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  1. 1. 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 VERMA NAVNEET JAIN MANPREET SINGH
  2. 2. 92 percent of the 317 million workforce is employed in the Unorganized Sector DEFINITION The unorganized sector is defined by many statutes and laws as an enterprise owned by individuals or self employed workers or an enterprise employing the workers the number for which is less than ten. FACTS & FORECASTS • In 2012, India’s unorganized sector created 62 percent of the Gross Domestic Product, 50 percent of the Gross National Savings and 40 percent of the National Exports. • The backbone of Indian economy, the agricultural sector has 99.42% of people employed in unorganised sector. • The manufacturing and service sector contributes 81% and 73% respectively to the total workforce employed in informal sector. • It is expected that with current economic scenario the share of informal sector will be maintained at around 93.6 % by 2016-17 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
  3. 3. 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: 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.
  4. 4. 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
  5. 5. 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
  6. 6. Create an independent and participative functional body, free from bureaucratic limitations to assist the government in its vision of 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
  7. 7. 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, free from bureaucratic limitations to assist the government in its vision of organizing the unorganized : “SANGATHAN”
  8. 8. 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, free from bureaucratic limitations to assist the government in its vision of organizing the unorganized : “SANGATHAN”
  9. 9. 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
  10. 10. Challenges of the solution proposed • Funding Generating the requisite monetary resources for providing the securities to the workers • Parallel policies Certain 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 local level organizations • Resistance from employers With the increase in worker unions employers might face operational hardships which may become a reason for their resistance • Recognition of “Sangathan” Various actors like workers, employers, NGOs might not recognize the autonomy of Sangathan as an independent body. It will face a huge task of marketing itself and garnering confidence of the above mentioned
  11. 11. 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 • • Paper on “Organisations working for the unorganised labour” by S K G Sundaram •