Participatory Universal Social Security System for all: When and How?

Rao V.B.J. Chelikani

For much of history, many Indians, like populations elsewhere, lived under conditions of material precariousness, fear, uncertainty, and insecurity about life and wellbeing, though these preoccupations varied across regions and periods and included phases of prosperity and social stability. This has led them to believe in a philosophy of life, which we can call a Povertarian philosophy, adopting a twisted version of the Karma theory to justify fatalism that accepts whatever happens to them or to others in society as a predetermined fact. This attitude imposed upon every human being to have a permanent physical and mental insecurity about his or her well-being and to accept suffering from ill-health and poverty. It helped one to avoid questioning oneself about one's own immediate personal role and responsibility for what happens to oneself or to others around one. Similar religious explanations for suffering have appeared in many societies. In Europe, from the early modern period onward, religious change associated with the Reformation coincided with broader economic, political, and intellectual transformations that increasingly emphasised individual conscience and civic responsibility, contributing over time to state-led social reforms such as those initiated by Bismarck in Prussia and later by the Beveridge reforms in Britain.  

In India, this poverty of social philosophy persisted even after independence and was translated into state policy by politicians and left-leaning intellectuals in the name of a ‘welfare state’. It rested on the assumption that large sections of the population are permanently and inevitably poor, and therefore dependent on rulers for relief. This outlook fostered a culture of entitlement and long-term dependency on state subsidies rather than self-empowerment. Consequently, India has lagged in its evolution toward genuine human development and social development. The state, on the other hand, has been dissipating its energies and resources in the pursuit of becoming a ‘great’ political state among other states, rather than a prosperous and self-reliant society. While all political parties publicly endorse the idea of a ‘welfare state’, the party in power effectively monopolises the declaration of parasitic welfare schemes and short-term relief measures targeted at vote banks, primarily to ensure its continuance in power. Governance thus becomes trapped within electoral cycles, leaving little space for sustained, long-term growth strategies extending beyond five years. Citizens are not encouraged to cultivate a work ethic, creating wealth by being productive, taking planned risks and sacrifices for their future, or developing resilience in the face of adversity. Instead, the state assumes the role of a perpetual provider. This approach is accorded philosophical legitimacy through the writings of economists such as Amartya Sen and Joseph Stiglitz.  

When a bus or train accident occurs, it has become customary for a minister to rush to the site amid intense media attention and announce an ex gratia grant of a few lakhs of rupees per victim. Leaders of the Opposition promptly express regret that the amount should have been higher. This competitive display of generosity is financed entirely by public money collected through taxes. What is striking is that no one pauses to consider a more dignified, rational, and sustainable approach to dealing with such tragedies. A far better solution would be to include a very small insurance premium in the cost of each ticket, thereby ensuring automatic and adequate compensation without political spectacle or discretionary announcements. A similar mindset is evident in another critical area. India faces persistent difficulties in constructing and operating nuclear reactors through foreign collaboration because the existing liability framework places the entire burden of long-term accident and radiation risks on foreign suppliers. In the absence of India’s participation in a contributory nuclear insurance or risk-sharing mechanism, potential international partners remain understandably reluctant to engage. Moving from ad hoc, politically-driven compensation to structured insurance and risk-sharing frameworks would not only be more efficient but also more dignified and economically sound.     

Furthermore, the people in power, the authorities, the bureaucrats and those segments of the population who have the bargaining power and leverage, like the workers' unions, are covered by a poorly-implemented bureaucratic system at the cost of the public exchequer. At present, the existing administrative measures benefit less than 10% of Indians. The pension funds accumulated do not have any healthy impact on either the economy or the subscribers.       

At the individual level, people think and behave according to their above-mentioned Povertarian philosophy. It means they are making the Life Insurance Corporation of India the most profitable insurance firm in the country, as their children would get a good amount of money after their death. The subscribers thereby show their responsibility towards a better future of the family, more than the responsibility towards a better personal living condition for themselves. The LIC does not cover health insurance and invests in other ventures for more profit. The existing insurance companies, both private and state-owned, are so irresponsible socially that they try to get rid of their subscribers for health insurance when they attain the age of 75 and above by increasing the premiums in an exorbitant manner.

Because every human being is born into and raised within a community, individuals and society remain permanently interdependent. This interdependence creates a shared social responsibility: each person has a duty to contribute to a harmonious society that benefits all, while social development must ultimately serve human development. At the same time, communities have an obligation to respect the fundamental human rights of all their members, not merely those of the most powerful or dominant groups. From this perspective, any state investment in national development is misguided if it fails to promote social well-being and human dignity. Yet, in practice, the state, a political organisation that presents itself as a necessity, is often controlled by ambitious and powerful actors. These actors frequently sustain their authority by cultivating fear: fear of internal others and fear of external states. In the realm of diplomacy, states openly assert that they act solely in pursuit of their own sovereign interests, rather than in the shared interests of people across borders. This approach reinforces division and undermines the very human and social development that national progress is meant to achieve.

II. Why a System?

We need a system founded on the principle of mutuality of interests: individuals contribute according to their capacity and receive benefits according to their needs. Social responsibility and solidarity are expressed through shared risks across generations, income groups, and social classes, ensuring that no one faces life’s uncertainties alone. By pooling contributions from a large number of people, such a system spreads risks widely, making protection affordable, predictable, and stable for all. Collective risk-sharing reduces inequality and prevents vulnerable individuals from falling into poverty due to unforeseen events. It also strengthens social cohesion by reinforcing a shared responsibility for collective welfare. A system provides structured, long-term protection against predictable life risks such as old age, disability, accidents, thefts, disasters, ill-health, and unemployment. Given India’s changing socio-economic conditions, the system should be ‘pro rata’ contributory, promoting shared responsibility and long-term financial sustainability. Crucially, it offers legal entitlements, giving citizens predictable and enforceable benefits. Because risks are spread across the entire population, support remains stable even during economic shocks. The System reflects participatory economic democracy. All working residents, not only citizens, can participate by contributing and electing their own managers. This democratic governance makes the system more reliable and responsive. It can be as comprehensive as its subscribers collectively decide to make it. When deficits occur, such networks can legitimately seek public funding to cover them, as the resources involved are ultimately derived by the governments from the contributors’ own tax payments.

India now has the potential to develop an ever-growing network of protections and an ever-growing range of risks, ultimately evolving into a comprehensive system in which both producers and consumers are involved. A variety of such systems already exists in advanced societies across Western Europe, North America, and particularly in the Scandinavian countries. Where these systems are operated directly by the state, they often suffer from large deficits. In contrast, countries where the systems are managed by self-governing bodies elected by subscribers tend to incur fewer deficits and greater efficiency.                              

III. Conceptual Framework for a Universal Participatory Social Security System (UPSSS) for India  

Indian Government declared that it would bring social security for all by 2047.  It is fiscally feasible and administratively achievable. India requires imperatively a rights-based, contributory, and portable social security architecture that covers all citizens across professions, regions, and life stages. In order to do that, the Union Government shall enact a Right to Social Security Act, guaranteeing universal access to social security benefits to all and establishing an autonomous National Social Security Authority (NSSA). It should be managed by professionals, elected by subscribers and equipped with robust mechanisms of grievance redressal, audit, and transparency. The existing institutions, such as EPFO and ESIC, shall be merged into NSSA. The system shall be largely self-financed through contributions from individuals, employers, and other stakeholders. 

1. Public Health Commitment:  

A Trilateral Advisory and Regulatory Board composed of the National Medical Commission, Indian Medical Association and the Consumer Associations should be formed. During 2026, at least 5% of GDP should be allocated to health expenditure. India’s international aid agreements should include, as a priority, the supply of pharmaceutical products, vaccines, mobile hospitals in case of emergencies, medical treatment for patients and medical education for students. In this field, all appointments should be on the basis of merit. Medical tourism should be facilitated. Corporate Social Responsibility and philanthropy should be encouraged mainly for health and education.    

At present, healthcare and medical treatment costs incurred by society for an average person are higher than the economic output generated by that individual, even in the case of an elderly person. The state, instead of spending money inefficiently on a few government-run hospitals, should allocate funds to private hospitals and clinics based on their performance with regard to their outreach, affordability and research. At the macroeconomic level, pension funds and healthcare expenditure must interact to balance. Further, any structural and chronic deficit may be addressed through a dedicated cess on income tax or allocations from direct tax revenues of the states. Healthcare and medical treatment shall be Portable across all states and countries gradually.

2. Pensions:  Statutory retirement age should be 62 years, with an option to extend up to 64 years. Pension funds shall be professionally managed in financial markets to maximise long-term returns with preferred investments in healthcare infrastructure and medical institutions, pharmaceuticals and medical device manufacturing, loans for students and R&D. Membership contributions shall be non-refundable, non-returnable, and non-loanable. The schemes such as National Pension Scheme (NPS), Atal Pension Yojana (APY), Government pensions for civil servants and Company Pension Trusts shall have the same standards, under the regulatory oversight of the Pension Fund Regulatory and Development Authority(PFRDA).  

3. Since, the Union and state governments cannot be efficient service-providers, the GoI should disinvest itself from the four public-sector insurance companies. The Government should provide incentives for cooperation and networking among all medical practitioners, clinics, hospitals, nurses and healthcare workers, medical colleges, Old-age homes, etc. It will be mutually beneficial for insurers and residents if the urban neighbourhood communities, like the Resident Welfare Associations (RWAs), are treated as units for group insurance to generate lower premiums, reduced risk, and administrative efficiency.                             

The Insurance Regulatory and Development Authority should operate in close cooperation and regular consultations with the Consumer Associations and the General Insurance Council of India on equal footing. It should also ensure that there are fast grievance redressal, audit, and transparency mechanisms, in addition to the present ‘Ombudsman’ hearings.

4. Global Scale: Humanity has reached a stage of productive capacity, accumulated wealth and globality that it is feasible to care for all people across all continents through mutual solidarity among contributors. The challenge is no longer one of resources, but of organisation: of networking cooperative, inclusive systems at the largest scale. It is a good thing that the GoI has recently allowed 100% FDI in the insurance sector. 

The most essential quest of Gautama Buddha was to eliminate human suffering. Today, it is possible not only to reduce suffering but also to address its sources like deprivation, pain, anxiety, worry, and insecurity. Humanity has reached a stage of productive capacity, accumulated wealth and globality that it is feasible to care for all people across all continents through mutual solidarity among contributors. The challenge is no longer one of resources, but of global scale organisation: of networking cooperative, inclusive systems at the largest scale.

IV. Finance:

1. The amount of public money spent by the Union and state governments in the name of piecemeal welfare schemes would be more than sufficient to cover the initial deficits of the system.                   

2. If the Union government takes the human and social responsibility more seriously than their vain-glorious political responsibility towards their citizens, they can save sufficient funds by closing all embassies abroad and allowing all external relations to be handled directly by the concerned Ministries and through the UN Agencies.              

3. Another source of great savings is by radically reducing our current defence expenditure. It can be done only if the Indian diplomats are really willing to persuade our neighbouring countries with which we have border and water disputes pending for decades to agree on international mediation and arbitration. 

4. Instead of relying on bilateral aid and ad hoc voluntary contributions to UN agencies after man-made or natural disasters as in Sudan, Gaza and Ukraine, a global, solidarity-based system could provide timely, predictable, and dignified relief. Such a system would mark a historic milestone in humanism and human progress, transforming the emergency solutions from an expression of emotional compassion to a permanent, organised expression of shared human responsibility.   

Let us act now as a citizen initiative to start building such networks, by urging all service-providers and consumer communities, and institutions to adopt these principles of mutuality and participation. Secondly, urge policymakers to prioritise the integration of contributory systems that truly protect all.