People with Disabilities in India: From Commitment to Outcomes

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6.21. An important element in costing disability insurance is the rate of new claims. Data show that rates of disability claims in formal pension systems are higher in the richer OECD countries than in poor or middle income countries. 164 Disability inflow rates in European contributory pension schemes average more than six per thousand working age individuals, many multiples of the same rates found in Latin America. 165 6.22. Reported disability inflow rates in India’s EPFO/EPS scheme are shown in Figure 6.3 below, and compared to rates in seven Latin American countries. In India, there is a large disparity in disability inflow rates between the rates reported for workers in the unexempted funds (which make contributions directly to EPFO and EPS) and those in the exempt funds (which operate in large establishments and opt out of the EPFO). 166 Notably, the unexempted fund rates are the lowest in the table and nine times lower than those in the exempt funds. The reason for this low rate is not clear especially because the rate of actual disability is likely to be higher among the unexempted workers given that they have lower average wages than the exempted fund workers. Among the possible explanations is the fact that exempt funds can process claims “in-house” without having to approach the EPFO bureaucracy, and may therefore be more efficient in processing claims. The differentials – both in comparison to exempt funds and the other countries shown – raise questions on the efficiency of current social insurance processing systems. Figure 6.3: Disability inflow rates for contributory pension members in India and selected Latin American Countries, 2000-2002 Mexico Argentina Chile Peru India (exempt) El Salvador Uruguay Bolivia India (non-exempt) 0 0.2 0.4 0.6 0.8 1 1.2 new disabled per 1000 workers Source: Grushka and Demarco (2003); EPFO (various). Indian averages for 1996-2001. 6.23. (b) Disability insurance for the unorganized sector: The latent demand for disability insurance among those not covered by the EPFO and public sector schemes is evidenced by the growing number of self-help groups, welfare funds and micro-insurance offerings in this area. However, country wide membership in these group schemes is limited (certainly less than 5 per cent) and not all offer disability benefits. Those that do offer it almost universally pay out lump sum benefits and only in cases of permanent and serious injury. 164 Part of the result may be due to the fact that disability incidence rises with age and the average age of workers in richer countries is higher. Yet, it is also clear that working conditions tend to be safer in rich countries and health services are generally better. The counter-intuitive result suggests that in lower income countries either eligibility standards are stricter and/or individual workers find it less attractive to make a claim when incomes are at lower absolute levels. 165 See OECD (2003) and Grushka and Demarco (2003). 166 Exempt funds are employer-administered provident funds that have to match the contribution and benefit schedules (including rates of return) of the EPFO. They are restricted to large employers that have received permission to contract out of the EPFO as long as they match the benefits. They account for around one quarter of total membership, and tend to be higher income and bigger firms. -117-
6.24. Easily the largest scheme for unorganized sector workers is the Janashree Bima Yogana (JBY), which is a bundled life and total/partial permanent disability product provided by Life Insurance Company of India (LIC), and covered 3.6 mln households as of 2006. In addition to the survivor benefit in case of death, JBY provides for Rs. 50,000 to a household in case of permanent total disability and Rs. 25,000 in case of permanent partial disability. This is based on an annual premium of Rs. 200 per household, half of which comes from the insured person and half from a Social Security Fund of LIC itself which was financed by GoI on a corpus basis. The program is targeted to group membership (of 20 and more members) and covers a designated range of unorganized sector occupations. 167 The design of the scheme is interesting from a policy perspective in several ways. First, it is an attempt to incrementally increase coverage, in this case on the basis of occupations or groups considered to have generally lower incomes, but with some capacity to contribute. Second, there is a transparent subsidy intended to provide incentive for voluntary take up. 6.25. Welfare funds are most common in Southern India and in particular, Kerala where some estimates put coverage at more than one in five workers. In a recent review of Kerala welfare funds, Rajan (2002) found a wide variety of benefits including for very specific health conditions (e.g., artificial organs) to cash disability payments. Out of 24 welfare funds covered in the study, 18 offered some kind of disability benefit, but only 5 provided a monthly payment until death. 168 The rest paid one time lump sum benefits. An ILO review of welfare funds in several states also found similar patterns. 169 6.26. The prevalence of disability benefits in micro-insurance schemes appears to be even more limited. In its review of 51 surveyed micro-insurance schemes, the ILO found that only one quarter offered disability benefits (although others did offer accident and health benefits that may overlap to some extent). 170 The benefits were almost always in the form of lump sum payments. As an example, the Bharathi Integrated Rural Development Society (BIRDS), with about 9,000 contributors in 173 villages charges a premium for disability and life of 100 rupees per annum and pays a lump sum Rs. 25,000 in the case of permanent disability. 6.27. There is very little solid analysis available on how well these schemes function. Common challenges include relatively high administrative costs, limited risk pooling and lack of expertise in insurance. Moreover, given the general lack of regulation, there is bound to be wide dispersion in the quality and financial soundness of the different plans. Finally, even where the programs are functioning well, the public policy question is to what extent they can be scaled up. 6.28. Another source of disability coverage is the product offered by the New India Assurance Company (NIACL). These publicly-owned companies are obliged to offer services targeted at specific groups. Coverage is extremely low however. For example, only 47,000 individual policies were sold for a disability insurance product targeted towards women offered by NIACL between 1998-2004. This is clearly a negligible fraction of potential coverage. Some of the rural insurance schemes with accident benefits appear to have greater coverage. It is unclear whether any of these products are priced on a fair basis or are implicitly subsidized by the insurance companies and ultimately by the state. 167 See licindia.com/social_securities_001_benefits.htm 168 For example, Kerala’s headload and toddy workers that become permanently disabled receive 150 rupees per month until death while cashew nut workers receive a lump sum of 2500 rupees and a fisherman or a rickshaw worker are not covered for disability. 169 ILO (2004). 170 In her study of health insurance offered by a microfinance institution in India, Duflo (2004) finds that a large share of health shocks are likely to be due to events that would fall under the disability category. -118-
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PEOPLE WITH DISABILITIES IN INDIA:
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Abbreviations and Acronyms ADL ANM
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Table of Contents EXECUTIVE SUMMARY
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Figure 5.3: Employment rates of PWD
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Box 5.4: A Jobs Fair Bringing Emplo
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NGOs, both quantitative and qualita
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Out of school rates for CWD are hig
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needs to respond more proactively t
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government strategies for promoting
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Safety Net Schemes 33. Safety nets
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40. In early 2006, a National Polic
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should move to implement the Act’
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54. Addressing current and future p
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disability SHGs, which has been sho
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have comparative advantage is putti
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extent of individual functioning du
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converting income into well-being o
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21. In light of the challenges that
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not be explained by this. The major
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Table 1.2: Disability Prevalence ra
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The share of disability impact due
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• It is also important to recall
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1.17. A second issue with obvious i
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Figure 1.9: Employment rates of PWD
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Box 1.2: Census questions on disabi
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Box 2.1: Disability in Indian mytho
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• overall, there is low acceptanc
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Table 2.2: Positive perceptions of
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different areas, as for example the
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governmental sectors drive home the
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Box 2.4: Raising awareness and chan
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• onset of mental disabilities is
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3.9. Locomotor disability is the ca
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B. Prevention of Disability 3.15. A
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3.20. The NBCP, like other vertical
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almost three times more likely to h
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PWDs. The scheme operates in 11 cen
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Figure 3.4: Proportion of disabled
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Table 3.11: Type of Service Accesse
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Urban 1.46 North 1.40 South 1.10 Ea
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Box 3.1: WHO’s “Ten Question Pl
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3.51. (f) Financial barriers to acc
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including for road accidents, and e
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A. Indian and International Policy
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4.9. A specific feature of SSA is a
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• significant gender differential
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Out of school rates for CWD are hig
Page 95 and 96: Only around 5 percent of children w
Page 97 and 98: 4.30. (b) Financial performance of
Page 99 and 100: only factor contributing to both po
Page 101 and 102: The numbers of CWD identified by SS
Page 103 and 104: IE training options. The impacts of
Page 105 and 106: part of the authorities to increase
Page 107 and 108: well beyond the needs of CWD alone.
Page 109 and 110: performance in the schooling system
Page 111 and 112: DLROs has contributed to West Benga
Page 113 and 114: CHAPTER 5: EMPLOYMENT OF PERSONS WI
Page 115 and 116: atios, while others such as J&K, Bi
Page 117 and 118: Figure 5.8: Employment rates over t
Page 119 and 120: • the relative wages of PWD to no
Page 121 and 122: of age and disability status. Multi
Page 123 and 124: 5.23. For males in the survey, a de
Page 125 and 126: equirement of specific post identif
Page 127 and 128: 5.34. Nonetheless, there has been u
Page 129 and 130: consistent with survey findings. Na
Page 131 and 132: exchanges are in any event servicin
Page 133 and 134: Source: NHFDC website reporting cum
Page 135 and 136: Box 5.5: Good practice in NGO skill
Page 137 and 138: D. Conclusions and recommendations
Page 139 and 140: is set. In the case of SGSY, the gu
Page 141 and 142: Table 6.2: States/UTs with unemploy
Page 143 and 144: Table 6.4: Coverage of disability s
Page 145: Table 6.6: Contributions and benefi
Page 149 and 150: 6.35. While the design of the insur
Page 151 and 152: people. The transfer under NOAPS wa
Page 153 and 154: 7.4 (a) The Persons with Disabiliti
Page 155 and 156: 7.8 (ii) Sectoral policy issues in
Page 157 and 158: • in the area of education, the p
Page 159 and 160: awareness raising about disability
Page 161 and 162: more formal institutions in disabil
Page 163 and 164: 7.28 There is little detailed analy
Page 165 and 166: Table 7.2: Institutions providing b
Page 167 and 168: systematically related to the numbe
Page 169 and 170: • collaboration between NGOs and
Page 171 and 172: moving to improved outcomes for PWD
Page 173 and 174: CHAPTER 8: ACCESS FOR PEOPLE WITH D
Page 175 and 176: Box 8.1: International and regional
Page 177 and 178: The comparison of institutional arr
Page 179 and 180: laudable, there are concerns that m
Page 181 and 182: ANNEX 1: COMPARING THE INCOMPARABLE
Page 183 and 184: of prevalence estimates across the
Page 185 and 186: person will be treated as having
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