Developing social safety net programmes for retrenched workers in India

Project:
Social Safety Net Programmes
Developing fair and supportive retrenchment programmes as many areas of India's garment sector underwent privatisation

The provision of a fair social safety net programme for workers, especially lower level workers, is a critical component of any good privatisation or restructuring programme.

Our teams have worked with governments across the world to develop such programmes for retrenched workers. Our work in India, thanks to its particular innovations and high success rate, has received special praise from governments, the World Bank, the Asian Development Bank and the Department for International Development.

In India, we have conducted projects in the following areas:

Andhra Pradesh
In Andhra Pradesh between 1999 and 2004, we provided technical assistance to offer retraining and a job loss compensation package to over 25,000 workers being retrenched as part of an enterprise reform programme. The project, funded by the World Bank and DFID, was the largest of its kind in South Asia.

We established a Social Support Programme in Hyderabad, Andhra Pradesh’s capital, as well as in a number of regional offices, and employed 12 full time counsellors to work with employees to assist them with financial planning, job search activities and to identify their training needs. During the design phase we undertook a review of all training and further education institutions within the state and developed an innovative programme which included performance based contracting and vouchers. The team worked with over 30 different institutions and companies who were providing retraining to workers in a broad range of different skill and vocational areas.

In addition to retraining and counselling, our team administered the payments from job loss compensation packages which were being offered by the government and part-funded by the World Bank. The implementation model that we developed in the state has since been adopted by several other states across India.

Madhya Pradesh
We were contracted by the Asian Development Bank in 2000 and by DFID in 2002, to design and implement a social safety net programme based on one-off voluntary retirement compensation, vocational training and education for former state enterprise employees.

We undertook a review of all training and further education institutions within the state and designed a programme which involved performance based contracting and vouchers for workers to ensure that the programme met employees’ needs and aspirations, and offered them the sort of personal choice lacking in many similar schemes in India and elsewhere in South Asia.

During the implementation phase, we paid retrenchment compensation to over 25,000 workers over 2 years. The whole enterprise closure and retrenchment programme was implemented seamlessly, and received praise both from the Asian Development Bank and the Chief Minister of Madhya Pradesh.

Orissa
We implemented DFID’s SSNP in Orissa between 1999 and 2004. The project involved provision of vocational training and counselling for over 30,000 workers who were being retrenched as part of the enterprise reform programme and the disbursement and monitoring of US $15m of redundancy payments to workers.

Our team helped the Department of Public Enterprises to develop and implement social safety-net schemes similar to the ones we implemented in Andhra Pradesh, designed a labour market survey and helped the Government of Orissa to establish a redeployment agency.

India-wide
Working with a well-known Delhi-based NGO, with funding from the World Bank, we undertook a detailed survey of current vocational training practices and providers in India, resulting in preparation of a two-part report. The first part provided a review of existing practices across India, while the second focussed on the provision of advice on how such approaches and practices might be improved with reference to emerging international best practice.

The report considered the benefits, problems and associated practicalities of a range of personal choice initiatives, such as the use of vouchers.