UNORGANISED SECTOR AND THE ISSUE OF EMPLOYMENT IN INDIA-AN OVERVIEW

Abstract

The predominance of informal employment has been one of the central features of the labour market scenario in India. While the sector contributes around half of the GDP of the county, its dominance in the employment front is such that more than 90 percent of the total workforce has been engaged in the informal economy. The unorganised sector in India includes workers employed in various informal activities such as agriculture, construction, domestic work, small and micro-enterprises, and street vending, among others. These workers do not have access to formal employment benefits, social security, or legal protections, making them vulnerable to exploitation and poverty. Among the unorganized sector workers, a considerable proportion (about 65 per cent) is engaged in the agricultural sector, which in turn indicates the prominence of the rural segment in the informal economy. This paper attempts to analyse the status of the unorganised sector and its employment in India. The growth of formal employment in the country has always been less than that of total employment, indicating a faster employment growth in the informal sector. Available data suggest that within the formal sector also the proportion of informal/unorganized workers is on the increase. However, since 2017 onwards, the labour market of India has been witnessing a mild decreasing trend in the informalisation process which may be due to the introduction of GST, digitization of payments, direct benefit transfer of subsidies/scholarships, wages and salaries to bank accounts, opening of Jan Dhan accounts and extending social security coverage to more workers.