The document discusses challenges faced by India's large informal workforce and efforts made by the government to address these challenges. It notes that India will have 300 million new job entrants by 2025 who will likely join the informal sector due to lack of employment opportunities. Currently, the informal sector faces issues like lack of social security, low wages, gender discrimination, and poor working conditions. The government has introduced various schemes to help informal workers, but implementation remains a challenge. Moving forward, experts recommend increasing employment, formalizing the informal economy, extending social protection, and boosting productivity through training and development. A new department focused solely on the informal sector could help connect workers to skills training, unique digital identities, suitable jobs, minimum wages,

2. 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

3. 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.

4. 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

5. 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

6. 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

7. 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

8. 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?

9. 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

10. 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.

11. 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

12. 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

13. 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

14. 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

15. 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.

17. 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