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Unorganized Workers In India

Unorganized Workers In India

Why in news?

  • The Supreme Court of India (SC) has directed the Central Government and the State Governments to complete the registration process of unorganized workers so that they can avail the welfare benefits given under various government schemes.
  • 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.

SC’s Observations

  • Common National Database:
    • There should be a common national database for all organised workers situated in different states.
    • The process initiated by the Ministry of Labour and Employment for creating a National Database for Unorganised Workers should be completed with collaboration and coordination of the States.
    • It may serve registration for extending different schemes by the States and Center.
  • Record of Migrant Workers:
    • SC asked states and Union territories to keep a record of the returning migrant labourers, including details about their skills, place of their earlier employment, etc so that the administration can extend necessary help to them.
  • Dry Ration to Stranded Workers:
    • The stranded migrant workers throughout the country should be provided dry ration under the AtmaNirbhar Bharat Scheme or any other scheme found suitable by the Centre and the states.
  • Mechanism for Supervision:
    • There should be a suitable mechanism to monitor and supervise whether the benefits of the welfare schemes reach the beneficiaries which may be from grassroot levels to higher authorities with names and places of beneficiaries.

What Is Unorganized Sector?

  • The term unorganised sector was defined by National Commission for Enterprises in the Unorganised Sector, in their Report on Conditions of Work and Promotion of Livelihoods in the Unorganised Sector
  • Unorganized sector consists of all unincorporated private enterprises owned by individuals or households engaged in the sale or production of goods and services operated on a proprietary or partnership basis and with less than ten total workers.

Characteristic Features Of Unorganized Sector

  • Ease of entry
  • Smaller scale of operation
  • Local ownership
  • Uncertain legal status
  • Labour-intensive and operating using lower technology based methods
  • Flexible pricing
  • Less sophisticated packing
  • Absence of a brand name
  • Unavailability of good storage facilities and an effective distribution network
  • Inadequate access to government schemes
  • Finance and government aid
  • Lower entry barriers for employees,
  • A higher proportion of migrants with a lower rate of compensation

Categories Of Unorganized Workers In India

  • Under Terms of Occupation:
    • Small and marginal farmers, landless agricultural labourers, share croppers, fishermen, those engaged in animal husbandry, beedi rolling, labelling and packing, building and construction workers, leather workers, weavers, artisans, salt workers, workers in brick kilns and stone quarries, workers in saw mills, oil mills, etc. come under this category.
  • Under Terms of Nature of Employment:
    • Attached agricultural labourers, bonded labourers, migrant workers, contract and casual labourers come under this category.
  • Under Terms of Specially Distressed Category:
    • Toddy tappers, scavengers, carriers of head loads, drivers of animal driven vehicles, loaders and unloaders come under this category.
  • Under Terms of Service Category:
    • Midwives, domestic workers, fishermen and women, barbers, vegetable and fruit vendors, newspaper vendors, etc., belong to this category.

Government Initiatives

  • Labour Codes: Labour Codes aims at simplification, amalgamation and rationalisation of Central Labour Laws. Currently, there are about 44 central labour laws and over 100 state labour laws. The labour ministry has taken steps to codify the existing central labour laws into four codes:
  • Labour Codes on wages Bill, 2019: It seeks to consolidate laws relating to wages by replacing- Payment of Wages Act, 1936; Minimum Wages Act, 1948; Payment of Bonus Act, 1965 and Equal Remuneration Act, 1976.
  • Labour Code on Industrial relations, 2019: It aims to create greater labour market flexibility and discipline in labour – to improve upon ease of doing business and also to encourage entrepreneurs to engage in labour-intensive sectors.          Unorganized Workers In India
  • It would replace three laws i.e. Trade Unions Act, 1926; Industrial Employment (Standing Orders) Act, 1946 and the Industrial Disputes Act, 1947.
  • Labour Code on Social Security & Welfare, 2017: Almost 90% of the current workers are not covered under any social security. The Code aims to provide social security.
  • Labour Code on Occupational Safety, Health and Working Condition of Workers seeks to regulate health and safety conditions of workers in establishments with 10 or more workers, and in all mines and docks.

Significance Of Informal Sector

  • In India, the informal sector generates income-earning opportunities for a large number of people and contributes a sizeable portion of the country’s net domestic product.
  • The sector plays a vital role in providing employment opportunity to a large segment of the working force and contributes to the national product significantly.
  • The share of the formal sector is around 12 -14 percent in our national income while that of the informal sector is more than 30 percent.            Unorganized Workers In India
  • The informal forms of organizations are major players in such activities as manufacturing, construction, transport, trade, hotels and restaurants, and business and personal services.
  • Moreover, the sector plays a significant role in the economy regarding employment opportunities and poverty alleviation.


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