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CSEND FORUM:

Creating Sustainable Decent
Work Conditions for the
Informal Sector workers in
India




                              Oct.20.2008
Service sector market place for a
million micro-entrepreneurs and
             workers
Global Population
                    6.7 Billion people
India’s Population 1.3 billion




Mumbai population 21
      million




         Bangalore
     population 7 million
Age Demography of population (millions)




Year <15        15-64 65+        Total
2000   361      604      45      1010
2005   368      673      51      1093
2010   370      747      58      1175
2015   372      819      65      1256
2020   373      882      76      1331
India – recent numbers
•   GDP (PPP) $5.21 trillion (PPP) (2008 est.)
•   GDP growth 9.6% (2006/07)
•   GDP per capita           $978 (nominal); $2,659 (PPP)
•   GDP by sector            agriculture: 19.9%, industry: 19.3%, services: 60.7%
    (2006 est.)
•   Inflation (CPI) 12.01% (26 July 2008)
•   Population
    below poverty line       25% (2002 est.)
•   Labour force 509.3 million (2006 est.)
•   Labour force
    by occupation agriculture: 60%, industry: 12%, services: 28% (2003)
•   Main industries textiles, chemicals, food processing, steel,
                    transportation equipment, cement, mining,
                    petroleum, machinery, software, services
Context of informal sector
                 labour
•   450 million informal sector workers
•   92% of the total workforce is informal sector
•   22 million construction workers
•   In 1991, 39 million people migrated to urban areas
•   Over 70% of the GDP is from urban centres
•   A 2007 report by the state-run National Commission for Enterprises in the
    Unorganised Sector (NCEUS) found that 65% of Indians, or 750 million
    people, lived on less than 20 rupees per day, with most working in the
    "informal labour sector with no job or social security, living in abject
    poverty.”
The basis for LabourNet
•   Large migration from rural to urban areas and into each other
•   Many services /employment will be short term life cycle (no full-term
    employment)
•   The traditional sense of collective bargaining will not work for
    informal sector workers – they need alternative forms of social
    protection
•   Technology and ICT based solutions can be leveraged
•   Informal sector workers have little or no skills
•   Most of the vocational training is focused on post school client
•   Most workers do not invest in training
•   Financial services for urban informal sector workers is non-existent
What does LabourNet hope to achieve

•   Improve employability (employment)
•   Improve incomes
•   Training
•   Access to health /accident cover
•   Financial services
What market problem are we trying to solve

• Finding service providers for home, corporate and
  construction Projects
   – Home and corporate infrastructure repairs, maintenance, modifications
     and new projects
   – Domestic help for home, facility maintenance workers for small and
     large businesses
   – Drivers, gardeners, nannies, etc.,

• Offer increasingly trained service providers who can deliver
  quality service
   – All repair and maintenance and Project workers will be trained in higher
     and higher level of complexity
   – Domestic workers will be trained in house keeping
   – Likewise drivers, gardeners, cooks, nannies will be trained appropriately
     in modules for increasing complexity of service
What will the venture
        do?
20081022 labour net-presentation
Revenue Model
           A starter account sold to
        home users to service repairs     PAYMENT MODES
        involving, plumbing, electrical   •Pre-Paid Cards
        work, carpentry, masonry, etc.    •Post Paid Service
        Staffing services for domestic
                                          •Project Cost
         maids, drivers, gardeners etc


           A starter account sold to
          business users to service
         repairs involving, plumbing,     From MSE and
          electrical work, carpentry,
                                          Customer
                 masonry, etc.
             Staffing services for
                                          •Registration Fee
            housekeeping, drivers,        •Transaction Fee
                 gardeners etc            Service Fees
                                          •Tool and Material
                                          Manufacturers
                                          •Web Advertisement
Market Potential
• Service providers
     • There is an estimated informal sector working
       population of 12.6 million in seven cities
• Middle income groups
     • An estimated 8.5 million households are in the
       middle income group (above 300,000 INR)
• Offices, Hospitals and Schools
     • There are more than 3 million small and medium
       businesses in the seven cities in India.
Value created
• For the micro entrepreneur
     •   Average 50% increase in overall incomes
     •   Improved skills and opportunity for growth
     •   Access to ready information on jobs
     •   Better access to financial and social services
• For the Client
     • Improved access to reliable services
     • Large number of competitive service providers to
       choose from
     • Easy payment options
LabourNet Scale up
Model
LabourNet Scale up Plan
                Micro/Small
                         Entrepreneurs Labour
                         and       their Facilitation
            Population   workers         Centres
Cities      Millions     K
Mumbai      21           264              9
Delhi       17           214              7
Kolkota     19           239              8
Chennai     8            101              3
Hyderabad   8            101              3
Bangalore   7            88               3
Pune        5            63               2
            85           1070             36
20081022 labour net-presentation
Note: This publication has been made available by CSEND.org with the agrement of the author.




                        The Centre for Socio-Eco-Nomic Development (CSEND) aims at
promoting equitable, sustainable and integrated development through dialogue and
institutional learning.




Diplomacy Dialogue is a branch of the Centre for Socio-Eco-Nomic Development
(CSEND), a non-profit R&D organization based in Geneva, Switzerland since 1993.

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20081022 labour net-presentation

  • 1. CSEND FORUM: Creating Sustainable Decent Work Conditions for the Informal Sector workers in India Oct.20.2008
  • 2. Service sector market place for a million micro-entrepreneurs and workers
  • 3. Global Population 6.7 Billion people
  • 4. India’s Population 1.3 billion Mumbai population 21 million Bangalore population 7 million
  • 5. Age Demography of population (millions) Year <15 15-64 65+ Total 2000 361 604 45 1010 2005 368 673 51 1093 2010 370 747 58 1175 2015 372 819 65 1256 2020 373 882 76 1331
  • 6. India – recent numbers • GDP (PPP) $5.21 trillion (PPP) (2008 est.) • GDP growth 9.6% (2006/07) • GDP per capita $978 (nominal); $2,659 (PPP) • GDP by sector agriculture: 19.9%, industry: 19.3%, services: 60.7% (2006 est.) • Inflation (CPI) 12.01% (26 July 2008) • Population below poverty line 25% (2002 est.) • Labour force 509.3 million (2006 est.) • Labour force by occupation agriculture: 60%, industry: 12%, services: 28% (2003) • Main industries textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, services
  • 7. Context of informal sector labour • 450 million informal sector workers • 92% of the total workforce is informal sector • 22 million construction workers • In 1991, 39 million people migrated to urban areas • Over 70% of the GDP is from urban centres • A 2007 report by the state-run National Commission for Enterprises in the Unorganised Sector (NCEUS) found that 65% of Indians, or 750 million people, lived on less than 20 rupees per day, with most working in the "informal labour sector with no job or social security, living in abject poverty.”
  • 8. The basis for LabourNet • Large migration from rural to urban areas and into each other • Many services /employment will be short term life cycle (no full-term employment) • The traditional sense of collective bargaining will not work for informal sector workers – they need alternative forms of social protection • Technology and ICT based solutions can be leveraged • Informal sector workers have little or no skills • Most of the vocational training is focused on post school client • Most workers do not invest in training • Financial services for urban informal sector workers is non-existent
  • 9. What does LabourNet hope to achieve • Improve employability (employment) • Improve incomes • Training • Access to health /accident cover • Financial services
  • 10. What market problem are we trying to solve • Finding service providers for home, corporate and construction Projects – Home and corporate infrastructure repairs, maintenance, modifications and new projects – Domestic help for home, facility maintenance workers for small and large businesses – Drivers, gardeners, nannies, etc., • Offer increasingly trained service providers who can deliver quality service – All repair and maintenance and Project workers will be trained in higher and higher level of complexity – Domestic workers will be trained in house keeping – Likewise drivers, gardeners, cooks, nannies will be trained appropriately in modules for increasing complexity of service
  • 11. What will the venture do?
  • 13. Revenue Model A starter account sold to home users to service repairs PAYMENT MODES involving, plumbing, electrical •Pre-Paid Cards work, carpentry, masonry, etc. •Post Paid Service Staffing services for domestic •Project Cost maids, drivers, gardeners etc A starter account sold to business users to service repairs involving, plumbing, From MSE and electrical work, carpentry, Customer masonry, etc. Staffing services for •Registration Fee housekeeping, drivers, •Transaction Fee gardeners etc Service Fees •Tool and Material Manufacturers •Web Advertisement
  • 14. Market Potential • Service providers • There is an estimated informal sector working population of 12.6 million in seven cities • Middle income groups • An estimated 8.5 million households are in the middle income group (above 300,000 INR) • Offices, Hospitals and Schools • There are more than 3 million small and medium businesses in the seven cities in India.
  • 15. Value created • For the micro entrepreneur • Average 50% increase in overall incomes • Improved skills and opportunity for growth • Access to ready information on jobs • Better access to financial and social services • For the Client • Improved access to reliable services • Large number of competitive service providers to choose from • Easy payment options
  • 17. LabourNet Scale up Plan Micro/Small Entrepreneurs Labour and their Facilitation Population workers Centres Cities Millions K Mumbai 21 264 9 Delhi 17 214 7 Kolkota 19 239 8 Chennai 8 101 3 Hyderabad 8 101 3 Bangalore 7 88 3 Pune 5 63 2 85 1070 36
  • 19. Note: This publication has been made available by CSEND.org with the agrement of the author. The Centre for Socio-Eco-Nomic Development (CSEND) aims at promoting equitable, sustainable and integrated development through dialogue and institutional learning. Diplomacy Dialogue is a branch of the Centre for Socio-Eco-Nomic Development (CSEND), a non-profit R&D organization based in Geneva, Switzerland since 1993.