Protecting the Vulnerable

MANTHAN

Providing social welfare to informal sector workers

Organizing the unorganized - A radical approach to development

TEAM DETAILS

ADITYA BANDI BHAWNA MEHTA SANKALP VERMANAVNEET JAIN MANPREET SINGH

92 percent of the 317 million workforce is employed in the Unorganized Sector

DEFINITION

The unorganized sector is defined by manystatutes and laws as an enterprise owned byindividuals or self employed workers or anenterprise employing the workers thenumber for which is less than ten.

FACTS & FORECASTS

• In 2012, India’s unorganized sectorcreated 62 percent of the GrossDomestic Product, 50 percent of theGross National Savings and 40 percent ofthe National Exports.

• The backbone of Indian economy, theagricultural sector has 99.42% of peopleemployed in unorganised sector.

• The manufacturing and service sectorcontributes 81% and 73% respectively tothe total workforce employed in informalsector.

• It is expected that with current economicscenario the share of informal sector willbe maintained at around 93.6 % by2016-17

98% 95% 93% 92%

49%

28%

12%

Personal service activities

Communications Sanitation Transportation & railway

Freight & cargo Education & training

Computer technology

Share of unorganized sector –Service Industry (2006)

98%94% 92% 90%

19% 18%13%

Wood and wood products

Furniture Wearing apparel

Tobacco products

Basic metals Electronics & Communication

Accounting and computing

Share of unorganized sector -Manufacturing Industry (2005)

Source: Sector Analysis Ejaz Ghani

Source: Sector Analysis Ejaz Ghani

2.5 2.6

6.6

8.68 8.91

0

2

4

6

8

10

2006-07 2007-08 2008-09 2009-10 2010-11

Total Outlay (In $ billion)

Govt. has implemented Acts and Schemes in the past to protect the unorganized sector

MNREGA, 2005

Unorganized Workers Social Security Act, 2005

•100 days guaranteed employment• Statutory wage of Rs.120 per day

• Undertaking of issues like housing, education etc.• Clear demarcation of responsibilities of state and

centre

Yearly outlay of MNREGA

Non-coverage of complete unorganized sector

More directed towards welfare of the poor rather than welfare of unorganized

No stress to transfer to the organized

No clear demarcation of the roles of the State Govt. and the Central government in implementing the schemes

SHORTCOMINGS/LIMITATIONS OF THE STEPS TAKEN

Source: www.nrega.nic.in

Considering the above limitations we propose a radical solution to the problem. There is a need to tap this vast potential of Informal sector which can be achieved only through organizing the sector.

Non-homogeneity of the presence of Unorganized in different sectors leads to different social security needs

• Workers employed in a wide range of economic activities ranging from street vendors, casual workers in a tea shop, beedi workers to contract laborers in a factory

• Different economic activities at different levels of technology and productivity and thus require different levels of wages

• Affordability and the paying capacity of the employers (depending upon different sectors) is also a determining factor of social security needs

CONSTRUCTION WORKER UNION

LIFE SECURITY

Employment securityHousing security

FOOD SECURITY

HOME BASED WORKER

OLD AGE SECURITY

Health security Accident security

GENERATE DATABASE

OF UNORGANIZED

SECTOR BY LINKING IT

TO UID

The broad level policy framework to meet the needs for all the different sectors within the ambit of

unorganised sector.

Digitalised data which is easy to analyse and manage Resolve the problem of shadow and bogus ration cards faced presently by

the PDS to avoid duplication

BUILD MULTI-

ORGANIZATIONAL

FRAMEWORK

Different organizations such as trade unions, co-operatives, associations, NGOs and labour boards will be used to mobilize and help unorganized sector

LINK LOCAL LEVEL

ORGANIZATIONS TO

WELFARE POLICIES

Transfer of benefits and funds from state to the organizations Maintain and report the accounts of the welfare services to the

government

Periodic evaluation of the performance gap Based on experience and feedback introduce the requisite modifications

PERIODIC EVALUATION

AND SUITABLE

MODIFICATIONS

Create an independent and participative functional body, freefrom bureaucratic limitations to assist the government in its visionof organizing the unorganized : “SANGATHAN”

FRAMEWORK RESPONSIBILITIES IMPLEMENTATION

• "Organizing the unorganized" being

proposed as a state prerogative, appointed

by state

• Volunteer size will depend upon the

economic scenario of the District/

Village/State varying from 20 to 50

• Sangathan will be a constitution of mainly

intellectual youth of India like professionals

and MBA graduates

• Representation from unions, co-

operatives, employers, NGO’s will be there

Interns and volunteers

Professional Bodies eg. ICAI, ICWA etc..

Managerial employees

Trade Unions, Association

s, Co-operatives, Welfar

e funds, NGOs MBA graduates

Public Service commission

officers

Researchers & Field Experts

FRAMEWORK RESPONSIBILITIES IMPLEMENTATION

• Identifying the priority informal sector in the area of operation

• Creating awareness about various policy reforms of the government, existing and as per the

solution proposed

• Encouraging informal workers to join existing Trade Unions or Co -operative societies or to

form one in case not present in that district

• Facilitate formation of such local bodies and ensuring their registration with the government

which make them eligible for all the benefits of the governmental policies and schemes

• Settling disputes between employers or employees or Local bodies

• Ensuring the workers get full benefit of the schemes and policies designed for them

• Measuring and evaluating the performance of local bodies and conducting performance audits

Create an independent and participative functional body, freefrom bureaucratic limitations to assist the government in its visionof organizing the unorganized : “SANGATHAN”

FRAMEWORK RESPONSIBILITIES IMPLEMENTATION

Monitoring, performance evaluation and regular assistance

Proper representation in the policy framework and regular assistance

Create or facilitate creation of priority Local Bodies

Educate , encourage about the benefits of formalization

Sangathan will identify the focus informal sector in the district

Create an independent and participative functional body, freefrom bureaucratic limitations to assist the government in its visionof organizing the unorganized : “SANGATHAN”

Expenditure Revenue

Sangathan contributes ₹150 Cr to the corpus of Government with just ₹1 per worker

The revenue generation (assumptions)

• Insignificant charges taken from workers

• Workforce targeted to be 5% of the total informal

• Minimum 100 days employment to be given. ₹1 to be charged for each day of employment

Challenges of the solution proposed

• FundingGenerating the requisite monetary resources for providing the securities to the workers

• Parallel policiesCertain existing policies will deteriorate the penetration of the suggested policy

Establishment of formal structure and guidelines for local organizations

Setting up sector specific guidelines for establishment, election and allocation purposes of locallevel organizations

• Resistance from employersWith the increase in worker unions employers might face operational hardships which maybecome a reason for their resistance

• Recognition of “Sangathan”Various actors like workers, employers, NGOs might not recognize the autonomy of Sangathan asan independent body. It will face a huge task of marketing itself and garnering confidence of theabove mentioned

References

• Planning commission report on unorganized sector 2003

• Article: The Exceptional Persistence of India’s Unorganized Sector by Ejaz Ghani

• Unorganized Workers Social Security Act, 2008

• Perspectives of Unorganized Labor by A S Oberai

• MPRA_Paper_9247

• www.jstor.org

• Paper on “Organisations working for the unorganised labour” by S K G Sundaram

• www.sewa.org