The ministry of labour and employment plans to implement social security programmes only for the poorest of the poor in the unorganised sector, to begin with.

The ministry's pilot projects for extending health insurance and pension benefits to workers in the unorganised sector are awaiting GoM approval, after which these may be made operational by April 2008. At present, a Bill on social security of unorganised workers is awaiting Parliament's nod.

Recently, the Arjun Sengupta Committee gave a report on the unorganised sector.

The project on health insurance would be implemented only in five districts in each state and one district in each union territory, totalling 152 districts (one-fourth of all the districts in the country), while the pension scheme would be made operational sector-wise, to begin with. The schemes would cost the government less than Rs 1,000 crore, officials said.

"It will be difficult to cater to the entire country in one go. We will launch it in select districts and sectors to evolve workable models," an official in the ministry told Business Standard.

The health insurance scheme will cover only people in the below-poverty-line category. While the Centre will pay 75 per cent of the premium, subject to an annual cap of Rs 450 per family, the rest will be paid by states. Each beneficiary will pay Rs 30 per annum as registration/renewal fees.

The Centre's contribution in the pilot, covering 1.52 crore families, will be Rs 648 crore a year. The scheme will entitle each family to in-patient health care insurance benefits in states, free consultation, reimbursement of hospitalisation expenses and transportation costs, and compensation for the loss of wages during the period of hospitalisation. Existing diseases will also be covered.

A ministry official said the administrative costs would be borne by state governments, which would also formulate the scheme and select the insurance provider.

"If the GoM approves the pilot, the health insurance scheme will be operational by April 2008," said the official.

The pilot pension scheme will cover unorganised workers from eight sectors (limestone and dolomite, mining, beedi workers registered with Labour Welfare Organisation of the ministry, coolies registered with the railways, autorickshaw-drivers, cycle-rickshaw pullers, and street vendors in state capitals) in the age group of 18-52 years.

The scheme will ensure pension/PF benefits to workers after they turn 58. It entails a monthly contribution of Rs 100 per month, out of which Rs 75 will be paid by the worker and Rs 25 by the Centre. The worker will be able to opt for a monthly pension instead of the lumpsum amount.

In case all eligible workers joined the scheme, the annual liability of the Centre would be around Rs 718 crore, a source said. "However, we expect the coverage to be around 50 per cent or even less in the initial years. The outgo in such a case will be around Rs 359 crore," an official said.