The Role Played By Social Security In India’s Low-Carbon Journey

India’s transition to a sustainable future is expected to generate employment in renewable energy, electric mobility and green manufacturing. However, it could also lead to uncertainties for workers in carbon-intensive industries like fossil-based power, conventional automotive, emission-heavy manufacturing, mining and brick kilns.

Informal laborers, older workers, women and other disadvantaged groups are particularly exposed to the risks of the transition. These populations often face systemic barriers in accessing skills training or financial resources and geographical challenges in pursuing emerging green jobs. Robust social protection systems are critical to protect them during the transition.

While the moral imperative for social security is evident, its economic rationale is equally compelling. Well-designed social protection systems are not merely redistributive. They are productive investments. Studies have shown that social security stabilizes aggregate demand during economic downturns, improves human capital through better health and education outcomes, enhances labor mobility and entrepreneurship, and boosts productivity by reducing stress and absenteeism.

A just transition anchored in a strong social security framework can ensure income stability, healthcare access, skill development and social protection for workers — empowering them to contribute meaningfully to India’s sustainable growth story.

Income Support and Unemployment Benefits

Workers displaced by the green transition will require financial support in the form of temporary unemployment benefits, severance packages and wage subsidies to prevent them from falling into poverty. In Jharkhand’s Ramgarh — a heavily coal-dependent district — the absence of alternative employment opportunities has already led to economic distress. This highlights the urgent need for structured income support systems.

Some international examples can be useful in building these systems. Germany’s Coal Commission has designed a structured coal phase-out strategy that incorporates strong worker protections, including compensation, retraining programs and comprehensive social security. Similarly, South Africa’s Presidential Climate Commission has prioritized financial support for workers in declining industries to shield them from abrupt economic hardship.

Dignified retirement provisions with secure compensation are also vital — particularly for older workers — to ensure that the livelihoods and dignity of workers are preserved through the transition.

Access to Universal Healthcare and Social Services

While immediate income support is crucial, embedding just transition principles into long-term community development requires a comprehensive social services framework. This must include pension reform, provident fund access and universal services — healthcare, education, housing, water and sanitation — tailored to address the unique challenges faced by vulnerable populations.

Spain’s just transition strategy includes guaranteed healthcare and other health-related benefits for workers and their families as their jobs are phased out, ensuring continuous social protection. In India, strengthening and expanding schemes like Ayushman Bharat to cover displaced workers can protect households from health-related financial shocks.

Skill Development and Reskilling Programs

A just transition must not only mitigate job losses but also unlock new employment opportunities. Large-scale, sector-specific and locally adapted skill development programs are essential to help workers transition into green jobs. The existing Skill India initiative could be expanded to target those affected by the decline of high-emission industries.

Training programs under the Suryamitra Programme are already being implemented to teach workers skills like solar panel installation and maintenance, demonstrating the potential of reskilling to bridge employment gaps. Similarly, the United States Trade Adjustment Assistance (TAA) program has supported workers impacted by industrial shifts through retraining, wage subsidies and job placement services.

A similar initiative in India could help prepare workers for the green economy and ensure a smoother transition.

A Social Security System for India’s Just Transition

An effective social security system for a just transition needs a strong and adaptable framework. The following could be its key components:

• Ensuring Comprehensive and Inclusive Coverage
  A robust system should address the full spectrum of worker needs, including income support, healthcare, pension, childcare and skilling. Special attention should be paid to include informal and marginalized workers.
• Allowing Flexibility and Portability
  Benefits must be adaptable to varying regional and sectoral conditions. Portability is crucial for migrant and informal workers who frequently change locations or jobs.
• Establishing a Just Transition Fund
  A dedicated fund could be considered to finance reskilling, relocation and direct support for affected workers. Potential sources could include carbon revenues, corporate social responsibility (CSR) contributions, green bonds and international climate finance.
• Integrating Digital Platforms and Ensuring Accessibility
  Leveraging digital platforms can streamline access, reduce delays and ensure transparency in benefit delivery. Integration with digital payments and mobile banking can increase reach and minimize leakages.
• Ensuring Efficient and Transparent Delivery
  Administrative procedures must be simplified, with real-time monitoring and social audits to improve efficiency and build trust. Dynamic labor registries and geospatial data should be used to improve targeting.
• Leveraging Existing Schemes
  Existing government programs—such as Direct Benefit Transfers, PM-KISAN, Pradhan Mantri Garib Kalyan Yojana (PMGKY), National Social Assistance Programme (NSAP), and Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) —should be scaled and aligned with just transition objectives. This involves broadening eligibility, bundling complementary services (e.g., healthcare, training, transport subsidies) and simplifying administrative procedures.
• Leveraging Public-Private Partnerships
  Collaboration with industry is vital. Companies must support green job creation through investment in local infrastructure, retraining initiatives and economic diversification. They should also co-fund severance and skilling efforts. Green sectors, as the primary beneficiaries of the transition, must uphold fair labor standards and prioritize skilling and local employment.
• Enabling Community Participation
  Policy formulation must involve meaningful engagement with workers and local communities. Public consultations can ensure context-sensitive solutions and foster shared ownership.
• Strengthening Multi-Tiered Governance
  At the national   level, the government should provide overarching policy direction and financing, while state governments must adapt and implement programs. As district administrations play a key role in last-mile delivery, panchayats and local bodies can lead community engagement and accountability.

India’s journey toward a sustainable future can enhance equity and economic opportunity for all. Social security is not only a moral obligation but can be a powerful policy lever to ensure collective prosperity and development. By prioritizing income support, healthcare access, skill development and financial protection, India can pioneer a just, inclusive and resilient low-carbon development pathway.

(Published under Creative Commons from World Resources India. Read the original article here)