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LABOUR IN UNORGANISED SECTOR
RISHABH SINGH D.S.N.L.U Page 0 of 16 3/21/2013
DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY VISAKHAPATNAM Certificate This is to certify that Mr/Miss_______________________ with reg no. Signature of the faculty Page 1 of 16 .__________________ Of ______semester prepared the project on ___________________________________________________________________________ ___________________________________________________________________________ In partial fulfilment of his/her semester course in the subject __________________________ During the academic year 2012-2013 under my supervision and guidance.
B 201289 Page 2 of 16 . I also want to thank all of my friends. And at last I am very much obliged to the God who provided me the potential for the rigorous research work.L.ACKNOWLEDGEMENT I am feeling highly elated to work on the topic “LABOUR IN UNORGANISED SECTOR” under the guidance of my SOCIOLOGY teacher. I would like to enlighten my readers regarding this topic and I hope I have tried my best to pave the way for bringing more luminosity to this topic. L. At finally yet importantly I would like to thank my parents for the financial support. I want to give special thanks to the librarian of my university who made every relevant materials regarding to my topic available to me at the time of my busy research work and gave me assistance.A. NAME-RISHABH SINGH B. I am very grateful to her for her exemplary guidance. without whose cooperation this project was not possible. Apart from all these.
PROBLEM OF UNORGANISED SECTOR FROM ORGANISED SECTOR CONCLUSION REFERENCES Page 3 of 16 .CONTENT ABSTRACT INTRODUCTION UNORGANISED SECTOR EMPLOYEMENT: RESIDUAL EMPLOYEMENT PROBLEMS IN UNORGANISED SECTOR NO CONCEPT OF LABOUR AND TRADE UNION PROBLEM OF UNORGANISED SECTOR FROM THE GOVT.
However. INTRODUCTION The definition of informal sector as adopted by the Fifteenth International Conference of Labor Statisticians in 1993. 2004 as an advisory body and watchdog for the informal sector. The Government of India set-up a ‘National Commission on Enterprises in the Unorganized/Informal Sector' through a resolution dated 20th September. and also explained about unorganized sectors details and issues and challenges details. This paper is based on Issues and Challenges of employment in unorganized sectors. the fact remains that it has emerged as a dynamic and vibrant sector. and enterprises of informal employers. Although various conceptualizations of the informal sector have been debated ever since the term "informal sector" was coined by the British economist Keith Hart in 1971. contribution of these formal activities in the unorganized sector is quite small he term informal sector was coined by the British economist Keith Hart in 1971. and the conclusion of unorganized sectors details. which employ one or more employees on a continuous basis. The unorganized sector also includes some formal activities on which there is no regular system of data availability. which may employ contributing family workers and employees on an occasional basis.LABOUR IN UNORGANISED SECTOR ABSTRACT Informal sector is referred to as the unorganized sector. The unorganized sector also includes some formal activities on which there is no regular system of data availability. the fact remains Page 4 of 16 . Status. representing a growing proportion of economic activity. This sector broadly corresponds to the household sector including private unincorporated enterprises. and it is explain about introduction of unorganized sector. is regarded as a group of household enterprises or unincorporated enterprises owned by households that includes informal own-account enterprises. Issues and Challenges of employment in India. This sector broadly corresponds to the household sector including private unincorporated enterprises. particularly in the developing countries.
enterprises run by the cooperative societies. entrepreneurship development. The unorganized sector also includes some formal activities on which there is no regular system of data availability. the adoption of a uniform definition of un-organized/informal sector. can be considered as a sub-set of the unorganized sector.2013 Page 5 of 16 . access to raw materials. 2004 as an advisory body and watchdog for the informal sector. infrastructure. the unorganized sector refers to those enterprises whose activities and/or collection of data are not regulated under any legal provision or where any regular accounts are not maintained. The first Indian National Commission on Labor (1966-69) defined the „unorganized sector work-force' as "those workers who have not been able to organize themselves in pursuit of their common interest due to certain constraints like casual nature of employment. based on the characteristics of the enterprises.that it has emerged as a dynamic and vibrant sector. On the other hand.gov. and magnitude of employment. representing a growing proportion of economic activity. particularly in the developing countries. their size. Further. ignorance and illiteracy.1 1 www. trusts. The terms of reference of the Commission included (i) the status of unorganized/informal sector in India including the nature of enterprises. small and scattered size of establishments". (i) identify constraints faced by small enterprises with regard to freedom of carrying out the enterprise. etc. finance. In the informal sector is referred to as the unorganized sector. therefore. private and limited companies are also covered. However. As the Commission started functioning. in addition to the unincorporated proprieties or partnership enterprises. in the unorganized sector. technology and markets and suggest measures to provide institutional support and linkages to facilitate easy access to them.in 7th march. (ii) the existing arrangements for estimating employment and unemployment in the informal sector (iii) suggest elements of an employment strategy focusing on the informal sector. skills. The informal sector. contribution of these formal activities in the unorganized sector is quite small. The Government of India set-up a „National Commission on Enterprises in the Unorganized/Informal Sector' through a resolution dated 20th September. spread and scope.dcmsme. became an absolute necessity for the completion of its tasks. This sector broadly corresponds to the household sector including private unincorporated enterprises.
It Provides income earning opportunity to the largest number of workers in India Forms the basis of livelihood for millions Employees both men and women Employees children in some industries Relevancy of Unorganized Sector . Relevancy of Unorganized Sector Contributions to national product and Net domestic product 92% of the total workforce in a country were employed in the unorganized sector 370 million workers constitute the work force of unorganized sector.17 16.37 Transport. This can be Identified On the basis of the nature of work that workers or employees are engaged on the number of employees in undertakings.39 238.Definition: Part of the workforce who have not been able to organize in pursuit of a common objective because of constraints such as casual nature of employment ignorance and illiteracy small size of establishments with low capital investment per person employed scattered nature of establishments superior strength of the employer “The unorganized Sector consists of all private enterprises having less than ten total workers. Storage & Comm. Estimated Contribution to Employment Year: 1999/00 (Total labor force: 406 million) (GDP share: 63%) Industrial Category No.36 Trade.By National Commission on Enterprises in the Unorganized/Informal Sector in 2004.65 Page 6 of 16 .15 11.01 1. Gas And Water 1 0. Hotels And Restaurants 0.49 40.48 Financial Services 1.5 Mining & Quarrying 1.04 Construction 1. operating on a proprietary or partnership basis. Contribute Significantly to National Product.71 37. 3.25 Manufacturing 6. Over 60% share as per current price in NDP.07 Electricity. Categories of unorganized labor Contract labor including construction workers Casual labor Labor employed in small scale industry Handloom/power-loom workers Beedi and cigar workers Employees in shops and commercial establishments Sweepers and scavengers Workers in tanneries Tribal labor Other unprotected labor.87 Non- Agriculture 26. Part of the labor market which is unregulated and to a large extent unprotected Attempt to improve the socio-economic conditions for the unorganized sector will create hurdles in the smooth functioning of market led economy. of persons (in millions) Formal Sector Informal Sector Agriculture 1. Few examples Forest workers Tribal trying to follow traditional vocations within their traditional habitats Fishermen who venture out to sea in vulnerable canoes People working in their homes with software People assembling parts for a highly sophisticated product.68 131.” .
The GDP estimates of unorganized sector in each compilation category are initially prepared for a bench mark year by using labor input method.7 % is informal in 2001-02. Value added per worker estimated from 55th. Multiplying the employment with value added per worker to arrive at the informal sector estimates.94% in 2004-05 Methodology2.3.37. DGET etc.42% in 1999-2000 and 49.5 % of NDP belongs to unorganized sector of which 47. It is evident that throughout this period an overwhelmingly large portion of the workforce in India is found to be employed in the 2 National commission report. Contribution to savings and capital formation Sharing of only household sector in Total Gross Domestic Saving mainly unorganized sector is about three fourth.2008 Page 7 of 16 . How is it calculated? Various Methods used by National Commission for Enterprises in the Unorganized Sector Item CSO Kolli & Hazra Sub Group Definitions of unorganized sectors Follows different criteria for different industry groups mainly dictated by availability of data Enterprises employing upto 5 workers with certain exemptions as informal sector which is a sub set of the CSO's unorganized sector. Employment estimates from 55th round for all compilation categories. UNORGANISED SECTOR EMPLOYEMENT:-RESIDUAL EMPLOYEMENT Over half of India‟s national output comes from the unorganized sector. Keeping the overall unorganized sector as defined by CSO constant. NSS surveys on Employment & Unemployment. the benchmark year estimates are extrapolated with appropriate physical indicators and the relevant price indices. Broad employment trends for the organized and unorganized sector is shown in Table 1 for the years 1983. 1993-94 and 1999-2000. 1987-88.29 Community Services 11.07 (93%) 370. Employment estimates from 55th and 61st Round EUS survey. 55. Proprietary and partnership enterprises employing less than 10 workers Share of Unorganized Sector Varies between 57 and 60 percent since 1993-94 58. For the subsequent years. employment creation in the informal segment of the economy has been tremendous.64 All Sectors 28. In the services sector total GDP was apportioned.49 21. The labor input data is obtained from Census of Small Scale Industry. Value added per worker for services from 57th round and for the rest of the sectors from 55th round. More than 30% of National Income comes from Unorganized Sector. While employment in the formal sector has been stagnant in the last decade. Apportioning was not limited only to unorganized sector GDP. 56th and 57th round unorganized sector surveys.
we witness a sharp decline in employment opportunities. the decade of the 1990s in India has been characterized by slow growth in employment opportunities.26 per cent between 1983 and 1993-94. it is estimated that 371. While employment in the formal sector has been stagnant in the last decade.2013. The share of unorganized employment in the economy has displayed remarkable steadiness over the years.4.00pm th Page 8 of 16 . the growth rate was around 2.com/site/tag/unorganized-sector. Overall.govt. During this period organized employment grew by only 0.8 million workers (7 per cent) are engaged in the organized sector. where the compound annual growth rates of employment in the organized and unorganized sector are presented.2 million workers (nearly 93 per cent) are employed in the unorganized segment of the economy whereas only 27.2013.05 per cent while during the period of 1983 to 1993-94. This fact clearly indicates that unorganized sector served as a buffer for the workforce when the employment opportunity in organized sector dwindled.12 march.12 march.25 per cent.8 million in 1999-2000. It is clear that employment opportunity in the organized sector has remained more or less stagnant. The near stagnancy of employment opportunity in the organized sector becomes evident from Table 2.in. Employment in the organized sector has registered a growth of 1. .4. employment in the unorganized sector grew by 2. the unorganized sector also underwent a sharp slump during the 1990s with the growth rate of employment falling to 1. Broad employment trends for the organized and unorganized sector is shown in Table 1 for the 3 4 Cbwe.3 But during the decade of the 1990s.34 per cent. employment creation in the informal segment of the economy has been tremendous. We observe that during 1983 to 1987-88.unorganised sector.27 per cent.25 per cent between 1983 and 1987-88 and 1. showing only a marginal increase from 24 million in 1983 to 27.00pm th theopendata.4 Over half of India‟s national output comes from the unorganised sector. This is also true for the unorganized sector of the economy. The stagnancy of employment opportunities in the organized sector in the 1980s has to a large extent been compensated by a significant expansion of workforce in the unorganized segment of the economy. Out of 399 million workers in 1999-2000. However. The share of informal employment has risen from 92 per cent (nearly 276 million out of 300 million) in 1983 to 93 per cent in the 1999-2000.
the thrust of the agenda item is to have changes required in the Acts and Rules. Out of 399 million workers in 1999-2000. many employers are reluctant to negotiate with unions. EXPLOITATION OF LABOUR UNORGANISED LABOUR The right to strike There is no statutory obligation to undertake collective bargaining and.years 1983. It recognizes that some changes in the labour laws may be required but such changes must fully protect the interest of workers and families and must take place after full consultation with trade unions. the ILC may consider deliberating and suggesting broad parameters taking which into account the requirements of the individual Acts would be examined separately and subsequently. The UPA will pursue a dialogue with industry and trade unions on this issue before coming up with specific proposals. penal provisions etc. it is estimated that 371. IMPEMENTATION OF LABOUR LEGISLATION The National Common Minimum Programme (NCMP) provides as follows: “The UPA rejects the idea of automatic hire fire. Industry workers in public utilities Page 9 of 16 . Since our ultimate goal is to minimize violations.” The agenda item needs to be discussed against this background. inspections and concomitant action and the need to strengthen the labour enforcement machinery. consequently. furnishing returns. Workers have the right to strike but this right is restricted under the 1947 Industrial Disputes Act. However. the Acts / Rules provide for a framework of maintaining records. labour laws other than the Industrial Disputes Act that create on Inspector Raj will be re-examined and procedures harmonized and streamlined. which are denied if their implementation is tardy and ineffective. The labour laws are implemented by the implementation machineries of the appropriate Governments. In this context.2 million workers (nearly 93 per cent) are employed in the unorganized segment of the economy whereas only 27. To facilitate this. inspection system.8 million workers (7 per cent) are engaged in the organized sector. It is evident that throughout this period an overwhelmingly large portion of the workforce in India is found to be employed in the unorganized sector. 1993-94 and 1999-2000. 1987-88. the basic objective being that the labour laws have been enacted to confer certain benefits to the workers.
housekeeping. While public sector workers have only limited rights to organise and bargain collectively.3% of its total labour force of over 450 million. adivasis and women. educational and training institutions. information technology. race. Equality of employment Articles 14 and 15 of the Indian Constitution (equality before the law and prohibition of discrimination on grounds of religion. Among the proposals are amendments to Section 10 of the Contract Labour Act of 1970. etc. security. The International Labour Page 10 of 16 . maintenance and repair of machinery/plants.have to announce a strike at least 14 days in advance. and units exporting up to 75% or more of their production. Small informal firms employ around 40% of the workers. laundry. collection and disposal of garbage. canteen. Proposed amendments to the labour law The Second National Labour Commission has been preparing proposals for amendments to the labour law in order to make labour markets more flexible. which would permit contract labour arrangements in a number of processes such as cleaning. couriers. export-oriented units established in Special Economic Zones. Tamil Nadu has proposed a bill to extend the right to form trade unions to workers in informal employment. including domestic labour. support services in hospitals. or place of birth) do not appear to cover private sector employees. Some states also require private sector unions to submit a formal notification. There is also widespread discrimination against dalits. Women The Equal Remuneration Act of 1976 merely requires employers to pay equal remuneration to men and women for the same work or work of similar nature. caste. Contract labour India ‟s organised manufacturing sector employs only about 1. gardening. sex. but the bill has not yet been passed. workers in informal employment have practically no rights.
Organisation (ILO) Convention requires. building and construction workers. Handicraft artisans. Lady tailors. In terms of Service categories: Midwives. Carriers of head loads. migrant workers. Hamals. there exists a large section of unorganized labour force such as cobblers. 2. specially distressed categories and service categories. Government of India. In terms of Nature of Employment: Attached agricultural labourers. come under this category. 93% of India‟s workforce include the self employed and employed in unorganized sector. that the same pay should be given for work of equal value. The Ministry of Labour. however. which goes beyond “same” or “similar” work THE INDIAN SCENARIO The Indian Economy is characterized by the existence of a vast majority of informal or unorganized labour employment. share croppers. salt workers. In addition to these four categories. workers in brick kilns and stone quarries. labeling and packing. Barbers. fishermen. 4. 1. workers in saw mills. bonded labourers. nature of employment. Domestic workers. As per the Economic Survey 2007-08. belong to this category. In terms of Specially distressed categories: Toddy tappers. those engaged in animal husbandry. beedi rolling. Scavengers. Drivers of animal driven vehicles. has categorized the unorganized labour force under four groups in terms of Occupation. Loaders and unloads come under this category. Fishermen and women. Vegetable and fruit vendors. landless agricultural labourers. Physically Page 11 of 16 . 3. weavers. artisans. Newspaper vendors etc. leather workers. In terms of Occupation: Small and marginal farmers. Handloom weavers. contract and casual labourers come under this. oil mills etc.
As far the rural-urban break-up is concerned.mal sector in rural areas suggest that roughly 97 per cent and 94 per cent of male and female workers are found in the unorganized sector respectively. a difference of 1 per cent between direct and residual approach. On the other hand.5 UNORGANISED SECTOR EMPLOYEMENT. Rikshaw pullers.in 5 march. Tannery workers. Carpenters. Although the informal nature of farm activities in rural areas has been well documented. It is interesting to note that state-wise estimates of the formal/ informal sector share clearly show an overwhelming presence of the informal sector workforce in most Indian states. Power loom workers and Urban poor. the results show that the former accounted for a little over one-third while the latter around 80 per cent in the urban unorganized sector. while the share of the informal sector in urban areas accounts for around 75 per cent. This is particularly 5 Mopsi.rating the overall trends estimates from the direct approach also reveals that roughly 9 per cent of the workforce in India is in the organized sector while the rest 91 per cent are in the unorganized segment.ing presence of unorganized sector in India. it can be noted that 95 per cent of female workers and 89 per cent of male laborers are engaged in the unorganized segment in India. nearly 95 per cent of the rural workforce is engaged in unorganized activities whereas barely 5 per cent of rural workers are found in formal economic activities. The gender break-up of workforce in infor.2013 th Page 12 of 16 . nearly 80 per cent of rural non-farm activities is found to be in the informal sector. As far as male and female workforce break-up is concerned.DIRECT APPROACH Estimates from the residual approach suggest that 92 per cent of Indian laborers are engaged in the unorganized sector while organized segment constitutes the remaining 8 per cent. Corrobo. The informal nature of farm and non-farm activities in rural areas drives this trend of overwhelm. Further.handicapped self-employed persons. roughly two-thirds of the urban laborer‟s constituting around 76 per cent are engaged in the unorganized sector and the rest one-third of them are engaged in the organized segment. even non-agricultural activities appear to be extremely unorganized in nature in India. Thus.nic. Auto drivers. Sericulture workers. Estimates derived from the non-agricultural sector reveals that nearly 80 per cent of the workers are unorganized and the rest belongs to the category of formal employment.
Tamil Nadu. However. West Bengal. UP. Delhi and Kerala appear to have less unorganized workers.visible in economically backward states such as. These are the very same states whose share in agriculture and allied activities are extremly high relative to other states. Even in industrially advanced states such as. NO CONCEPT OF LABOUR AND TRADE UNION Problems of Unorganized Sector Women workers and „beedi‟ workers Desperately poor Low wages. etc. Bihar. Orissa and Rajasthan. disease causing environments. It is estimated that over 94 per cent of workers in these states are engaged in informal economic activities. the share of unorganized workers is close to 90 per cent of the total workforce. exploitation No concept of occupational safety/services Lack of implementation of Health & Safety legislation. Reliance) Loss of employment Legal “bullying” Buyer preference for the “cleaner” retail stores Financial aid not available to the unorganized Page 13 of 16 . PROBLEMS IN UNORGANISED SECTOR Problems of the workforce 90% of workforce in vast informal sector Little awareness of workplace hazards Living areas close to work areas Extended work hours. Gujarat. Maharashtra. and >50% women Deplorable social conditions PROBLEM OF UNORGANISED SECTOR FACED BY GOVERNMENT Problem of definition and identification Workforce uneducated about the benefits of organized sector Scattered nature of sector Employers avoid any form of regulation Unorganized sectors contribute to almost 60% of GDP (apart from providing livelihood to population) Same labor laws cannot be applied PROBLEMS OF UNORGANISED SECTOR FROM THE ORGANISED SECTOR Unfair competition (Walmart. smaller states such as Goa. accounting for roughly three-fourths in each of the states. Child labor. MP. fraudulent contractors.
Contribution by respective State Governments: 25% of the annual premium. and 55 per cent for males and 17 per cent for females in the urban areas.0 per cent in rural areas. On the basis of current daily status (unemployed on an average in the reference week). 67 per cent of usually employed males and 84 per cent of usually employed females were engaged in the agricultural sector. The cost of smart card will be borne by the Central Government. The beneficiary would pay Rs.in 8 Theopendata.6 per cent to 9.3 per cent in 2004 in rural areas. during the reference period. subject to a maximum of Rs. unemployment rate for males increased from 5. 6 7 Fedina.7 per cent to 8. 8 Unemployment rate for females increased from 5. One needs to examine to what extent institutional finance has a role to play in the lives of those self-employed.com Page 14 of 16 . “SWASTHYA BIMA YOJANA” SALIENT FEATURES OF THE SCHEME Funding Pattern Contribution by Government of India: 75% of the estimated annual premium of Rs. The administrative and other related cost of administering the scheme would be borne by the respective State Governments7 CONCLUSION In unorganized sector corresponding proportions in urban India were 44 per cent for males and 45 per cent for females.gov.6 per cent in 1993 -94 to 9.What can be done for this sector Govt has formed National Commission to address the peculiar issues with this sector Mainly working on Social security – recently approved Rs 1000 cr for this Adopted a concept of Growth pole to link this sector with organized sector Availability of capital for this sector Introduction of Health insurance Scheme – “SWASTHYA BIMA YOJANA” 6 20.1 per cent in urban areas. 565 per family per annum.sector easily to compete . 30 per annum as registration/renewal fee. and from 6. In the rural areas. as well as any additional premium. The gender differential in the worker population ratio (WPR) was distinct: 55 per cent for males and 33 per cent for females in the rural areas.750.org(20/03/2013) Rsby.
R Desai Fundamental of sociology – Rajendra Kumar Sharma Sociology in Indian context – V. carried out in 1999-2000. Commission of European Communities.9 BIBLIOGRAPHY Sociology: Understanding a Diverse Society . only 28 million (seven per cent) workers are employed in the organized sector and the remaining 93 per cent are employed in the unorganized sector. Central Statistical Organization. The results of the Survey of the National Sample Survey Organization (NSSO). United Nations and World Bank (1993): System of National Accounts 1993 2. therefore. has been playing a vital role in providing employment in the economy.in Page 15 of 16 . International Monetary Fund. The size of the unorganized sector is relatively large and will continue to be so in the years to come in view of the limited employment opportunities in the organized sector as also due to the outsourcing of a number of occupations/activities from the organized sector. The informal sector thus provides income-earning opportunity to a larger work force and a larger number of workers are getting their livelihood from the informal sector.A Handbook 3. Central Statistical Organization.5% every year.98% per year in the period 19994 to 2000. Organization for Economic Co-operation and Development (2002): Measuring the Non-Observed Economy . India (2004): Report of the Working Group on Workforce Estimation for Compilation of National Accounts Statistics with base Year 1999-2000 9 Mospi. The unorganized sector.A.Howard Francis Taylor Sociology in Perspective-mark Kirby Rural sociology in India .nic.C pandey REFERENCES 1. Organization for Economic Cooperation and Development. India (1998): National Industrial Classification 4.04% per year in the period 1983-94 to only 0. revealed that out of a total workforce of 397 million. This is while the labor force increases roughly by 2.The rate of growth of employment declined sharply from 2.
International Labour Office. Institute for Human Development. 6. 7. base year 1999-2000. 12.5. 33(4) Oct-Dec. 5. Human Development Resource Centre. Sastry. NLI Research Studies Series No 056/2004. India (2006): Brochure on New Series of National Accounts Statistics. Shiela (2003): „The Restructuring of the Unorganised Sector in India'. V V Giri National Labour Institute. International Labour Organisation (2004): Economic Security for a Better World. Geneva. 11. India (2007): National Accounts Statistics: Sources and Methods. 9. No. Discussion Paper Series – 7. Informal Sector in India – Perspectives and Policies. 11. New Delhi. ILO Socio-Economic Security Programme. Mitra. TRANS Asian Research Journals. New Delhi. 10. Institute for Human Development. Satpathy. Amitabh and Alakh N Sharma (ed). Noida. The Indian Journal of Labour Economics. N S (2004): „Estimating Informal Employment and Poverty in India'. 2 (2006) 119-132 14. 10. Central Statistical Organization. India. UNDP. Anoop (2004): „Size Composition and Characteristics of Informal Sector in India'. AJMR 13. Report on a Project Funded under the Planning Commission Scheme of SocioEconomic Research. International Journal of Development Issues. Arup (2001): „Employment in the Informal Sector' in Kundu. Bhalla. Page 16 of 16 . 8. Central Statistical Organization. Vol.
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