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Protecting the vulnerable: Providing
social welfare to Informal Sector
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90 % of India‟s workforce belongs to Informal Sector. It is said that most of them does not have the social protection; it is expected that they
take their own case. They are usually not secured by any social security protection. It is that part of an economy that is not taxed, monitored by
any form of government, or included in any gross national product (GNP), unlike the formal economy.
The challenge is to provide a comprehensive solution to account for the social welfare of the whole unorganized sector contributing more than
half to the total national products.
Scope of the broad problem:
1. Most of the Indian workforce comes under unorganized category. Uplifting them socially may result in a huge increase in the totally
productivity of the nation.
2. The problem of CHILD LABOUR may be eradicated if we work for a comprehensive social welfare scheme for unorganized sector
3. Providing better social security may result in decreasing number of Industrial hazards and their impacts on the labourers.
4. Increasing incorporation of technology into governance may result in regulation of the whole unorganized sector , thus avoiding the
increasing exploitation in unorganized sector.
5. Unorganized sector acts as basic input source for most of the other sectors. Boost in its output will enhance the Indian markets which in
turn will attract more FII and FDI, and hence, enhance economic growth . This will create a competitive environment in Indian markets,
which is the key necessity for progress.
6. The informal sector is not formally taxed, so usually entrepreneurs who are liable to pay tax usually evade .
Causes of the problem:
1. Illiteracy & Ignorance( lack of awareness).
2. Ample availability of cheap labour and fewer employment sources to match with.
3. Underestimating self-worth because of having no prior training in their field.
4. Small establishments with dominating employers.
5. Absence of any effective regulatory body at grass-root level to monitor their conditions.
Reasons for selecting a specific cause :
1. No or improper regulation of wages, overtime, leaves lead to exploitation without someone to claim their responsibility.
2. No Health Insurance and safety from any accidental or other hazards.
3. Poorly skilled labour force provide low productivity leading to poor competence and not-so-good economic output.
4. Differences in payment and treatment on gender and age basis.
Intellectuals solve problems,
geniuses prevent them.
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We introduce a comprehensive scheme with the concept of SEVAK (as the name suggests TO SERVE). It will be a committee of people at the
tehsil level to look-after the needs of the unorganized sector workers in that particular tehsil. As we move up, there will be subsequent higher
bodies to smoothly supervise the system, like state and national boards.
The main purpose of this composition is that the exam-qualified members (Graduation as
the minimum qualification and knowledge of relevant Computer Course) can deal with
all the paper and other regulatory work, while the other experienced members will ,out of
his experience, assist the committee in understanding the problems of the workers in a
greater depth ,like pay regulation, relation with employers, treatment from employers, etc.
( IN ADDITION TO THIS MIN 30% OF WOMEN CANDIDATES SHOULD BE
THERE AMONGST THOSE TAKEN FROM EXAM.)
Each SEVAK committee will be provided with a set of computers and an Online Network to work on so that all data is electronically recorded
and can be conveniently transferred to the next level and interchanged among various parallel working SEVAK‟s for effective implementation
of proposed schemes . This will not only help in organizing the Informal sector but will also create jobs for many people who tend to enter
unorganized sector as labour or worker in spite of having educational qualification.
The District Collector will have all the rights to take any suitable action against any member of the SEVAK committee , if any complain is filed
against the same and after a fair investigation found guilty.
Each unorganized sector worker will be provided with a „Wage Book‟- VETAN PUSTAK. This will help in maintaining a proper record of the
working and pay-details of all the workers, which will later be stored on a database and thus will get a comprehensive nation-wide data for all
the workers. This will also ensure a regulation in wages, as well as avoid discrepancy based on region, caste, gender or age. Also, it will be the
More than 800 20 15 + 5
800 > __ > 300 15 11 + 4
Less than 300 10 7 + 3
SEVAK Committee tasks and duties:
-To ensure that every registered unorganized worker under them should be made aware about his rights.
-To ensure that unorganized sector should not be exploited and is provided with proper working conditions.
-To eradicate discrimination on any basis( age, gender, caste, religion).
-To make workers aware about their work quality in such a way that they help the nation and ultimately themselves, to develop by increasing
-To arrange TRAINING CAMPS for those sectors which require prior training and knowledge.
-To ensure women empowerment and equality at local levels.
-To make the workers aware of using their „Wage book‟ properly, and report the SEVAK of any problem in the manner prescribed in the
- To ensure that any person related to unorganized sector in not under 14 years of age.
To accomplish these tasks SEVAK will be given some powers like cancellation of CARD or to inform respective bodies to act according to
duty of the worker to regularly maintain his wage-book with authentic entries ,failing of which will not only result in freeing
SEVAK from his responsibility, but also making him liable from registration-cancellation.
The collected data ( by SEVAK) will be stored electronically in the form a nation-wise database, which will be accessible to all the SEVAKS
throughout the country. This will make the system work faster and more efficiently, as well as transfer/Manipulation/ upgradation /retrieval of
data will become easier.
Each member belonging to the unorganized sector will be given a unique CARD .This will enable a systematic recording and tracking of his
SEVAK committee can also assist the Income Tax department to prevent tax evasion in the unorganized sector through its online system of
complaining .This can help us in keeping a track of sources and extent of tax evasion.
These all the problems we have tried to rectify in our mechanism. The foremost of which is setting of the regulatory bodies. Unlike the earlier
law which dealt with Social Security on a stand alone basis, we have integrated it with the other problems like wage regulation, condition of
workers, etc. Proper involvement of the representatives of the unorganized sector at all levels is also intended to be provided.
No contribution in any financial form from workers is required, just their awareness about their rights and duties, and their proper interaction
with SEVAK and proper filling of Wage Book is required.
We have tried to address all the problems mentioned earlier, in our solution, and synthesize a hierarchical mechanism, with
minimal scopes for corruption. The existing provisions have so far has not been very successful in eradicating the problems. The most
recent acts , significantly “Non-Organized Workers Social Security Act, 2008”, consists of several shortcomings, a few of which are
1. The term „ Social security‟ is ambiguous. It is not properly defined in law.
2. The act proposed setting of regulatory bodies at all levels, which was never effectively implemented.
3. Most of the welfare schemes deals with only BPL unorganized sector workers.
4. Act has a provision for the unorganized sector workers to avail benefits on payment of a certain contribution only, which many fail to do.
5. Law does no deal with issues of employment, its regulation, wages, and condition of workers. It deals with Social Security on a stand alone
6. No involvement of Trade unions.
7. The unorganized sector limit is set up to maximum 10 people working in a firm, and the Factory acts consideration begins with a minimum
19, so between 10 to 19 there are no provisions and thus a confusing state exists.(The unorganised manufacturing survey had covered
many enterprises larger than the widely accepted cut off point of under 10 workers. At the same time, it is known that the Annual Survey of
Industries (ASI), which uses a different sample frame, fails to capture many enterprises, particularly those employing between 10 and 20
(Used as a separating slide, do not count)
Central Government: The main governing body of the country .
National unorganized Sector Welfare Board (NUSWB) : It consists of the following
1. Union Minister for labour and Employment, Chairman
2. Secretary , Ministry for labour and Employment, Secretary
3. Director, Social Security, Ministry for labour and Employment, Member
4. Director, Industrial Safety and Health, Ministry for labour and Employment,
5. 35 intellectual people with good experience in the field, one from each state,
-The selection of these intellectual people will be done by a panel of 5
members, with the Secretary of PM as its chairperson, and 4 SC judges as members.
State unorganized Sector Welfare Board : ( Same as State Social Security Board ,
unorganized Workers Social Security Act, 2008, chapter IV) 
Division: The divisional head will monitor the welfare activities in his division. There
will be a few IT professionals working as Data Manipulators, working parallel for
recording the data of the concerned division electronically for further retrieval.
District : The district Collector( IAS) will look into the functioning of „SEVAKS‟ at
Tehsil level, and will have powers to take any suitable action if complained to.
Tehsil : The actual level of action for the social welfare workers-SEVAK.
This committee consists of 13 members at the Tehsil level. Members will be called
„SEVAKs‟ .the composition would be:
1. A State Govt. Gazetted Officer to supervise the functioning of the committee,
2. A person with ample experience in the unorganized sector( to be nominated by the
3. 11 Members ( recruited by a professional exam on Tehsil level and with minimum
Our innovation fully leverages the existing governing system. We have introduces some members and systems in the existing hierarchy to
make it more transparent, corruption free, efficient and down to grass root level so that it deeply impacts.
Newly Introduced systems/ already existing system, used profoundly in our system as:
- 35 intellectual member each from state in NUSWB
- SEVAK committee ( Having 20/ 15/ 10 members of 2 type; one with graduation as minimum qualification and knowledge of relevant
Computer Course other having minimum 30 years of experience) in informal sector according to population density of district.
- Wage Book ( VETAN PUSTAK)
- Card for each worker in unorganized Sector ( Later Stages include Electronic cards for employer, employee, and distributor/ salesman)
- Registration of every worker on an ONLLINE NETWORK
- Training camps for sectors which require more skilled workers, especially for newly recruited ones.
- IT professionals to manipulate and store data for improvement, policy making and retrieval in future.
Starting from SEVAK, which is the key feature for our social welfare mechanism has certain duties and tasks as mentioned in solution.
Steps in Implementation Process:
• All the people related to unorganized sector should have a card (existing UID card can be an option) having its details and a specific no
to entitle his identity.
• An unorganized sector worker/employee should register himself/herself with his local „SEVAK‟ initially or after issuing of card.
Hereafter SEVAK will deal with all the issues concerned with them.
• Registration will provide him a Wage Book- „VETAN PUSTAK‟, where the employer details and salary details will be mentioned.
• There will be two kinds of employees-
i) Workers on a regular monthly basis, who will pen-down their employer details as well as salary details in it, and if quits his
job in between before the end of the month, he will have to note-down the next employer details with the date of joining and
again the salary details.
ii) Daily wage workers, who will ,on a daily basis write their employer and wage details (or whenever he/she receives wage).
• The workers who don‟t maintain their wage-book will not be the mandatory responsibility of SEVAK‟s, and the SEVAK is free to act in
this matter with his conscious.
• Employer MUST ensure that all employees under him have a CARD. If not followed severe action will be taken against him/her.
• VETAN PUSTAK will contain all the wage details of the workers whether on regular or monthly basis this will help not only help in
wage control but also in equality on any basis.
• The SEVAKs will be spread at the Tehsil level, and will closely monitor the Unorganized sector activities in the area.
• Within a limited period of time SEVAK will intimate the government to organize “Training Camps” for quality management and
productivity improvement by providing both technical and social information related to their sector(s).
• ANY person registered under any SEVAK has the right to inform and complain to the District Collector to take suitable and necessary
actions if he/she fails to fulfill his duties or is himself found guilty in violation of rules and regulations.
• All the data collected by SEVAKs, be it wages, no. of workers, child labour cases,, working hours, cases of exploitation, inequality, etc.,
will be given to the IT professionals on a termly basis.
• These IT professionals will manipulate and send a highly organize data from state to the NUSWB where members will interpret the
statistical data and form policies and acts accordingly.
• Earlier, there had been no regulation from the govt. on payment of taxes when it comes to entrepreneurs related to unorganised sector or
any other person. Our system /solution compels them socially to pay tax. The benefits generated will be for the society and the sector
itself, thus hoping to motivate people to pay their due amount of TAXES. The general benefit of the whole society, in form of
development and facilities, when upholded will compel all defaulters to pay what they need to pay and not what they wish to. Any
common person reserves the right to complain online, to SEVAK on any ground about tax-concerns .
PHASES OF IMPLEMENTATION / FUTURE PROSPECTS
NOTE: These phases can be implemented according to the availability of resources and success of the
Policy- Every person of Unorganized
sector will be have a CARD and will
be registered under SEVAK. Workers
will have VETAN PUSTAK.
Achievements- Unorganized sector
heading to become Organized, Wage
control ,Equality in pay and treatment.
Policy- To introduce role of Banks in
Unorganized sector for wages.
Achievements- Better control and
watch on wages.
Policy- Introduction of e-card and e-
machines to keep a record of its
employees and their details.
Achievements- Reduce paper work
(substitute for VETAN PUSTAK) and
the working details of all the workers.
INITIAL PHASE SECONDARY PHASE TERTIARY PHASE
Human resources at each level:
10/15/20 SEVAKs ( Qualified with a graduation and experienced)
District Collector( to supervise the work of SEVAKs in the district)
Divisional Head ( to supervise the working of various districts) IT professionals
State unorganized Sector Welfare Board (30 members)
National unorganized Sector Welfare Board (NUSWB) (35+4 members)
Total No. of districts in India - 640
Total no. of Tehsils in India - 5451
Average Population Density - 374.7/km2
Average no. of SEVAKs / Tehsil -15
Average no. of Tehsils / District - 8.517
Monthly Salary of a SEVAK(avg.) - INR 15,000
Monthly Office fund / Tehsil - INR 10,000
Initial Establishment cost / District - INR 10,00,000
Annual Expenditure / District - INR 2,40,17,940
National Annual Expenditure - INR 15371481600
Initial Establishment Expenditure - INR 640000000
Share of Unorganized Sector in India‟s GDP – about 50%
India‟s GDP - $ 1.873 Trillion [3, 4]
Sources Of Funding :
The entire expenditure is to be waived by different bodies of
the govt. so as there is no accumulated burden on anyone.
The funding structure would be something as –
This way, the entire burden an be efficiently
shared among various bodies of the govt.
Also, it is a established fact that the MLA and MP funds
are often under-utilised and lapsed. They can be uilised here.
10% Central Govt.
MP sansad nidhi
IMPACT(Used as a separating slide, do not count)
The solution we suggested, as we believe, will help in providing social
welfare to the Unorganised Sector in a far better way than the existing
system. The main outcomes expected out of our system are:
1.There would actually be regulatory bodies to look after the needs and
regulation issues at various levels for the Unorganised Sector. Also
incorporating women will not only raise their proportion in working
person‟s nos., but also will ensure a healthy interaction between the
women workers and SEVAK committee.
2.Any discrepancies in regulation of wages may be reported and
henceforth eradicated and proper work conditions for workers can be
3.Inequality in treatment and wages based on any of the grounds like
caste, religion, region , etc. may be eradicated.
4.Proper record of all the working members of the Unorganised Sector
will help in a closer watch on their problems , which will result in having
a better solution plan .
5.More employment will be created not only in form of SEVAK but also
as skilled labours.
6. Introduction of SEVAK will help in enforcement of provisions by
centralized schemes which earlier were difficult to administer.
Apart from these, bettering the social status of Unorganised sector
workers will contribute in the following ways too :
1.Better social conditions will ensure better education to their children, so
they can pursue some professional careers and not forced to follow what
their parents do for a living.
2.Better health facilities will be available to them, and so quality of life
3.By providing them proper training, we can increase their employability
as well as the overall productivity of the nation.
4.Better pay will result in less no. of malnutrition cases.
5.Making them more aware and concerned will help improve standard of
living in the country.
Thus, it will have a very wide impact on a lot many social issues/ aspects
connected to not only Unorganised Sector workers, but also to the nation
as a whole.Nation’s Progress
Indian Unorganized Sector Workforce- 90%
Contribution to GDP- 50% [3, 4]
BUT The share of informal sector in total GDP reduced by about 5.48 percentage points in aggregate between
1999-2000 and 2004-05.
Where Y- GDP; K- Capital; L- labour force; A (productivity) is the factor for technology, role of institutions
and other relevant forces which measures how productively capital and labour are used in production
F denotes a functional relationship showing how the level of aggregate economic output, Y, changes with variations in an economy's capital (K)
and labour (L) inputs .
We assume that our Solution has capability to affect all these factors positively and provide a breakthrough for existing problems thus making
the coefficients of K and L are positive; thus, increases in either or both will also increase output.
Furthermore increase in this will not only increase employment but surely will increase their Standard Of Living.
As now each worker is doing his work each efficiently and in a more productive manner FII & FDI will also have interest in hiring Indian
workforce, increase in this will not only increase employment but surely will increase their Standard Of Living.
Since K solely depends upon capital investment which in our case is unorganized sector which now will provide positive outcomes helping
the total outcome to increase significantly.
• TAX EVASIONS:
Over Rs 2,150 crore tax evasion detected by finance ministry through a unique initiative of online monitoring system of suspicious
transactions, named 'Virtual Office„. This is the amount known, actual figure would be much larger.
Since most Tax evasions occurs due to lack of compulsions of any type at grass root level, compulsion for society will act as an powerful way
to curb this problem.
Reduction in evasions will not only help in strengthening country‟s economy but also men., as they will take more active participation national
• Apart from these benefits introducing SEVAK will improve the budget expenditure efficiency and reduce corruption.
Welfare of unorganized sector will make them feel good and it’s said once
When I feel good, I do good. When I feel bad, I do bad. That’s my religion - ABRAHAM LINCOLN
Y = A f(K,L)
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Mitigation factors :
• Educating and training the workers by special training programs.
• Awareness campaign to increase participation of the labour.
• Proving higher profits statically to arrange funds from govt.
• Reducing the burden of expenditure by sharing it among various bodies of govt.
• By proving its effect on economy . Govt. Can draw a net positive balance from
•A vast majority of them do not have
fixed employer and employee
• If operational cost goes high it will
lead to poor viability.
•Govt. may not show interest in
funding this scheme
• Use of Modern technology is limited as a
large proportion of these workers is poor,
illiterate and isolated.
• Willingness of the workers to contribute
positively towards social security
• The costs involved in employing strategies
may outweigh the benefits obtained by them.
I hope that a day will come when our mind is without fear and the head is held high
LET MY COUNTRY AWAKE – Rabindranath Tagore
 - Report of the Committee on Unorganised Sector Statistics, National Statistical Commission Government of India
 - The Unorganized Workers Social Security Act, 2008; No. 33 of 2008
 - censusindia.gov.in
 - databank.worldbank.org
 - articles.economictimes.indiatimes.com/2013-08-11/news/41295773_1_due-tax-liabilities-dgcei-central-excise-