Unorganised sector in India

The Unorganised workforce of India

By: Staff Reporter

More than 82 percent of the workforce in India is employed in the unorganised sector, as noted by the International Labour Union in its India Labour Market Update of 2016. This report serves as the main source of data for the workforce in the unorganised sector.

Further, the Industry wise distribution of employment in the unorganised sector in India can be seen in the table below by Confederation of Indian Industry’s (CII) report called “An Analysis of the Informal Labour Market in India” for 2011-2012

Sector People working for unorganised sector in India(in million)
Mining 1.79
Manufacturing 52.49
Electricity and water supply 1.21
Construction 48.92
Trade, Hotel and Restaurant 50.17
Education 6.31
Health 2,68

Gross Value Added and the Unorganised Sector in India

The Gross Value Added (GVA) is considered as an important determiner when it comes to the economical contribution of the unorganised sector towards the country. GVA can be explained as the value of services and goods produced in a place, sector or industry. Both GVA and GDP are utilised to measure the output of a country, hence both are vital in each other’s calculation. In simple terms the calculation of GDP and GVA can be understood in the equation below;

GVA (+) Taxes on products (-) Subsidies on products = GDP

GVA is the total of all revenues from final sales and subsidies, which are primarily the income to any business.

The National Statistics Commission in their 2012 report of the Committee on Unorganised Sector Statistic highlighted the importance of unorganised workforce in influencing the country’s Gross Value Added (GVA) percentage.

The table below shows the amount of Gross Value Added (GVA) by the unorganised sector for Year 2004-2005 as recorded by National Commission for Enterprises in the Unorganised Sector’s (NCEUS) (in Rs.Ten million)

Economic activities Contribution to GVA by Informal sector Total GVA Share of informal sector percent
Agriculture 506990 536629 94.48
Mining 15204 84464 18.00
Manufacturing 123859 461531 26.84
Electricity, Gas & Water 1818 60607 3.00
Construction 86024 185669 46.33
Hotels & Restaurants 20211 39781 50.80
Transport & Storage 111220 250214 44.45
Banking, Finance & Insurance 15588 167831 9.29
Education 13145 106580 12.33
Total 1426218 2855934 49.94

The welfare projects

The government has set up welfare funds to provide social security measures to certain categories of workers such as the beedi workers. It has also provided for the educational assistance for children, drinking water supply and more. In 50 districts of the country the government has launched a Krishi ShramikSamajikSuraksha (KSSS) Yojna in July 2001, on pilot basis, through the Life Insurance Corporation (LIC) for agricultural workers. The scheme envisaged benefits and pension. A worker was required to pay Rs 1. Per day while contribution of the government was Rs 2 per day per worker. As reported by LIC, 2,53,168 agricultural workers have been registered up till the month of March in the 2003. However, due to paucity of funds, no new enrolments have been made thereafter.

The government has also launched the unorganised Sector Workers’ Social Security Scheme, in January 2004, again on a pilot basis in 50 districts. The benefits included health insurance, personal accident insurance cover, and old age pension. About 3500 unorganised workers had been covered under the scheme. However, the scheme was not found viable as it had no statutory backing, was voluntary in nature and contribution from employers was not forthcoming. The scheme went on to be reworked after that. In addition to the above the Indian Government is attempting to implement various poverty alleviation and employment generation schemes soon.

Further, the government has started the National Family Benefit Scheme where an amount of 1000 is given to the bereaved household if there occurs the sudden death of the sole breadwinner irrespective of the cause of the death. The number of beneficiaries in this scheme was 1,75,592 as of 2015.

Janani Suraksha Yojana (JSY) is an Indian Government scheme for the mothers of the country. It comes a National Rural Health Mission (NHM). This scheme’s objective was reducing the mortality rate of women while childbirth by encouraging institutional kind of delivery among the underprivileged pregnant women. This scheme was launched in the year of 2005 and was an upgraded version of the National Maternity Benefit Scheme (NMBS). NHM has a number of 1,04,16,164 beneficiaries according to their latest update until the year of 2016.

Constituting commissions only helps the government in delaying things and shirking its responsibility. The workforce in the unorganised sector is living at the mercy of the unscrupulous employers as the government remains a silent spectator. The schemes may be perfect but the will to implement them is still lacking.

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