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Conditions of Work and Promotion of Livelihoods in the Unorganised Sector

Sep 14, 2007

This article examines the Commission's Report in the light of the prevailing conditions in the unorganised sector, the proposals of the present government articulated in its Common Minimum Programme and the national and international directives and commitments on ensuring decent conditions of work, minimum wages, promoting employment and enterprise in the unorganised sector.

The article is intended to draw attention to the relevance of the issue, as borne out by the sheer numbers of informal workers, the pivotal role of the unorganised sector in employment generation and the economy, and the primacy accorded to the issue in the current planning process. It also discusses the relevant concerns with reference to the recommendations being made by the Commission.

These suggestions and proposals come at a time of widespread agitation from a number of quarters calling the present government to account, for meeting the promises made in the Common Minimum Programme. There are also demands by non-governmental organisations, trade unions and individuals to ensure that the requisite legislative processes be undertaken immediately.

The pervasiveness of the problems that hound the unorganised sector, the tendency to delayed response and implementation, and the existence of cross-cutting concerns and problems have laid the ground for further debate and dialogue on the set of issues.

The NCEUS report supplements earlier submissions to the Prime Minister pertaining to national minimum social security for unorganised workers, and measures for regulation of minimum conditions of work in the agricultural and non-agricultural sectors. In addition to elaborating upon the recommendations on minimum conditions of work the Commission has also undertaken to examine issues related to the enhancement of employment, incomes and livelihoods in the unorganised sector, and recommended an Action Programme for immediate implementation.

The unorganised sector accounts for 395 million or 86 per cent of a total employment of 457 million, in agricultural (253 million) and non-agricultural sectors as on January 2005. In addition, the Commission estimates 28 million informal workers in the organised sector as well, bringing the total number of unorganised or informal workers to 423 million. (1)

The net increase in the level of employment in the organised sector from 397 million in 1999-2000 to 457 million in 2004-05 was also entirely accounted for by an increase in the number of informal workers in the organised sector by 8.6 million (from 20.5 million to 29.1 million). The entire universe of informal workers then constitutes more than 92 per cent of the work force.

The Constitution of India has recognised the link between decent conditions of work and the promotion of enterprises in the unorganised sector, emphasising the goals of just and humane conditions of work and conditions of work ensuring a decent life. The State and its Government is charged with the end of provisioning a minimum wage as well as promoting "cottage industries on an individual or cooperative basis."

The international community is also committed to minimum conditions of work for all workers, which has been translated into enforceable legislation by a large number of countries. There is also now a shift to voluntary codes of conduct and their enforcement through third party inspection, the success of which however depends upon the extent to the State's capacity to regulate the conditions of work for their workers.

The present government in its Common Minimum Programme or CMP (announced May 2004) that emphasised sustained economic growth, employment generation, empowerment and equal opportunity, along with a platform for entrepreneurship for the marginalised and the disadvantaged, had also undertaken "to enhance the welfare and wellbeing of farmers, farm labour and workers, particularly those in the unorganised sector and assure a secure future for their families in every respect." (2) The Planning Commission in the Eleventh Five-Year Plan has acknowledged that the burden of employment creation now rests with the unorganised sector, along with the need to increase labour productivity.

The present report highlights the gap between present realities and the explicit and inherent promise of the government and the governance framework pertaining to labour and employment conditions and standards.

The informal worker in the organised and unorganised sector is characterised by the continued slide into further poverty, with restricted or poor access to education, land and resources, and working under extremely poor conditions vis-Ã -vis space, ventilation, temperature, lighting, hygiene and cleanliness. The agricultural worker (largely in the unorganised sector) represents an extremely impoverished and vulnerable group, with agricultural labourers worse off than the farmers. The farmers in their turn have been badly hit by the increased indebtedness.

There are further gradations of vulnerability guided by gender, socio-religious identity and other disadvantages in both the agricultural and non-agricultural sector. For instance, women workers face inherent disadvantages and systematic discrimination, especially when gender is coupled with lower social and educational status.

Poverty ratios are highest within the social groups of the Scheduled Castes and Tribes among the Hindus and the Other Backward Classes among the Muslims. Other vulnerable groups include migrant labour, bonded labour, and children.

Even using normative standards for minimum wages, for instance Rs.66 as recommended by the Ministry of Labour, it appears that more than 85 per cent of all rural workers are paid wages lower than this standard (with more women constituting this percentage). Self employed non-agricultural workers in 47 per cent of rural enterprises and 29 per cent of urban enterprises are similarly situated.

Overall wage levels in the agricultural sector have been low, with a low growth rate, coupled with uncertainty of employment. Using a cut-off wage rate of Rs.45, the report notes that in 1999-2000, 76 per cent of agricultural workers received wages lower than the identified standard.

The situation is compounded by the lack of a comprehensive and integrated legislative and regulatory framework. The legislation for and regulation of the unorganised sector had so far been piecemeal, and does not clearly distinguish between the different segments of workers.

In order realise the employment and productive potential of the unorganised sector and the informal or unorganised workers, to meet the universal standards for decent conditions of work, and fulfil national commitments to this and related ends such as securing minimum wages, social security, and boost to enterprise, the current realities of the sector require thoroughgoing attention.

The effective and timely implementation of government programmes in the areas of rural employment (National Rural Employment Guarantee Act), rural health (National Rural Health Mission), education for all (Sarva Shiksha Abhiyaan), and rural development (Bharat Nirman) could provide a stable base for securing the unorganised sector.

At the same time, interventions in terms of credit at various levels, enterprise development strategies (e.g. growth poles, or clustering of cluster with the provision of common infrastructure, service centres, etc. as piloted by the Commmission), asset creation or land distribution, skill enhancement, and poverty alleviation, employment expansion and rural development are required.

The Commission had drafted two bills to regulate the conditions of unorganised workers and also offered an Action Programme for the unorganised sector, which focus upon prescribing minimum conditions of work (against discrimination and harassment, ensuring fair and timely wages, balancing work and rest etc.,) and the introduction of a minimum social security (health benefits, life and disability insurance, old age security, etc.), with the scheme to be implemented within the next five years.

The Action Plan encompasses protective measures for workers (including minimum conditions of work and social security), measures for marginal and small farmers (including debt relief), improving growth of the non-agricultural sector (through credit facilities, livelihood promotion, appropriate funding, up-scaling cluster development), and expanding employment and improving employability (through self-employment generation programmes, rural employment guarantee, skill development).

(1) The report has adopted a definition of the unorganised sector and a broader definition of the unorganised or informal worker:
"The unorganised sector consists of all unincorporated private enterprises owned by individuals or households engaged in sale and production of goods and services operated on a proprietary or partnership basis and with less than ten total workers."
"Unorganised workers consist of those working in the unorganised sector or households, excluding regular workers with social security benefits, and the workers in the formal sector without any employment and social security benefits provided by the employers."

(2) The National Commission for Enterprises was established as a follow up to the CMP, to examine problems facing enterprises in the unorganised, informal sector, and make appropriate recommendations to provide technical, marketing and credit support to these enterprises. The Commission's mandate requires it to examine, among other issues, measures necessary for bringing about improvement in the productivity of enterprises and generation of large-scale employment opportunities; labour laws in the informal sector, consistent with labour rights; and expansion in the social security system available for labour in the informal sector.

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