MPSC 2026 Prelims Paper-I · Question 42 of 100

Correct — option (3), "(a) and (c)": social insurance and social assistance. The standard classification in labour economics, and the one the International Labour Organisation uses, splits social security by how the benefit is financed and on what basis it is claimed. Social insurance is contributory. Money is paid in — by the worker, by the employer, often with a share from the State — into a fund, and the benefit is drawn out later as a matter of right, its size linked to the contribution record rather than to proof of poverty. India's classic instruments are of this type: the Employees' Provident Fund, the Employees' State Insurance scheme, employer-funded gratuity, and the contributory pension arrangements. Nobody asks an ESI beneficiary to prove he is poor; he is covered because contributions were made on his wages. Social assistance is non-contributory. It is paid out of the general revenues of the State, the beneficiary has contributed nothing towards it, and eligibility turns on demonstrated need — usually a means test, a category such as widow or person with disability, or a BPL classification. The National Social Assistance Programme is the textbook Indian example, with its old-age, widow and disability pensions and the National Family Benefit Scheme. So the two categories are distinguished by contribution and by entitlement: a right you have bought into, against a transfer the State makes because you need it. That is exactly the pair printed at (a) and (c), which is option (3). The other two words on the page are not wrong ideas — they are simply the wrong level of abstraction. "Social welfare" is the wider field within which social security sits, covering services, subsidies and welfare programmes generally. "Social inclusion" is an objective that social security may serve, not a way of financing or classifying it. The stem's phrase "best represents" is the examiner signalling precisely this: the answer is the recognised two-way classification, not any pair of plausible-sounding welfare words.

• (1)(a) and (b) — Option (1) pairs social insurance with social welfare. The first half is right and the second is a category error. Social welfare is the umbrella — the whole field of state action for well-being, taking in nutrition, education, housing and welfare services alongside income security. Naming it as one of the two branches of social security is like naming 'medicine' as one of the two branches of surgery: it does not sit alongside social insurance, it contains it.
• (2)(b) and (c) — Option (2) pairs social welfare with social assistance and drops social insurance altogether. That loses the entire contributory half of the system — provident fund, ESI, gratuity, contributory pensions — which is the larger arm by expenditure and by number of covered workers in the organised sector. A classification of social security that has no room for the Employees' Provident Fund has plainly gone wrong.
• (4)(c) and (d) — Option (4) pairs social assistance with social inclusion. Social inclusion is a goal — the outcome of bringing marginalised groups into the economic and social mainstream — and it is served by education policy, reservation, financial inclusion and much else besides social security. It is not a funding mechanism and not a benefit type, so it cannot be one of the two categories into which social security measures are divided. Again the contributory arm has also gone missing.

Social security is the set of measures that protect people against a loss or interruption of earning capacity — sickness, injury, maternity, old age, invalidity, unemployment, or the death of a breadwinner. Its two arms differ on a single question: did the beneficiary pay in? Social insurance is contributory and rights-based; the worker, usually with the employer and sometimes the State, builds a fund, and benefit follows from the contribution record without any test of poverty. Social assistance is non-contributory and needs-based; it is financed from general taxation and is directed at those who could never have contributed — the aged poor, widows, persons with disability, families that have lost a breadwinner. A third arrangement, universal or demogrant schemes paid to everyone in a category regardless of means or contributions, is usually treated as a variant of assistance. The distinction matters for policy, because insurance naturally covers the organised workforce with recorded wages while assistance is the only route to the unorganised sector, which in India is the overwhelming majority of workers.

The framework behind this question is the ILO's, and India's statutory architecture follows it closely. On the insurance side sit the Employees' State Insurance Act, 1948 and the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, with the Maternity Benefit Act, 1961, the Employees' Compensation Act, 1923 and the Payment of Gratuity Act, 1972 alongside them as employer-liability measures. On the assistance side sits the National Social Assistance Programme, a Centrally Sponsored Scheme launched in 1995 and delivered through the States, together with State-funded pensions such as Maharashtra's own Sanjay Gandhi Niradhar Anudan Yojana and Shravanbal Seva Rajya Nivrutti Vetan Yojana. The Code on Social Security, 2020 — one of the four labour codes — consolidates the principal central social security statutes into a single instrument and, importantly for this classification, creates a framework for extending cover to unorganised, gig and platform workers, the very group that contributory insurance has always struggled to reach.

• Social insurance is contributory and rights-based: benefit flows from a contribution record, not from proof of need. Employees' State Insurance (ESI Act, 1948) and the Employees' Provident Fund (EPF & MP Act, 1952) are the standard Indian instances.
• Social assistance is non-contributory and need-based: it is financed from general revenue and is targeted by means test or by category. The National Social Assistance Programme, launched on 15 August 1995, is the standard Indian instance.
• NSAP's components are the Indira Gandhi National Old Age Pension Scheme, the Indira Gandhi National Widow Pension Scheme, the Indira Gandhi National Disability Pension Scheme, the National Family Benefit Scheme and the Annapurna scheme — all of them assistance, none of them insurance.
• The ILO's Social Security (Minimum Standards) Convention, 1952 (No. 102) sets out nine branches of social security: medical care, sickness, unemployment, old age, employment injury, family, maternity, invalidity and survivors' benefit. It is the reference point for the classification tested here.
• The Code on Social Security, 2020 amalgamates the principal central social security laws into one statute and provides for extending cover to unorganised, gig and platform workers — the segment that contributory insurance has historically left out.

• Reading 'social welfare' as a synonym for 'social security'. Welfare is the wider field; security is the income-protection part of it. Options are built on exactly this conflation.
• Forgetting that contribution, not poverty, is what defines social insurance. An ESI beneficiary is never means-tested; an old-age pensioner under NSAP almost always is.
• Assuming every government benefit scheme is social security. Subsidised foodgrain, free schooling and scholarship programmes are welfare measures but are not classified as social security branches under the ILO scheme.
• Choosing a pair simply because both words appear in policy documents. The stem's 'best represents' asks for the recognised two-way classification, not for the two most familiar phrases.

MPSC asks social security in three recurring shapes. The first is definitional, as here — the two-way insurance/assistance split, or which of a list of named schemes belongs to which arm. The second is statutory recall: which Act governs ESI, which year the EPF Act was passed, which laws the Code on Social Security 2020 replaced. The third is scheme-level, and it usually has a Maharashtra angle — the components of NSAP or the State's own pension schemes and their eligibility limits. Preparing the classification first pays off, because it turns the scheme-level questions into sorting exercises: once you know that assistance is non-contributory and means-tested, you can place a scheme you have only half-remembered.

No directly related past PYQ was found.

• practice — not a real PYQ

  Which of the following is a social assistance measure rather than a social insurance measure ?

  • (a)Employees' State Insurance Scheme
  • (b)Employees' Provident Fund
  • (c)Indira Gandhi National Old Age Pension Scheme
  • (d)Payment of Gratuity

  Answer(c) Indira Gandhi National Old Age Pension Scheme. It is non-contributory, financed from general revenue under the National Social Assistance Programme, and granted on a means or category test. ESI and the Employees' Provident Fund are contributory insurance built on worker and employer contributions, and gratuity is an employer-liability payment tied to length of service — none of the three depends on proving need.

• practice — not a real PYQ

  The Social Security (Minimum Standards) Convention setting out nine branches of social security was adopted in 1952 by which organisation ?

  • (a)World Health Organisation
  • (b)International Labour Organisation
  • (c)United Nations Development Programme
  • (d)World Bank

  Answer(b) International Labour Organisation. Convention No. 102 of 1952 is the ILO's minimum-standards instrument and lists nine branches — medical care, sickness, unemployment, old age, employment injury, family, maternity, invalidity and survivors' benefit. It is the reference framework behind almost every textbook classification of social security, including the insurance/assistance division tested in this question.