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SOCIAL WELFARE SCHEMES FOR
INFORMAL SECTOR WORKERS
Fata Ram, Gunjan Jena, Priytosh Singh,
Shubham Kaul, Vishank Menon
National Law School of India University, Bangalore
“An enterprise owned by individuals or self-employed workers and engaged in the production or
sale of goods or providing service of any kind whatsoever, and where the enterprise employs
workers, the number of such workers is less than ten.” -
Section 2(l), The Unorganized Workers’ Social
Security Act, 2008
Informal Sector workmen constitute more than 90% of the total workforce in India and about 50%
of total GDP. The percentage of unorganized sector labour in various areas is given in the following
Tabulation Category Share of Unorganized Sector
1. Agriculture & Forestry 99.9 %
2. Fishing 98.7 %
3. Mining 64.4 %
4. Manufacturing 87.7 %
5. Electricity, Gas & Water Supply 12.4 %
6. Construction 92.4 %
7. Wholesale & Retail Trade 98.3 %
8. Hotel & Restaurants 96.7 %
9. Transport, Storage & Communication 82.2 %
Share of Labour Input in Unorganized Sector(2004-05)
PROBLEMS NEEDS TO BE ADDRESSED
•The informal industries are not identified and listed which
makes it difficult for the Government to make welfare
schemes for the informal sector workers.
•Social security is not defined in the Social Security
Act,2008. The provisions prescribed in the Act themselves
are not universally applicable.
•There is no universal minimum wages mentioned in the
Act. No recognition to nature of works while fixing the
•Basic minimum working conditions are not prescribed.
Working conditions are not differentiated according to the
seriousness and hazardness of work in different sectors.
•Basic minimum health measures are not implemented.
There is need of specific attention towards health in case
of more hazards work. Special attention for the health of
children of informal workers is not given.
•Discrimination in salaries and other benefits on gender
basis. No proper mechanism is given to address the
discrimination at work place.
The basic problem with informal sector is that the workers and the industries are not legally
recognized in any manner. Hence, the first step towards solving these problems has to be providing
legal regulations to the workers.
This can be done through the Adhar Card and BPL Card under which a separate category should
be made by the State Government stating the employer and workplace of the individuals working
in the informal sector.
In addition to the workers, the owners of informal industries and the employees should also be
licensed and regulated in a formal manner. Every industry must be listed down by the State
Government for the purpose of providing and ensuring various social security welfare schemes to
Government should set mandatory targets
for social security schemes
Providing Mandatory and Exclusive
Providing Pension and Post-Retirement
Providing assistance in Children’s health,
education and recreation
Providing technical support, skill
development and training
Providing sufficient paid maternity leave
to the female workers.
Creating medical aid societies in order to
The Central Government needs to set a minimum threshold for the wages in
informal sector to be called as National Minimum Wages (NMW) and the State
Governments should have the discretion to set their minimum wages to be called
as State Minimum Wages (SMW) but it should not be less than the NMW.
•For Example:- Workers at a firework
industry, a brick kiln and a construction
labour cannot have same minimum
wages simply because of the nature of
their work. Hence, gradation should be
made in the wages at various industries
on the basis of danger involved.
The wages must be provided as per the
requirement and nature of work
performed by the workers. A
classification of the works should be
made by the State government
according to the nature of the work
and wages must be allocated to each
•To ensure the proper distribution of minimum wages
in the various informal sector industries.
•To provide grievance redressal mechanism for the
irregularities in the distribution of wages.
•To make the general public aware of such a grievance
The State Government
should appoint Inspectors
at Tehsil level who shall
be personally liable for not
disposing off the
complaints. They should
The State Government needs to limit the number of working hours in the various informal sector
industries according to the nature of work involved. For the limited number of working hours, the
workers should get atleast the minimum wages and in the non-hazardous industries, the workers
should be given hourly wages for any additional hour of work she performs.
In addition to that, the State Government should ensure the following at all the informal sector
work places :-
Cleanliness:- That the work premise should be free from any effluvium or hazardous
emissions which might arise from any drain or nuisance and to maintain the general
standards of cleanliness including white washing, painting, etc.
Ventilation:- That the work premise must maintain the general standards of lighting,
ventilation and temperature in order to prevent injury to the health of the workers. In
industries involving injurious or offensive emissions, the Inspector must ensure the effective
measures to prevent inhalation of such emissions.
Overcrowding:- That there should be proper and sufficient work space available for the
workers and the premise should not be overcrowded to such an extent that it leads to injuries
to the workers.
Drinking Water:- That the premise should have proper and sufficient supply of drinking
water conveniently available for the workers. These points of drinking water should be
labeled in the local language and it must be at a safe distance from any other washing place,
urinal or latrine.
Latrines and Urinals:- That the work place must have sufficient and separate latrines and
urinal facilities for male and female workers, conveniently situated as may be accessible to
the workers at all times. Also, the proportion of the latrines and urinals to the number of
workers needs to be maintained as prescribed by the State Government.
First Aid:- That the premise shall have sufficient and proper first aid facilities as prescribed
by the State Government.
Estimated Global work related Mortality
1.1 Million per year (Source: ILO, 1999)
For the health hazards, the State Government should ensure that the work premises have
proper health conditions and the workers are provided with sufficient and effective protective
gears like helmet, glasses, boots, respiratory mask, etc.
Also, the industries which emit out poisonous gases or other hazardous waste material must be
located far from the population.
There must be equal pay for equal work and no discrimination should be there on the basis of
gender, religion, caste, creed or color. The informal sector industries also needs to work under the
purview of Article 14 of the Constitution of India and hence, the State Government and the
Inspectors appointed by the State Government must ensure that such discrimination do not
The percentage of women workers against the men is shown below:-
The above table shows that in both rural and urban areas, the number of women workers is lower
than men. This is the result of restrictions on the mobility of the women i.e. they are not able to
move out of the domestic sphere to the workplace even if they want to.
State Government must ensure that any cases of discrimination against any individual are
addressed to and sanctions must be levied on the owners of the informal sector workplace
indulging in such discrimination.
The Government has laid down many welfare
schemes regarding the informal sector workers
but the major problem comes in the
implementation of such schemes.
We already have many legislations like
Unorganized Sector Social Security Act, 2008;
Minimum Wages Act, 1948; etc. and these
legislations are more than sufficient to provide
for proper social security measures. The only
thing required is proper implementation of these
Mechanisms like personal liability of the
inspector, sanctions on the employees, etc. should
be used to ensure the proper implementation of
National Commission for Enterprises in the Unorganized Sector
report by committee presided by Arjun Sen Gupta, May, 2006.
Employment and social protection in the informal sector report by
committee on employment and Social Policy by International Labour
Organization March, 2000.
Reports of the committee on un-organized sectors statics by National
Statistical Commission, Government of India, February, 2012.
Informal Economy: Law and Policy Demands Lessons from the
WIEGO India Pilot Study by Kamala Sankaran and Roopa Madhav ,
Unorganized Workers Social Security Act, 2008
Minimum Wages Act, 1948
Social Protection in the informal economy: Home based women
workers and outsourced manufaturing in Asia by UNICEF January,
Globalization and informal sector in developing countries :A joint
study of the International Labour Office and the Secretariat of the
World Trade Organization, 2009.
Gender bias in Indian Industries, by Journals of Industrial statics,