ISSUES AND CHALLENGES OF EMPLOYMENT IN
UNORGANIZED SECTORS
Abstract:
Informal sector is referred to as the unorganized sector. This sector broadly corresponds to the household sector including private unincorporated enterprises. The unorganized sector also includes some formal activities on which there is no regular system of data availability. However, 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, the fact remains that it has emerged as a dynamic and vibrant sector, representing a growing proportion of economic activity, particularly in the developing countries. This sector broadly corresponds to the household sector including private unincorporated enterprises. The unorganized sector also includes some formal activities on which there is no regular system of data availability. The Government of India set-up a ‘National Commission on Enterprises in the Unorganized/Informal Sector’ through a resolution dated 20th September, 2004 as an advisory body and watchdog for the informal sector. This paper is based on Issues and Challenges of employment in unorganized sectors, and it is explain about introduction of unorganized sector, Status, Issues and Challenges of employment in India, and also explained about unorganized sectors details and issues and challenges details, and the conclusion of unorganized sectors details.
INTRODUCTION
The definition of informal sector as adopted by the Fifteenth International Conference of Labour Statisticians in 1993, is regarded as a group of household enterprises or unincorporated enterprises owned by households that includes informal own-account enterprises, which may employ contributing family workers and employees on an occasional basis; and enterprises of informal employers, which employ one or more employees on a continuous basis. 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, the fact remains that it has emerged as a dynamic and vibrant sector, representing a growing proportion of economic activity, particularly in the developing countries.
In the informal sector is referred to as the unorganised sector. This sector broadly corresponds to the household sector including private unincorporated enterprises. The unorganised sector also includes some formal activities on which there is no regular system of data availability. However, 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, 2004 as an advisory body and watchdog for the informal sector. The terms of reference of the Commission included (i) the status of unorganized/informal sector in India including the nature of enterprises, their size, spread and scope, and magnitude of employment; (ii) the existing arrangements for estimating employment and unemployment in the informal sector (iii) suggest elements of an employment strategy focussing on the informal sector; (i) identify constraints faced by small enterprises with regard to freedom of carrying out the enterprise, access to raw materials, finance, skills, entrepreneurship development, infrastructure, technology and markets and suggest measures to provide institutional support and linkages to facilitate easy access to them, etc. As the Commission started functioning, the adoption of a uniform definition of un-organized/informal sector, based on the characteristics of the enterprises, became an absolute necessity for the completion of its tasks.
The first Indian National Commission on Labour (1966-69) defined the ‘unorganised sector work-force’ as “those workers who have not been able to organise themselves in pursuit of their common interest due to certain constraints like casual nature of employment, ignorance and illiteracy, small and scattered size of establishments”. On the other hand, the unorganised 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. Further, in the unorganised sector, in addition to the unincorporated proprieties or partnership enterprises, enterprises run by the cooperative societies, trusts, private and limited companies are also covered. The informal sector, therefore, can be considered as a sub-set of the unorganised sector.
STATUS, ISSUES AND CHALLENGES OF EMPLOYMENT IN INDIA
Division across sectors:
In the usually employed (‘all’ workers) category, 57 per cent among males and nearly 62 per cent among females were self-employed. The corresponding proportions in urban India were 44 per cent for males and 45 per cent for females. One needs to examine to what extent institutional finance has a role to play in the lives of those self-employed. In the rural areas, 67 per cent of usually employed males and 84 per cent of usually employed females were engaged in the agricultural sector. In rural India, the proportion of ‘all’ male workers engaged in the agricultural activities declined gradually from 81 per cent in 1977-78 to 67 per cent in 2004-05. (This may be pointing to increased migration to cities, among other causes). For all female workers, the decline was less – from 88 per cent in 1977-78 to 83 per cent in 2004-05.
In urban India, the tertiary sector engaged 59 per cent of male workers while secondary sector accounted for 35 per cent of the usually employed males. For females, the corresponding proportions were lower at 53 and 31 per cent. In urban India, the ‘trade, hotel and restaurant’ sector engaged about 28 percent of the male workers while ‘manufacturing’ and ‘services’ sectors accounted for nearly 24 and 21 percent, respectively, of the usually employed males. Quality of employment in these sectors, especially trade, hotel and restaurants is an issue of concern.
Wages (gender parity)
In rural India, on an average, per day, a male casual labourer earned Rs. 56.53, Rs. 20.38 more than a female causal labourer who earned Rs.36.15. In urban India, wage difference was more prominent. A male casual labourer in the urban areas earned Rs.75.51 in a day and female, Rs. 44.28 in a day.
Rates of employment/unemployment
93 per cent of the labour force is employed in the “unorganised sector”, i.e. sectors which don’t provide with the social security and other benefits of employment in the “organised sector.” The unemployment rate went up between 1993-94 to 2004. On the basis of current daily status (unemployed on an average in the reference week), during the reference period, unemployment rate for males increased from 5.6 per cent to 9.0 per cent in rural areas, and from 6.7 per cent to 8.1 per cent in urban areas.
Unemployment rate for females increased from 5.6 per cent in 1993-94 to 9.3 per cent in 2004 in rural areas. 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, and 55 per cent for males and 17 per cent for females in the urban areas.
The rate of growth of employment declined sharply from 2.04% per year in the period 1983-94 to only 0.98% per year in the period 19994 to 2000. This is while the labour force increases roughly by 2.5% every year.
There is substantial decline in employment elasticity (e.g. increase in employment for every unit rise in GDP) in almost all the major productive sectors, except for transport and finance. The reason for the phenomenon of jobless growth could be that growth in India has essentially been capital intensive. In any case, the share of the organized sector is too small to really make a difference. The Indian economy has also seen growth on the shoulders of a very successful services sector, which has offset slow growth in manufacturing (which could have been relied upon to generate substantial employment) and the insignificant growth rates in agriculture.
Regular employment was unavailable for many workers. This was indicated by the fact that unemployment rates on the basis of current daily status were much higher than those on the basis of usual status (unemployed on an average in the reference year).
Urban unemployment rates (current daily status) were higher than rural unemployment rates for both males and females in 1993-94. However, in 2004, rural unemployment rates for males was higher than that of urban males. Again, it is important to look at quality of employment in urban areas. Unemployment rates varied sharply across States. States, where wages are higher than in neighbouring ones because of strong bargains or social security provisions, such as high minimum wage, had high incidence of unemployment, in general.
In the rural areas, for every 1000 households, about 17 households reported that at least one male member had got the work in public works, whereas only 8 households reported that at least one female member had got the work in public works for at least 60 days during the last 365 days. Among the social groups, the incidence is found to be highest for the STs, followed by the SCs and OBCs. This may be considered in the implementation of schemes like the NREGS.
UNORGANISED SECTORS
1. Agriculture, forestry, fishing and mining : Issues and Challenges
