SET:LL:Code on Social Security 2020 [announced on
22.11.2025]:notes prepared on 27112025
Topic : Code on Social Security (for G S
Papers) {Prepared on 27.11.2025 }
For Study purpose only
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TOPIC : Code on Social Security : for UPSC(CSE)(Prelims) Exams. 2026
THE CODE ON SOCIAL SECURITY, 2020 NO. 36 OF 2020 [28th September, 2020.] QUESTIONS & ANSWERS
Question: What is ‘social security’ under Code on Social Security,2020?
Ans : "Social security" means the measures of protection afforded to employees, unorganised workers, gig workers and platform workers to ensure access to health care and to provide income security, particularly in cases of old age, unemployment, sickness, invalidity, work injury, maternity or loss of a breadwinner by means of rights conferred on them and schemes framed, under Code of Social Security,2020;
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Question: Which of the following Acts are repealed for Code on Social Security,2020?
Ans :
1. The Employee's Compensation Act, 1923;
2. The Employees' State Insurance Act, 1948;
3. The Employees' Provident Funds and Miscellaneous Provisions Act, 1952; 4. The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959; 5. The Maternity Benefit Act, 1961;
6. The Payment of Gratuity Act, 1972;
7. The Cine-Workers Welfare Fund Act, 1981;
8. The Building and Other Construction Workers' Welfare Cess Act, 1996;
9. The Unorganised Workers' Social Security Act, 2008.
Ans : All the above
Question: How much Gratuity to Fixed-Term Employees is given under Code on Social Security, 2020 ?
Ans: Under Section 53 of the code, the Government has reduced the eligibility requirement for gratuity for Fixed Term Employees (FTEs) from five years to one year. In cases where the employee completes one year of continuous service, gratuity shall be applicable on proportionate basis.
Question: Whether Gig and Platform Workers are included in the Code on Social Security, 2020 ?
Ans : Yes. For the first time in India, social security benefits have been extended to unorganised, gig and platform workers under Sections 113 &
114 of the Code on Social Security, 2020. The code also addressed the gap and includes the definition of aggregator (digital intermediary). This shall benefit such workers directly.
Question: Who is ‘aggregator’ ?
Ans: "Aggregator" means a digital intermediary or a market place for a buyer or user of a service to connect with the seller or the service provider
Question: Who is an ‘employee’ under Code on Social Security,2020?
Ans : "Employee" means any person (other than an apprentice engaged under the Apprentices Act, 1961) employed on wages by an establishment, either directly or through a contractor, to do any skilled, semi-skilled or unskilled, manual, operational, supervisory managerial, administrative, technical, clerical or any other work, whether the terms of employment be express or implied, and also includes a person declared to be an employee by the appropriate Government, but does not include any member of the Armed Forces of the Union Government
Question: What is a factory under Code on Social Security ,2020 ?
Ans : "Factory" means any premises including the precincts thereof—
(a) whereon ten or more employees are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or
(b) whereon twenty or more employees are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on, but does not include a mine, or a mobile unit belonging to the Armed Forces of the Union, railways running shed or a hotel, restaurant or eating place.
Question: What is ‘fixed-term employment under Code of Social Security,2020?
Ans : "Fixed term employment" means the engagement of an employee on the basis of a written contract of employment for a fixed period: Provided that—
(a) his hours of work, wages, allowances and other benefits shall not be
less than that of a permanent employee doing the same work or work of a similar nature; and
(b) he shall be eligible for all benefits, under any law for the time being in force, available to a permanent employee proportionately according to the period of service rendered by him even if his period of employment does not extend to the required qualifying period of employment
Question: Who is a ‘gig worker’ as per Code on Social Security,2020?
Ans : "Gig worker" means a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship
Question: Who is an ‘inter-state migrant’?
Ans : "Inter-State migrant worker" means a person who is employed in an establishment and who—
(i) has been recruited directly by the employer or indirectly through contractor in one State for employment in such establishment situated in another State; or
(ii) has come on his own from one State and obtained employment in an establishment of another State (hereinafter called destination State) or has subsequently changed the establishment within the destination State,
under an agreement or other arrangement for such employment and drawing wages not exceeding eighteen thousand rupees per month or such higher amount as may be notified by the Central Government from time to time
Question: What is permanent total disablement under Code on Social Security,2020 ?
Ans : "Permanent total disablement" means such disablement of a permanent nature as incapacitates an employee for all work which he was capable of performing at the time of the accident resulting in such disablement:
Provided that permanent total disablement shall be deemed to result from every injury specified in Part I of the Fourth Schedule or from any combination of injuries specified in Part II thereof where the aggregate percentage of the loss of earning capacity, as specified in the said Part II against those injuries, amounts to one hundred per cent.;
Question: What is permanent partial disablement under Code on Social Security,2020?
Ans: "Permanent partial disablement" means, where the disablement is of a permanent nature, such disablement as reduces the earning capacity of an employee in every employment which he was capable of undertaking at the time of the accident resulting in the disablement: Provided that every injury specified in Part II of the Fourth Schedule shall be deemed to result in permanent partial disablement;
Question: What is ‘platform work’?
Ans : "Platform work" means a work arrangement outside of a traditional employer-employee relationship in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services or any such other activities which may be notified by the Central Government, in exchange for payment;
Question: Who is a ‘platform worker’?
Ans : "Platform worker" means a person engaged in or undertaking
platform work
Question: What are ‘Wages’?
Ans: "Wages" means all remuneration, whether by way of salaries, allowances or otherwise, expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes,—
(a) basic pay
(b) dearness allowance; and (c) retaining allowance, if any, but does not include—
(a) any bonus payable under any law for the time being in force, which does not form part of the remuneration payable under the terms of employment;
(b) the value of any house-accommodation, or of the supply of light, water, medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the
appropriate Government; (c) any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon; (d) any conveyance allowance or the value of any travelling concession; (e) any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment; (f) house rent allowance; (g) remuneration payable under any award or settlement between the parties or order of a court or Tribunal; (h) any overtime allowance; (i) any commission payable to the employee; (j) any gratuity payable on the termination of employment; (k) any retrenchment compensation or other retirement benefit payable to the employee or any ex gratia payment made to him on the termination of employment, under any law for the time being in force: Provided that for calculating the wages under this clause, if payments made by the employer to the employee under sub-clauses (a) to (i) exceeds one-half, or such other per cent. as may be notified by the Central Government, of the all remuneration calculated under this clause, the amount which exceeds such one-half, or the per cent. so notified, shall be deemed as remuneration and shall be accordingly added in wages under this clause: Provided further that for the purpose of equal wages to all genders and for the purpose of payment of wages, the emoluments specified in sub-clauses (d), (f), (g) and (h) shall be taken for computation of wage.
Explanation.—Where an employee is given in lieu of the whole or part of the wages payable to him, any remuneration in kind by his employer, the value of such remuneration in kind which does not exceed fifteen per cent. of the total wages payable to him, shall be deemed to form part of the wages of such employee;
Question : What is ‘unorganised sector’?
Ans : "Unorganised sector" means an enterprise owned by individuals or self-employed workers and engaged in the production or sale of goods or providing service of any kind whatsoever, and where the enterprise employs workers, the number of such workers is less than ten;
Question:Who is an ‘unorganised worker’?
Ans: "Unorganised worker" means a home-based worker, self-employed worker or a wage worker in the unorganised sector and includes a worker in the organised sector who is not covered by the Industrial Disputes Act, 1947 or Chapters III to VII of Code on Social Security;
Question: The Code on Social Security, 2020 covers which measures to extend welfare benefits to a large domain of workers?
Ans:
1)Establishment of a National Social Security Board to advise the Government for formulating and monitoring suitable schemes for different sections of workers in the unorganised , gig and platform sectors. 2)Provision for State Unorganised workers Social Security Board that will advise the state governments about suitable schemes for unorganised workers, gig and platform workers, covered under Section 6(9).
3)Creation of a Social Security Fund based on contributions from the Central & State Governments , collected from Corporate Social Responsibility, fines collected due to compounding etc. This fund will be used to provide benefits such as life insurance, disability cover, health and maternity benefits, and provident fund schemes for these workers.
4)Section 13 has also been envisaged for entrustment of additional functions to social security organisations , for future requirement
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Question:The Constitution of ESCI consists of whom ?
Ans: (a) a Chairperson to be appointed by the Central Government; (b) a Vice-Chairperson to be appointed by the Central Government;
(c) not more than five persons to be appointed by the Central Government from amongst its officials;
(d) one person representing each of such States in such manner, as may be prescribed by the Central Government;
(e) one person to be appointed by the Central Government to represent the Union territories;
(f) ten persons representing employers to be appointed by the Central Government in consultation with such organisations of employers as may be recognised for the purpose by the Central Government;
(g) ten persons representing employees to be appointed by the Central Government in consultation with such organisations of employees as may be recognised for the purpose by the Central Government;
(h) two persons representing the medical profession to be appointed by the Central Government in consultation with such organisations of medical practitioners as may be recognised for the purpose by the Central
Government;
(i) three members of Parliament of whom two shall be members of the House of the People (Lok Sabha) and one shall be a member of the Council of States (Rajya Sabha) elected respectively by the members of the House of the People and the members of the Council of States; and
(j) the Director General of the Corporation, ex officio
========================================= Question:National Social Security Board consists of whom ?
Ans:The National Social Security Board shall consist of the following members, namely:—
(a) Union Minister for Labour and Employment as Chairperson;
(b) Secretary, Ministry of Labour and Employment as Vice-Chairperson; (c) forty members to be nominated by the Central Government, out of whom—
(i) seven members representing unorganised sector workers; (ii) seven members representing employers of unorganised sector; (iii) seven members representing eminent persons from civil society; (iv) two members representing the Lok Sabha and one from the Rajya Sabha; (v) ten members representing Central Government Ministries and Departments concerned; (vi) five members representing State Governments; (vii) one member representing the Union territories; and (d) the Director General Labour Welfare, as Member-Secretary, ex officio.
Question:What is the term of the National Social Security Board ? Ans: The term of the National Social Security Board shall be three years ===========================================
Question: State Board to be known as (name of the State) Unorganised Workers' Social Security Board consists of whom ?
Ans: Every State Unorganised Workers' Board shall consist of the following members, namely:—
(a) Minister of Labour and Employment of the concerned State as Chairperson, ex officio;
(b) Principal Secretary or Secretary (Labour) as Vice-Chairperson;
(c) one member representing the Central Government in the Ministry of Labour and Employment;
(d) thirty-one members to be nominated by the State Government, out of whom—
(i) seven representing the unorganised workers; (ii) seven representing
employers of unorganised workers; (iii) two members representing the Legislative Assembly of the concerned State; (iv) five members representing eminent persons from civil society; (v) ten members representing the State Government Departments concerned; and
(e) Member-Secretary as notified by the State Government.
Question: What is the term of the State Unorganised Workers' Board shall be how many years?
Ans: The term of the State Unorganised Workers' Board shall be three years
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Question: Every State Government shall, by notification, appoint, constitute a Board to be known as the................(name of the State) Building and Other Construction Workers' Welfare Board to exercise the powers conferred on, and perform the functions assigned to, it under this section and Chapter VIII . It consists of whom ?
Ans:The Building Workers' Welfare Board shall consist of a chairperson to be nominated by the State Government, one member to be nominated by the Central Government and such number of other members, not exceeding fifteen, as may be appointed to it by the State Government:
Provided that the Building Workers' Welfare Board shall include an equal number of members representing the State Government, the employers and the building workers and that at least one member of the Board shall be a woman
======================================= Question: Who comes under Universal Coverage under EPFO mentioned in Code on Social Security, 2020 ?
Ans : The Employees Provident Fund & Miscellaneous Provisions Act, 1952, valid for the establishments mentioned in Schedule 1 of the Act, has been removed under the code.
Now, the Code on Social Security, 2020 extends the coverage of the Employees’ Provident Fund (EPF) with the provisions applying to all establishments that have 20 or more employees, regardless of the type of industry.
More workplaces and workers will be covered under the Provident Fund system, allowing a larger number of employees to receive social security benefits like retirement savings. Since applicability issue is resolved, it shall reduce litigation.
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Question: What is the method of National Registration & Unique Identification under Code of Social Security,2020?
Ans: The Central Government will build a National Database of Unorganized Workers to make it easier to design and deliver social security benefits for specific worker groups. All unorganized, gig, and platform workers will have to register themselves on a National Portal, post which each worker will receive a Unique Identification Number. Verified through Aadhaar, it will be valid across the entire country.
This will ensure that workers, especially migrant workers, can carry their benefits with them even if they move to another place for work.
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Question : What is Uniform Definition of “Wages” as per Code on Social Security, 2020 ?
Ans: A standardized definition of “wages” across all labour laws for social security purposes to be followed. As per the Code, the definition of “Wage” includes basic pay, dearness allowance, and retaining allowance, if any.
If other pay-outs such as bonus, house rent allowance, conveyance allowance, overtime allowance, or commission exceed 50% of the total remuneration (or such percentage as notified by the Government), the excess amount will be added back to wages.
This will increase the wage amount and, in turn, enhance the value of social security benefits such as gratuity, pension, and leave salary, which are linked to wages.
==================================== 6. As per Code on Social Security, 2020 what is the expanded Definition of “Family” ?
Ans : The Code expands the definition of “family” to include the mother-in-law and father-in-law of a woman employee (subject to an income cap). It also includes a minor unmarried brother or sister who is wholly dependent on the insured person, if the parents are not alive.
This expansion increases the coverage of family members eligible for ESIC benefits.
Question: Whether Commuting Accidents Covered under Employee’s Compensation ?
Ans: Earlier, accidents that occurred while an employee was travelling
between home and the workplace were not treated as work-related, and employees or their families were not eligible for compensation.
The Code on Social Security, 2020 has changed this. Now, any accident that happens while commuting to or from work will be considered as having occurred “in the course of employment.”
Affected employees or their families can receive compensation or ESIC benefits in such cases.
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Question: How is the Code of Social Security, 2020 is Pro-women? Ans : Extension of ESIC Coverage
Earlier, ESIC coverage was limited only to certain notified areas. Under the Code, ESIC coverage has now been extended across India by removing this restriction.
Additionally, Voluntary ESIC membership is also allowed for establishments with fewer than 10 employees, if both the employer and employees agree to join.
For hazardous or life-threatening occupations, the minimum limit of 10 workers has been removed. ESIC coverage is now mandatory even for a single worker engaged in such work. ESIC benefits can also be extended to plantation workers if the employer chooses to opt in.
(i). Maternity Benefit Entitlement
Every woman employee who has worked for at least 80 days in the 12 months before the expected delivery is eligible for maternity benefit equal to her average daily wages during the leave period.
The maximum duration of maternity leave is 26 weeks, of which up to 8 weeks can be taken before delivery.
A woman who adopts a child below 3 months of age or a commissioning mother (a biological mother who uses surrogacy) is entitled to 12 weeks of maternity benefit from the date of adoption or when the child is handed over.
(ii). Work from Home
To provide more flexibility to women returning after maternity leave, the Code allows them to work from home, if the nature of work permits.
The employer may permit work from home based on mutual agreement
between the employer and the employee.
(iii). Simplified Certification for proof of Delivery, etc.
Proof of maternity-related conditions such as pregnancy, delivery, miscarriage, or related illness has been simplified under the Code. Medical certificates can now be issued by:
● A registered medical practitioner
● An accredited social health activist (ASHA worker)
● A qualified auxiliary nurse, or
● A midwife
(iv). Medical Bonus
Under Section 64, if the employer does not provide free pre-natal and post-natal care, the woman employee is entitled to a medical bonus of ₹3,500.
(v). Nursing Breaks
After returning to work post-childbirth, a woman employee is entitled to two nursing breaks each day for nursing her child until the child attains 15 months of age.
(vi). Crèche Facility
Every establishment with 50 or more employees must provide a crèche facility within a prescribed distance. This requirement is now gender-neutral and applies to all types of establishments.
============================================= Question: What are the highlights of code on social security, 2020 ?
Ans :
1. Digitalisation
It provides for maintaining all records, registers, and returns in electronic form. This will reduce compliance costs for employers and make processes simpler and more efficient.
2. Limitation on Inquiry
A five-year limit has been introduced for starting any inquiry under the Employees’ Provident Fund to determine applicability or recover dues. Such inquiries must be completed within two years from the date they begin, with a possible extension of one year if approved by the Central
Provident Fund Commissioner (CPFC).
This reform helps improve timely compliance and faster case resolution. 3. It Reduced Deposit for Appeals
For filing an appeal before tribunal against the order of EPFO officer, the deposit of 25% of the awarded amount determined by the EPFO officer will be required to be deposited by the employer against existing provision of between 40% to 70% of the awarded amount on discretion of the tribunal.
4. Self-Assessment of Cess
New provision of self-assessment of cost of construction and payment of cess thereon for construction of building or other construction works has been introduced. This will enable faster and easier collection of cess, which will be used for the welfare of Building and Other Construction Workers.
5. Now ESIC for Plantations also:
As per existing Act, plantation owners are not covered by ESIC Schemes. The Code now gives them the option to join ESIC voluntarily.
6. Decriminalization of Offences
At present, there is no provision for compounding of offences, nor any provision to give notice to an establishment to comply with the laws in case of a violation.
The Code has now mandated that a 30-day notice of improvement be given to the employer in case of any violation, allowing time to rectify non-compliance. This promotes fairness, provides an opportunity for correction, and encourages voluntary adherence rather than punitive enforcement.
Further, the Code has replaced imprisonment with monetary fines for 13 offences, and 7 violations carrying imprisonment of less than one year can now be compounded into penalties or fines.
Replacing criminal penalties with fines reduces the fear of imprisonment, encourages voluntary compliance, reduces litigation, and promotes ease of doing business.
7.A new post ‘Inspector-cum-Facilitator’ in place of ‘Inspector’: Under Section 72 of the Code, ‘Inspector cum facilitator’ in place of
inspector and randomized web-based inspection system aims to reduce the traditional “inspector raj,” where inspections were often seen as intrusive and burdensome. Inspectors will now function as facilitators, helping employers comply with laws, rules, and regulations rather than merely policing them.
The use of technology and clear guidelines make inspections transparent, and encourage compliance through guidance. It helps create a harmonious work environment, which benefits both employee and employers and facilitates ease of doing business.
8. Compounding of Offences allowed:
Compounding of offences through authorized officers is allowed and First-time offences can be settled with fines. The provision, reduces legal burden, speeds up resolution, and promotes ease of doing business.
● First-time offences that are punishable with fines shall be compoundable by paying 50% of the maximum fine.
● Offences punishable with fine or imprisonment or both shall also be compoundable by paying 75% of the maximum fine, making the law less punitive and more compliance-oriented.
● Employers can avoid prolonged litigation by paying a prescribed penalty and ensuring compliance.
The provision reduces court burden, provides quick resolution, and encourages businesses to maintain compliance without harsh penalties.
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Question: What are the Pre-employment provisions under Code of Social Security, 2020 ? :
Ans :
1. Career Centres
In order to better connect job seekers with employers, Career Centres will be established by the Government that will offer services such as registration, vocational guidance, and job matching. These centres will function as modern employment exchanges through both digital and physical platforms.
Employers are required to report vacancies to these centres, making it easier for job seekers to find employment and thereby promoting overall job growth in the country.
2. Fixed-Term Employment
With the Code on Social Security 2020 in place, fixed-term employees are now eligible for gratuity after completing one year of continuous service, a benefit that was earlier available only to permanent employees. Fixed-term employees (employed for a specific duration under a contract) shall be entitled to the same social security benefits (such as gratuity and pension) as permanent employees.
3. Universal Coverage of Workers
The Code broadens social security and employment coverage to categories of workers who were earlier outside the scope of such benefits.
(a) Gig and Platform Workers:
For the first time, these categories have been formally recognised. The Code mandates the framing of social security schemes for them, covering life insurance, disability insurance, health, maternity, and pension benefits. This will help gig and platform workers live with dignity and security.
(b) Unorganised Sector / Self-Employed Workers:
The Code provides for social security schemes for self-employed and unorganised workers, as well as other classes of persons, ensuring their welfare and protection.
Question: How the Code on Social Security, 2020 simplified the procedures?
Ans : The Code on Social Security, 2020 consolidates nine existing labour laws into a single, comprehensive framework. It is a step to ensure universal social protection for all workers by strengthening social welfare coverage for both organized and unorganized workers including gig and platform workers. It also promotes women’s participation in the workforce, and simplifies compliance, thereby enhancing ease of doing business.
The Code reflects the Government’s commitment towards inclusive growth and social security for all, in line with the vision of a Viksit Bharat by 2047.
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Question: Social Security Code extends to which type of workers ?
Ans : The Code extends social security to all workers including:- i)unorganized,
ii)gig,
iii) platform workers
Ans: All the above
Question: Social Security Code covers which aspects ? Ans : It is covering:-
i)life,
ii)health,
iii)maternity, and
iv)provident fund benefits,
Question: Social security code is introducing which aspect ? It aimed at what ?
Ans : It is introducing digital systems and facilitator-based compliance for greater efficiency.
The Code on Social Security, 2020 represents a significant reform in India’s labour welfare framework, aimed at ensuring comprehensive and inclusive social protection for all sections of the workforce. It consolidates nine existing social security laws into a single, streamlined framework that extends coverage to organized, unorganized, gig, and platform workers alike.
By bringing diverse labour laws under one umbrella, the Code seeks to simplify compliance, enhance efficiency, and expand access to benefits such as life and disability insurance, health and maternity care, provident fund, and gratuity. It also introduces digital systems and transparent facilitation mechanisms to strengthen implementation and support both employers and employees.
Question :What is Time-bound EPF (Employees’ Provident Fund) Inquiries?
Ans: A five-year limit has been set for initiating EPF inquiries and recovery proceedings, to be completed within two years (extendable by one). Suo-moto reopening of cases has been abolished, ensuring timely resolution.
Question :What is Self-assessment for Construction Cess? Ans: Employers can now self-assess cess liabilities in respect to Building and Other Construction Work, previously assessed by the notified Government authority. It reduces procedural delays and official intervention.
Question : What is Social Security Fund?
Ans: A dedicated fund to finance schemes for unorganised,
gig, and platform workers, covering life, disability, health, and old-age benefits has been proposed. The amount collected through the compounding of offences will be credited to this Fund and used by the Government.
Question :What is Uniform Definition of Wages?
Ans: “Wages” now include basic pay, dearness allowance, and retaining allowance; 50% of the total remuneration (or such percentage as may be notified) shall be added back to compute wages, ensuring consistency in calculating gratuity, pension, and social security benefits.
Question : How much Gratuity for Fixed-Term Employees? Ans:Fixed-term employees become eligible for gratuity after one year of continuous service (earlier five years).
Question : What is Decriminalization & Monetary Fines?
Ans: The code has replaced imprisonment with monetary fines for certain offences. The employer will be given mandatory 30 days’ notice for compliance before taking any legal action.
Question :What is Digitization of Compliance?
Ans: Mandates electronic maintenance of records, registers, and returns, cutting costs and improving efficiency.
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The Building and Other Construction Workers' Welfare Cess ===================================
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