The welfare fund model of social security for informal sector workers : the Kerala experience

Abstract

This paper examines the evolution of the institution of ‘Welfare Funds’ for informal sector workers in the State of Kerala in India. The Kerala experience, which is now thirty years old, reflects what the workers in the informal sector could achieve in countries like India given the contemporary political context and the democratic political framework of the State. But it required sustained collective action on the part of the workers. The paper finds that while the Welfare Fund Model of collective care arrangements for the informal sector workers in Kerala showed considerable innovation in its design and organisation, its functioning is embedded in the bureaucratic system giving rise to a number of problems. Even then the Model offers a minimum of social security to the informal sector workers who are unprotected. Therefore the question of replicating this Model with suitable modifications to other States in India as well as to other countries, where there are no social security arrangements for informal sector workers, is worth pursuing. JEL Classification : I 30, I 38, J 50 Key words : collective care, informal sector workers, Kerala, social security, welfare funds.