The Indian government has announced an ambitious plan to provide social security coverage to millions of poor workers for the first time. As Anjana Pasricha reports from New Delhi, the plan is part of the government's efforts to fight widespread poverty.

Indian construction workers work on a building site in New Delhi (File)

The government has proposed to change that with new legislation to be introduced in parliament in July.

Parliamentary Affairs Minister Priya Ranjan Das Munshi says workers who contribute about two cents a day will be eligible for benefits such as health insurance and disability protection under the plan.

The federal government says those earning less than $160 a year will not have to pay for the program.

The government has called its plan a "revolutionary step."

The social security proposal was announced as the government faced criticism for doing too little for poor people despite a rapidly growing economy.

Independent political analyst and columnist Prem Shankar Jha in New Delhi says social insecurity is at the root of growing disillusionment with the government.

"What you require was … social insurance, old age pensions, health insurance," said Jha. "There is an abundance of data [to show] that poor families in this country, whenever a member falls ill, they go into debt … the average level of debt in the poorest ten per cent of the population on health alone is more than one years earning."

Currently, less than 10 percent of India's workforce has access to social security benefits.

The Labor Ministry says it has already committed $250 million for the new plan. But critics say it could cost billions of dollars, and say it is not clear how the government will fund the ambitious project.

Last year, the government launched another effort to tackle rural poverty by promising 100 days of work each year for one member from each of India's 60 million rural households. But so far that project covers less than half the country.

India's Congress Party-led government increased its focus on programs to benefit the poor after the party lost ground in a series of local elections. The government came to power three years ago promising to do more for the common man.