Management Of Informal

Sector
Existing Management, Organizational setup and
Limitations
Informal Sector:

The First Indian National Commission on Labor (1966-69) defined unorganized sector workforce as

“Those workers who have not been able to organize themselves in pursuit of their common interest
dues to certain constraints like casual nature of employment, ignorance and illiteracy, small and
scattered size of establishments”.

Existing Management in Informal Sector:

It is a well-known fact that most recycling activities in India are carried out in the informal or the
unorganized sector and e-waste recycling is no exception. The informal sector has a historic role in
waste management and recycling, partly because of the notion of waste being a fringe commodity,
rather than being a waste. As a result, historically the fringe commodity was left to be handled by the
fringes of society – the informal sector. With the widespread development of governments over the
last few decades, waste management has fallen into the hands of local governments which have
been overwhelmed by the quantities of waste generated in large cities. The existing informal sector
has been contributing to reduce the burden of formal waste management agencies. Their
widespread and active network and manual skills make recycling of e-waste a profitable business
venture. The MAIT-GTZ e- waste assessment study mentioned above also revealed that 94% of the
manufacturers included in the study did not have an IT disposal policy and were not aware of the
current waste handling practices. Therefore, most of the e-waste was being disposed off to the scrap
dealers who in turn sold the waste to the recyclers in the informal sector. The recycling in the
informal sectors essentially involves dismantling and sometimes includes the extraction of precious
metals.

Based on the existing evidences informal recycling is the most pressing environmental issue
associated with the E-waste. According to Chatterjee (2012), ninety- five percentage of the E-waste in
India is being recycled in non-formal sector and five percentage of the E-waste volume are handled in
formal unit. The authorized E-waste recycling facilities in India capture only 3% of total E-waste
generated; the rest makes its way to informal recycling yards in major cities like Delhi, Mumbai and
Bangalore (Greenpeace, 2008). This is because businesses sell their discarded IT and other
equipment to informal recyclers for quick money without realizing the hazardous implications it
causes to health and environment. Currently, in India, there are over 2000 units engaged in non-
formal sector for E-waste recycling. Such Non-formal units of E-waste recyclers are distributed almost
all over India especially in states like in Delhi, Karnataka, Maharashtra, Gujarat, West Bengal etc.

There are well-established networks of waste collectors/dealers, dismantlers, and recyclers in India,
most of which belong to the informal sector. Each such unit operates in a small scale, as for example
in the form of door-to-door waste collectors/dealers, known locally as “kawariwalas”.Non-formal
units generally follow the steps such as collection of the E-waste from the rag pickers, disassembly of
the products for their useable parts, components, modules, which are having resell value. The rest of
the material is chemically treated to recover precious metals causing leaching of hazardous
substances to the air, soil, and water. Such recycling method has low efficiency and recovery is
carried out only for valuable metals like gold, silver, aluminium, copper, etc and other materials such
as tantalum, cadmium, zinc, palladium etc. could not be recovered.
Organisations in Informal Sector:

These are the Organizations’ involve in managing the informal sector. In these some are working in
National level, some are working in International level and some are in local level.

1. International Labour Organization (ILO)

2. National Sample Survey Organisation (NSSO)

3. World Health Organization (WHO)

4. WEIGO

5. Non-Governmental Organizations

Role of Organizations in Informal Sector:

Direct contact with ‘worker organizations’, Sharing & Learning and conducting workshops, Policy
dialogue, Regional meetings, Papers, Articles, Development and Dissemination of accessible
materials.

Average Annual Growth Rate of workers by sector and sex between 1999-2000 and 2004-05 (in
percent)

Sector Sex Informal Formal Sector Total

Sector
Rural Male 2.08 3.03 2.17
Female 3.51 4.82 3.58
Persons 2.60 3.45 2.67
Urban Male 4.18 0.09 3.25
Female 5.60 0.97 4.82
Persons 4.49 0.23 3.5
total Male 2.79 -0.31 2.48
Female 3.91 0.98 3.78
Persons 3.16 -0.10 2.89

It is observed here that the growth rate of female workers both in rural as well as in urban areas is
greater than male workers growth rate and within the female workers growth rate of urban female
informal workers (5.60 percent) is more than rural female (3.64 percent) between 1999-00 and 2004-
05. In case of formal workers the growth rate of male informal workers is negative. The absolute
number of male formal workers came down from 29.28 million in 1999-00 to 28.83 million in 2004-
05. This negative growth is due to fall in formal employment in rural male segment. Female workers
in formal workers category increase by around 1 percent of growth rate both in rural as well as urban
areas.
Policies aims:

1. Create More Jobs, Preferably Decent Jobs

2. Extend State Protection to the Informal Workforce

3. Formalize the Informal Economy

4. Social Protection.

Street Vendor Policy:

To regulate street vendors in public areas and protect their rights.

Aims:

1. Town Vending Committee will be responsible for conducting of survey of all the vendors under its
jurisdiction, and such survey must be conducted every five years. No street vendor will be evicted until
such survey has been made and a certificate of vending has been issued.

2. All street vendors will be accommodated in a designated vending zone. In case, all the vendors
cannot be accommodated in the same vending zone, allocation of space will be made by drawing of
lots. However, those who fail to get space in the same vending zone, will be accommodated in
adjoining vending zones.

3. All street vendors above fourteen years of age will be granted a certificate of vending. However,
such certificates will be granted only if the person gives an undertaking that he will carry out his
business by himself or through the help of his family members,

4. No vendor will be allowed to carry out vending activities in no-vending zones..

5. There shall be a dispute resolution body consisting of a Chairperson who has been a civil judge or
a judicial magistrate and two other professionals as prescribed by the appropriate government.

6. There will be a Town Vending Committee in each zone or ward of the local authority.

Stakeholders in management of Informal Sector:

1. Government (national & local)

2. Private sector

3. Civil society (trade unions + MBO’s of working poor + NGO’s working on labor and

Employment issues.

Involvement:

Collected E-waste from diversified sources is segregated in various categories such as components,
modules, metals, glass and plastics depending on the saleability for highest economic returns Such
segregation operation is done either by the kawaries and scrap dealers or by whole sellers and
recyclers. Similarly, dismantling and disassembling methods are also carried out by the same
stakeholders along with dismantlers who particularly focus on the process of dismantling. The
Kawaries and the scrape dealers sell all the dismantled and segregated parts of metal, glass and
plastics to metal/glass smelters and plastic re-processor who specialize in converting these scrap of
coppers, aluminium, iron, glass and plastics.

The contribution of unorganized sector in net Domestic Product is 56.7% in 2002-03. Thus,
the major chunk of NDP is provided by the unorganized sector.

Sector Share in Net Domestic Product (2002-03)

Unorganised Organised
, 56.7 , 43.3

Source: NAS 2005

Emerging Issues in Informal Sector:

1. Insufficient infrastructure

2. Lack of clearly defined activity areas

3. Insecurity of trade in terms of space tenure.

4. Poor circulation

5. Employment opportunities

6. Market for products

Advantages of investment in urban “informal” sector:

1. Contributes to economic growth

2. Requires small capital investment

3. Requires low cost of training and education

4. Supplies semi-skilled labor to industry

5. Uses labor-intensive technology to create jobs

Disadvantages of investment in the urban informal sector:

1. Induces R-U migration

2. Exerts pressure on urban infrastructure

3. Adds to pollution, congestion, and crime

Women in Informal sector:

1 .Represent the bulk of the informal sector labor supply

2. Earn low wages in unstable jobs with no benefits (e.g., housekeeping)

3. Run micro-enterprises(e.g., home-made foodstuffs and handicrafts

4. Engage in illegal activities (e.g., prostitution).