India to set up welfare fund for workers abroad

June 1st, 2008 - 11:32 am ICT by admin  

By Devirupa Mitra
New Delhi, June 1 (IANS) India is readying to unveil a welfare fund to aid its large body of workers abroad in emergencies and when they get into financial trouble. The Ministry of Overseas Indian Affairs is holding consultations to evolve a new formula that will lead to an Overseas Workers Welfare Fund.

“We are looking at different options on how to structure the welfare fund,” K. Mohandas, secretary in the ministry, told IANS.

One idea is to charge from Indian workers higher fee when they seek the No Objection stamp on their Emigration Clearance Required (ECR) passports.

If that happens, the workers will pay Rs.1,000 to get an ECR stamp, up from the present Rs.200.

“This money, along with other contributions, will build up a workers fund to provide payment for various claims,” Mohandas said.

According to another official, the mantra to find the right prescription is “sustainability”.

Officials have suggested there will be a built-up fund of Rs.2-2.5 million in the next three years. The collection should not pose a problem as the Protector General of Emigrants has been steadily sending more and more workers abroad - 677,000 in 2006 and 809,000 in 2007.

Currently, Indians require emigration clearance for 17 countries. Of this, 12 are in the Middle East: the United Arab Emirates, Saudi Arabia, Qatar, Oman, Kuwait, Bahrain, Libya, Jordan, Yemen, Sudan, Syria and Lebanon.

The Indians in the Gulf region account for over half the $27 billion remittances sent back to India.

“We will first cover workers only in ECR countries but it could also later cover workers in ECNR (Emigration Clearance Not Required) countries too,” said a ministry official.

There will however be limits on payment to workers: Rs.60,000 for medical claim, Rs.25,000 for legal aid and Rs.1 million in case of death.

“The main issue is that the fund should be self-sustainable. If for some reason there is a rush to make claims, we should be able to deal with it,” he said.

Last year the ministry had prepared a cabinet note on a model asking for an allocation of Rs.1.5 million for the corpus. It had suggested only a modest contribution of Rs.100 per worker seeking an ECR stamp.

The idea of a welfare fund was mooted in 2001 by the labour ministry - three years before the Congress-led United Progressive Alliance government formed the overseas Indian affairs ministry.

The labour ministry started an insurance scheme for overseas workers, the Pravasi Bharatiya Bima Yojana, in 2003.

An insurance policy was made mandatory for anybody trying to obtain a clearance on ECR passports.

Three years later, a new Bima Yojana provided more liberal terms with a minimum sum of Rs.500,000 payable in the event of death or permanent disability. But the Bima Yojana has barely attracted any claims.

The premium was reduced this April. “We are planning to review the entire insurance policy scheme as nobody seems to be using it,” said an official.

If the new welfare fund model is accepted, then the insurance scheme will be eventually withdrawn, he added.

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