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  1. 1. Problem Coming Soon….. •By 2020 in India will constitute - a quarter of the global workforce •Around 3,00,000,000 are set to enter the employment market by 2025. •Many of them will enter the workforce in the informal sector to survive as the alternative would be to remain unemployed. Currently, there are over 10 million domestic workers in India providing services in roles such as drivers, gardeners, cooks, housekeeping staff, maintenance staff, and caregivers for infants, children and the elderly. • Further, these jobs, being informal, do not secure minimum wages, annual leave or maternity benefits 1.Lack of social security 2.Lack of health facilities 3.Improper wages 4.Discrimination based on gender 5.Improper living condition 6.Lack of financial awareness 7.Identification and classification based on work 8.Communication gap between government and informal unorganized sector Summing up current and future Challenges to be faced by Informal sector
  2. 2. Major Efforts Made By the Government of India: Minimum Wages Act, 1948 :provides for prescribing minimum wages for unskilled and skilled workers in some of the unorganized sectors. Minimum wages are revised from time to time. •Welfare funds: For some specific categories of unorganized workers like beedi makers, miners working in mines other than coal mines and for cine workers. A number of welfare measures like granting of scholarships to children of these workers and sanctioning of subsidy for construction of houses, have been taken up. •National Scheme for Welfare of Fishermen and Training and Extension :Launched in the year 1991-92 with the objective of providing basic amenities, improving life standard, to provide economic & social security and to improve the knowledge and skills of the fisherman. •National Commission for Enterprises in the Unorganized Sector 2004: To look into the problems faced by the enterprises in the unorganized or the informal sector. The Commission has submitted reports on a National Policy of Vendors, Unorganized Sector Workers Bill, Framing Legislation for minimum conditions of work and social security for unorganized workers, financing of enterprises in unorganized sector and creation of a national fund for unorganized sector. •The Unorganized Sector Social Security Act (2008): Provides for framing social security schemes for the unorganized sector as well as formation of National and State Level Boards. •National Policy on Street Vendors(2009):The objective of providing legal status, a regulated mechanism, credit facilities and civic facilities to the street vendors. The policy will serve as a model to the State Governments for enacting suitable legislations. •Among the State Governments, the Govt of Gujarat has set up Gujarat Labour Welfare Board and Cloth Markets & Shops Labour Board. These organizations are running a number of schemes for welfare of these people. Present Status •The sector is heterogeneous in nature and many of the professions still lack adequate legal regulation and protection. •Poor implementation of laws is another problem. • Minimum wages are rarely granted but the worker is forced to work for lower wages due to pressure of unemployment. Social security schemes like RSBY and AABY have helped these people to some extent but the relief under these schemes is highly inadequate. In the present scenario, providing adequate means of livelihood as well as adequate social security to all the workers in the unorganized sector is a challenge before the policy makers.
  3. 3. Increasing Employment opportunities •Proper training and skill development of unorganized sector workers should be done so that they can get proper jobs thereby reducing unemployment. This will also help in attracting many informal workers and formalizing them. Formalize the Informal Economy •Registration, taxation, organization and representation, legal and social protection, business incentives and support, and more. Extend State Protection to the Informal Sector •Social Protection - Extension of social protection coverage to excluded groups - Social and private insurance to incorporate informal workers by providing fiscal and other Incentives for their affiliation - Pensions and health coverage. •Legal Protection - Extending legal protection to the working poor in the informal economy( such as vendors, milkmen, plumbers etc) - Legal protection in providing a unique place for informal business(Eg to vend in defined public space) , labor rights, business rights, commercial rights and property rights. Possible solutions
  4. 4. Increase Productivity of Informal Enterprises & Incomes of the Informal Workforce •Productivity of informal sector workers can be increased by proper skill and technical education of informal sector workers also financial services, enterprise support should be made available through state level department •Favourable policy formation: - Proper supportive policy that ensures development of informal sector workers should be framed(Eg: macro policies that create demand for the goods and services produced by informal enterprises and workers). •Globalizing informal market: - Providing global platform so that informal sector workers/ enterprise can make an identity in global market.(Eg: “Amdavad Haat” a unique initiative by AMC where a stage is provided to exhibit product produced by informal sector workers to tourists) - Informal sector enterprise are capable of innovations and providing better quality & cheaper products the Government should lay out such policies to give them a global exposure. • Security against Risk & Uncertainty: - Need protection against the risks and uncertainties associated with their work, contingencies of illness, disability, property loss, and death. Increase : Supportive measures to increase assets and market access, to provide legal identity and rights, and to raise productivity Reduce: Measures that not only reduce risks but also address market power imbalances and policy or institutional biases that work against informal enterprises and workers. Increase the productivity
  5. 5. Formalization of Informal Sector Formalization of Informal Enterprises 1)Registration and taxation: ----Simplified registration procedures ----Progressive registration fees 2)Appropriate legal and regulatory frameworks, including: ----Enforceable commercial contracts ----Private property rights ----Use of public space 3)Benefits of operating formally: ----Access to finance and market information ----Access to public infrastructure and services ----Enforceable commercial contracts ----limited liability ----clear bankruptcy and default rules -----Access to government subsidies and incentives, including procurement bids and export promotion packages ----Membership in formal business associations ----Access to a formal system of social security Formalization of Informal Jobs 1)legal recognition and protection as workers 2)Rights and benefits of being formally employed: ----Freedom from discrimination ----Minimum wage ----occupational health and safety measures ----Employer contributions to health and pensions ----Right to organize and bargain collectively ----Membership in formal trade unions
  6. 6. Department for Unorganized sector Connecting informal sector Classification & screening Providing unique identity Training & Skill development Allotment of suitable jobs Fixing- Min Wages, Living condition at workplace Social, Health & Job Security Dispute Resolving and feedbacks Legalization & formalization of Informal sector conventional & unconventional media Based on occupation& nature of employment Unique Digital Identity For sustaining market competition Job Allotment based on skill and employment generation To stop exploitation at workplace Supportive environment & benefits of govt. schemes Will ensure proper functioning of organization Supportive Env. for Informal sector Enterprise/workers
  7. 7. Potential outcomes: •Department for informal sector will provide services like skills development, training, candidate verifications (i.e., obtaining police and address verifications) and initial screenings for hiring organizations. Since this platform focus solely on the informal sector job markets, they are also highly sensitized to the specific needs of these job seekers. •Every informal sector workers will be well informed of any government policies directly through their mobile phones and other suitable media •Digitalized information can be made accessible directly to the potential employers thereby reducing mediators, agents , contractors etc •Grievances redresses, dispute solving and feedbacks can be exchanged faster between the informal workers and Dept. for Unorganized sector. •Financial protection against ill health and maternity assistance •Pensions after specific age •Preventing Child Labor •Benefits in the form of legal and Social security from this department WHY to Connect?
  8. 8. HOW to Connect? Informal Sector is very diverse and highly unorganized sector , connecting them and tracking them is a difficult job as they have no representation at various level, it is hence necessary to connect and bring them in an organized communication network. Use of a variety of technology solutions, such as the Internet (e.g. Registering at Gram-Panchayats through websites in multiple languages ), mobile technology (e.g. SMS alerts and using mobile applications) and call centers can be used for registering and communicating. Moreover they can also be connected and registered with the help of Aadhar card & local media such as postcards, newspapers etc. Such modes can builds potentially scalable, sustainable and profitable communication model. Methods of Communicating Gram-Panchayats Informal sector workers Registration Producing Digital Identity (Will include history, skills & other info) Potential employers & Job allocation Awareness and marketing through local media
  9. 9. Classification of Informal sector workers In terms of Occupation •Small and marginal farmers, landless agricultural labourers, share croppers, fishermen, those engaged in animal husbandry, beedi rolling, labeling and packing, building and construction workers, leather workers, weavers, artisans, salt workers, workers in brick kilns and stone quarries, workers in saw mills, oil mills etc. In terms of Nature of Employment •Attached agricultural labourers, bonded labourers, migrant workers, contract and casual labourers come under this. In terms of Specially distressed categories •Toddy tappers, Scavengers, Carriers of head loads,Pickers, Drivers of animal driven vehicles, Loaders and unloaders come under this category. In terms of Service categories •Midwives, Domestic workers, Fishermen and women, Barbers, Vegetable and fruit vendors, News paper vendors etc. belong to this category.
  10. 10. Central Department for informal sector Special recruitment of officers by suitable exams and people representative Will look after other departments, Continuously assess the functioning of system, Financial Aid State Department Will include leaders of different associations and a govt. representative Will Play a major role in identifying jobs and employment generation, skill development District Department Panel of local employers and District representatives Play a major role in searching and allocating jobs, assist in legalizing and formalizing different jobs Regional Level Department Informal sector representatives & group of local coordinators Register & identify, Connect, Inspect workplace, allocate jobs
  11. 11. Case of Informal workers in the field of Construction Problems of informal workers • NO job security • Low and irregular wages • Hazardous work- Frequent accidents • Lack of proper living condition • Lack of accident/disability insurance • Exploitation up to some level Advantages of Formalizing • More regular work • Higher wages • skills training: masonry, carpentry, and other construction skills • Safety regulations • Accident insurance and workers’ compensation • ID cards • Registers or other proof of days of work Getting other advantages of platform in the form of Job, social and health security Income Generation & Tax Payment Job allotment based on skills (directly communicating potential employer) Classification and screening according to skills Training and Skill development Registration and obtaining unique identity card
  12. 12. Funding and financing of Department: Expenses: •Setting up basic infrastructure of the department •Funding necessary to run and pay wages of Department employees •Expense on health security, social security and others Income source: •Department will need good sum of financial Aid from government •Also it will also generate funds while registering the members •Fund raising can be done by signing MOU’s with private company’s who are in search of workforce Financial Cycle Government Aid Employment opportunities Income Generation Special Tax by 2-4% (Will bring informal sector in Tax ambit) Life time Social / Health Security
  13. 13. Controlling & Monitoring Cell •Supporting the Organization’s Objectives The organization should therefore make internal control part of risk management and integrate both in its overall governance system. •Determining Roles and Responsibilities The organization should determine the various roles and responsibilities with respect to internal control, including the governing body, management at all levels, employees, as well as coordinate the collaboration among informal sector workers •Linking to Individual Performance The governing body and management should link achievement of the organization’s internal control objectives to individual performance objectives. Each person within the organization should be held accountable for the achievement of assigned internal control objectives. •Ensuring Sufficient Competency The governing body, management, and other participants in the organization’s governance system should be sufficiently competent to fulfill the internal control responsibilities associated with their roles. Evaluating and Improving Internal Control in Organizations •Communicating Regularly Management should ensure that regular communication regarding the internal control system, as well as the outcomes, takes place at all levels within the organization to make sure that the internal control principles are fully understood and correctly applied by all using new modes of communication •Monitoring and Evaluating Both individual controls as well as the internal control system as a whole should be regularly monitored and evaluated. Identification of unacceptably high levels of risk, control failures, or events that are outside the limits for risk taking could be a sign that an individual control or the internal control system is ineffective and needs to be improved. • Providing for Transparency and Accountability The governing body, together with management, should periodically report to stakeholders the organization’s risk profile as well as the structure and factual performance of the organization’s internal control system.This will ensure Corruption free System
  14. 14. Challenges •Communication: Provided communication system can fail ma be due to lack of awareness or other reasons •Corruption: The job appointer may be partial in appointing job •Awareness: Lack of awareness among this sector may lead to failure of whole system •Lack of Personal Interest: Due to ignorance and lack of personal interest registration at local level may get affected •Delay in services: Delay in services such as legal protection, pensions ,financial & medical aid and delay in other public schemes •Lesser employment opportunities: Available employment opportunity may be less than the number of job seekers Solution •Communication: The idea is to optimally use existing media and also making use of new sources •Corruption: The continuous assessing system and problems or dispute redresses can be done directly through call centers, mobile sms , mail, letters etc with guaranteed action within 24 hours •Awareness: Use of newspaper & other media for marketing, also a local level awareness programs will ensure that all sector workers are well aware of the system •Interest : Lucrative benefits such as social, health & job securities, pensions and benefits of other government schemes will ensure high participation •Services Delay: This can be overcome by direct cash transfer schemes, use of digital information etc and use of better Feedback system •Employment Generation: Skill development & training programs will produce good numbers of Skilled and productive workforce which will be supplied to SMEs, Encouraging Micro Enterprises through government support and legalizing such unorganized enterprise will also generate employment. More over active role of private organization will ensure higher placement and recruitment rates.
  15. 15. Sources •http://www.goodwill.org/wp-content/uploads/2011/07/0720_Identity.jpg Identitycard •ILO •Manthan •http://static.ibnlive.in.com/ibnlive/pix/sitepix/08_2007/oldman_poverty313.j pg (Image of scrawler) •http://static.ibnlive.in.com/ibnlive/pix/sitepix/08_2007/oldman_poverty313.j pg