The E Shram Portal: An Explainer

tl;dr

On 26th August, 2021, the Labour Minister Bhupender Yadav launched the E-Shram portal. The portal will help unorganised workers register for the National Database of Unorganised Workers, which will help them receive social security benefits. We decided to create this explainer to help you understand what the portal is and what are the various issues facing the portal.

What is the E-Shram portal?

The E-Shram portal is a registration portal for the government’s National Database of Unorganized Workers where unorganised workers can sign up to avail key social security services that may be extended to the unorganised sector. Notified under the Social Security Code, 2020, the categories of unorganised workers eligible for registration include:

1. Construction workers
2. Migrant workers
3. Street vendors
4. Domestic workers
5. Milkmen
6. Truck drivers
7. Fisherman
8. Agricultural workers
9. Other similar workers

Each worker registered on the portal will be provided with a unique 12-digit Universal Account Number (UAN). The government says that around 38 crore workers are expected to be registered on the portal. The initial benefits of registration include insurance coverage of Rs. 1 lakh in case of partial disability and Rs. 2 lakh in case of permanent disability or death. As of 30th August, more than 9.2 lakh workers have been registered on the portal.

What are the proposed benefits of the E-Shram portal?

Hitherto, unorganised sector workers were effectively excluded from the purview of labour laws. Through this portal, after registering unorganised workers, the government says that it will be able to provide social security benefits such as insurance coverage, maternity benefits, pensions, educational benefits, provident fund benefits, housing schemes etc.

The UAN number will be valid across the country and will help to provide workers, especially migrant workers, with social security benefits regardless of their location. The database will also help to create a central portal through which all social security benefits can be accessed.

What are people saying about the portal?

Workers organisation and trade unions have welcomed the portal, saying this was a welcome step especially in light of the heartbreaking exodus of migrant workers that was seen during last year’s lockdown. Others have said that the implementation of the portal will provide unorganised workers with much needed social security benefits.

However, the same organisations have also pointed out some pressing concerns about the registration process. The Centre of Indian Trade Unions has said that arrangements for off-line registration are needed, given that all workers may not be able to access the online portal. The Working People’s Charter said that imposing the condition of Aadhaar would exclude workers without Aadhaar cards from the process. Other organisations have stated how many workers have to change mobile numbers frequently, and so they may not always be able to access the Aadhaar-linked mobile. The lack of clarity about the entitlements to be received through the portal has also been criticised.

What are the issues with the portal?

India still witnesses a significant digital divide, as can be seen from the latest data from the Telecom Regulatory Authority of India: as of 30th June, 2021, overall teledensity is 88.07%, while rural teledensity is even lower 60.10%. This is compounded by the low levels of digital literacy: a 2017-18 NSO survey found that only 18.4% of persons aged 15 and above were able to operate a computer, while only 22.9% were able to use the internet. Unfortunately, existing schemes for digital literacy have witnessed slow progress. For example, under the Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA), as of March 2021, only around 4.54 crore candidates were enrolled for digital literacy training and 2.71 crore candidates were certified.

Now, unorganised workers constitute around 93% of India’s labour force, and most of whom earn low wages and work in subpar working conditions. Thus, even those who may have a smartphone through which they can access the portal might not be digitally literate enough to adequately navigate and understand how the portal works. In such a scenario, providing an online-only registration process would mean that many unorganised workers would not be able to register on the portal.

Such issues are exacerbated by the information required by the registration process. The portal states that the following information is required for registration:

• Aadhaar number
• Aadhaar linked active phone number
• Bank account details

As has been mentioned by several workers organisations, workers often have to change their phone numbers, and so may not always have access to their Aadhaar linked number. Allowing workers the flexibility to use different numbers would increase the portal’s registration intake.

Mandating the linkage of Aadhaar for social security benefits may present an additional hurdle to accessing benefits. The Aadhaar verification system has been plagued by technology failures that have led to serious issues of exclusion for welfare benefits. Ajay Bhushan Pandey, ex-CEO of UIDAI, noted in his presentation during the hearing of Puttaswamy Case that in 2018, the authentication failure for government services was as high as 12%. Central government data also acknowledged that as of March 3rd, 2020 only 60% of the total allocated grains per month are distributed on the basis of biometric verification of Aadhaar.

The efficacy of Aadhaar based registration for schemes has also been studied in various contexts. One study in Jharkhand found that Aadhaar based authentication “either did not reduce errors of inclusion or leakage or did so at the cost of increased exclusion error”. Another study for Aadhaar based verification in PDS shops found that the system is “rife with technical issues such as incomplete seeding of cardholder information, biometric failure and administrative gaps such as inadequate failure reporting and back-up systems”.

A study sampling Aadhaar based authentication in diverse settings such as PDS distribution, NREGA work, LPG subsidies, midday meals, and the National Social Assistance Programme found that

"(a)vailable evidence does not substantiate any significant gains from Aadhaar-integration in welfare programmes. On the contrary, it has inflicted considerable pain. Apart from (supposedly) one-time costs of enrolment and Aadhaar-seeding, people are now faced with higher transaction costs on a monthly basis (in pensions and the PDS for instance), and in a significant minority of cases, also face exclusion and denial. Even when it works, people suffer from considerable indignities”.

Making Aadhaar mandatory for registration may also be unconstitutional. In its judgement in Justice K. S. Puttaswamy (Retd.) and Anr. vs Union Of India And Ors (2017) 10 SCC 1, the Supreme Court, while upholding the constitutionality of Aadhaar, noted that Aadhaar can constitutionally be linked only for benefits funded by the Consolidated Fund of India. Given that certain social security benefits such as insurance, provident fund contributions and gratuity would accrue at the cost of the employer, mandating Aadhaar for the receipt of the same may contravene the judgement.

The implications of this judgement have already been recognised by government bodies: the Employees' Provident Fund Organisation has even passed an order removing penalties for employees who had not completed Aadhar based registration. The Parliamentary Standing Committee on Labour has also flagged this in its report on the Code on Social Security, 2019 where it notes the budgetary outlay from the consolidated fund of India is not clearly earmarked. The Committee asked the Ministry to reconsider mandatory Aadhaar linkage in light of the Supreme Court judgement, pointing out that Aadhaar may be mandated only for benefits provided from the Consolidated Fund of India.

Our suggestions

In light of these issues, we have the following recommendations:

1. Allow multiple forms of ID: The mandatory usage of Aadhaar for registration is unconstitutional and exclusionary, and must be removed. Other government provided ID cards should be allowed for authenticating a worker’s identity.
2. Allow the latest numbers to be used: Workers should be allowed to use any number of their choice for registration. The portal must also allow the registered number to be modified by the workers.
3. Allow offline registration: The government must create a way to register in the database offline. To this extent, common service centres can be leveraged to hold ‘registration camps’ for those who wish to register offline. Workers who are registered on pre-existing databases must automatically have their data supported into the new database.
4. Increase ease of registration: Both central and state governments must organise local events and door-to-door campaigns to help workers register on the database. A helpline should be created to deal with complaints about the portal.

Important documents

1. Previous blogpost titled ‘Comments on the Draft Social Security Rules to safeguard worker's rights #SaveOurPrivacy’ dated 8th December, 2020 (link)
2. Previous blogpost titled ‘#PrivacyofThePeople - ASHA Workers and Employee Surveillance’ dated 23rd June, 2021 (link)