to the age of 60 years.
(d) It is applicable to all citizens of India aged 2. It is a life insurance cover

above 40 years
3. It is an accident insurance cover.
4. The insurance covers death and permanent

9. Which one of the following is the amount of disability due to accident.
annual premium of the Pradhan Mantri Suraksha
Which of the above statements are correct?
Bima Yojana (PMSBY) for accident and disability
cover up to Rs 2, 00,000? (EPFO EO/AO 2016) (a) 1 and 2 only
(a) `100 (b) 3 and 4 only
(b) `50 (c) 2 and 3 only
(d) 1 and 4 only (d) 1, 2 and 3
12. Consider the following statements regarding 14. Which of the following are the typical
the Pradhan Mantri Jeevan Jyoti Bima Yojana: differences between the private insurance
(EPFO APFC 2015) programmes and the social insurance
programmes? (EPFO APFC 2015)
1. It is applicable to all adults above the age group
of 18 years. 1. Adequacy versus Equity
2. The premium is deducted from the account 2. Voluntary versus Mandatory Participation
holder’s bank account through 'auto debit facility’.
3. Contractual versus Statutory Rights
3. The life insurance worth is decided by the
account holder and he has to pay the annual 4. Funding
premium accordingly. Select the correct answer using the codes given
4. The life insurance amount is given to the family below:
after the death of the subscriber. (a) 1, 2 and 3 only
Which of the above statements are correct? (b) 1, 2 and 4 only
(a) 1 and 3 only (c) 3 and 4 only
(b) 1 and 4 only (d) 1, 2, 3 and 4
(c) 2 and 4 only
15. Which of the following are the instruments of
(d)2 and 3 only
providing social security in India? (EPFO APFC
2015)
13. What are the disadvantages of Provident Fund 1. Income Tax

Scheme? (EPFO APFC 2015)
2. Employees' Provident Fund
1. Money is inadequate for risks occurring early in
working life. 3. General Sales Tax
2. Inflation erodes the real value of savings. 4. LIC
3. It generates forced saving that can be used to 5. National Pension Scheme

finance national development plans. 6. Postal Provident Fund
Select the correct answer using the codes given Select the correct answer using the codes given
below: below:
(a) 1 and 2 only (a) 1, 2, 3 and 4
(b) 1 and 3 only (b) 2, 3, 4 and 5
(c) 2 and 3 only (c) 2, 4, 5 and 6
(d) 3, 4, 5 and 6 4. Loss of the marital partner
Select the correct answer using the codes given

below:
16. Social Security may provide cash benefits tom
persons faced with (EPFO APFC 2015) (a) 1, 2 and 3 only
1. Sickness and disability (b) 1, 2 and 4 only
2. Unemployment (c) 3 and 4 only
3. Crop failure (d) 1, 2, 3 and 4

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Join telegram @missioncapfhub | visit: www.missioncapfhub.com | Contact: 7057227225 pg.

1. Industrial Relations And Labour Laws. 03

2. PYQs (EPFO/APFC 2012-2021) on Industrial Relations 47

3. Social Security in India. 55

5. PYQs (EPFO/APFC 2012-2021) on Social Security in 91

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Approaches to Industrial Relations (IR):

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Theories of Trade Unionism

2) Webb’s theory of Industrial Democracy: According to Webb, trade unionism is an extension of

5) Tannenbaum’s Anti-technology Theory (Theory of Man Vs. Machine): Industrial revolution

6) Simons Theory of Monopolistic, anti-Democratic Trade Unionism: He denounced trade unionism as

7) Hoxie’s Theory of Business union/Functional classification of Unionism – It explained origin of trade

8) Common’s Pragmatic Approach/Environment Theory: This theory is based on a set of premises

Five functional types of unionism by Robert F. Hoxie:

1) Craft union- (Occupational union) It is organisation of workers employed in particular craft/occupation. It

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Types of Collective Bargaining:

Walton & McKersie Negotiation Framework (Behavioral theory of labour negotiations):

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 Afterwards, various trade unions came into being:

 Trade Union Act of 1923 and Industrial Disputes Act, 1929.

 In 1957, 15th session of Indian Labour Conference evolved code of discipline.

 Code of Discipline of Industries, 1962: Principles of the Code of Discipline:

 Index Review Commission 2009: G.K. Chadha

Labour Laws & Indian Constitution (Related Articles)

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Theories of Labour Welfare:

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8. Public Relations Theory:

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Declaration of Philadelphia (10 May 1944):

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Employees Provident Fund Organisation (EPFO):

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Pandit Deendayal Upadhyaya National Academy of Social Security (PDNASS):

V.V. Giri National Labour Institute (VVGNLI):

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Code on Industrial Relations Trade Unions Act, 1926

Code on Wages Payment of Wages Act, 1936

Code on Social Security Employees’ Provident Funds and Miscellaneous Provisions

Code on Occupational Safety, Health Factories Act, 1948

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Non-Employee Persons employed in a Persons employed in a

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 Mode of payment of wages:

State Advisory Board – Employees, Employers (equal in numbers as of employees), Independent

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Some more provisions of Code on Social Security:

 Employees’ Provident Fund:

 It mandates an employee or a worker (including an unorganised worker) to provide Aadhaar number to

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The Occupational Safety, Health & Working Conditions Code:

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