The document discusses the unorganized sector in India. It begins by defining the unorganized sector and noting that it generates over 50% of India's GDP. It then outlines the key differences between organized and unorganized labor. It categorizes unorganized labor into four groups: occupation, specially distressed, service categories, and nature of employment. It details the characteristics of unorganized labor such as lack of protections, debt bondage, and irregular hours. It also discusses the advantages and disadvantages of working in the unorganized sector, such as direct interaction with employers but lack of job security. Recent government measures for the unorganized sector are also mentioned.

2. Page 1 of 7
Table of Contents
UNORGANIZED SECTOR ....................................................................................................................... 2
KEY DIFFERENCES BETWEEN ORGANIZED AND UNORGANIZED LABOUR........................................................... 2
CATEGORIES OF UNORGANIZED LABOUR: ................................................................................................. 2
CHARACTERISTICS OF UNORGANIZED LABOUR ........................................................................................... 3
ADVANTAGES OF WORKING IN UNORGANIZED SECTORS:............................................................................. 4
DISADVANTAGES OF WORKING IN UNORGANIZED SECTORS: ........................................................................ 5
LEGISLATIVE MEASURES TAKEN BY THE GOVERNMENT. ............................................................................... 6
REASONS FOR EXISTENCE ..................................................................................................................... 6
RECENT DEVELOPMENTS IN THE UNORGANISED SECTOR:............................................................................. 6
CONCLUSION..................................................................................................................................... 7

3. Page 2 of 7
Unorganized Sector
“The unorganized sector consists of all unincorporated private enterprises owned by
individuals or households engaged in the sale and production of goods and services operated
on a proprietary or partnership basis and with less than ten total workers”
The unorganized sector generates 50.6% of India’s Gross Domestic Product.
Key Differences between Organized and Unorganized Labour
Organized Labour Unorganised Labour
• Engaged in formal work contract. • No formal work arrangements.
• Offered well-regulated wage packages. • Uncertain and fluctuating wages.
•Work schedule is well regulated. • No regulated work Schedule.
• Have regular Employment. • Uncertain about work and place of work.
Categories of unorganized labour:
There are four categories of unorganized labour are:
• Occupation
• Specially distressed
• Service categories
• Nature of employment
Occupation
In terms of unorganized occupation groups involve salt workers, landless agriculture labour,
those engaged in animals husbandry, beedi rolling, small and marginal farmers, leather
workers, fisherman, share croppers, labeling and packaging, building and construction
workers, weavers, oil mills, workers in saw mills, artisans, workers in brick kilns and stock
quarries all are comes under the occupation categories.
Specially Distressed
In terms of unorganized specially distressed groups involve loaders and unloaders, drivers of
animal driven vehicles, scavengers, toddy tappers, carriers of head load all are the comes
under the specially distressed categories.
Service categories
In terms of unorganized service categories groups involve barber, vegetables vendor, fruits
vendor, fisherman, fisherwomen, midwives, domestic workers, power loom workers,

4. Page 3 of 7
cobblers, auto driver, rikshaw pullers, handloom weavers, carpenters, lady tailors, sericulture
workers, tannery workers, physically handicapped self-employed persons, handicraft artisans
all are the comes under the services categories.
Nature of employment
In terms of unorganized nature of employment group involve contract labourers, migrant
workers, bounded labourers, attached agriculture labourers, casual labourers all are come
under the nature of employment categories.
Characteristics of unorganized labour
• Lack of official Protection and recognition.
o In this sector there is no government rule and regulation are followed and not
registered with the government that's why lack of official protection and
recognition in the sector.
• Debt bondage.
o In this sector debt bondage is very common among the employed as well as
the self-employed labour because of in general there is no fixed wage for their
work.
• Little or No job security
o In unorganized sector, which is not registered with government and whose
terms of employment are not fixed and regular is consider as unorganized
sector that's why there is little or No job security of the employee.
• Absence of Trade union
o Unorganised sector as a production or service Oriented enterprise owned by
individuals or self-employed workers and if workers are employed, then the
total number of workers cannot exceed 10. it is basic reason of absence of
trade union in this sector.
• Low wage
o In this sector work hours of the workers are not fixed they get daily wages for
their work which is very less compared to the same work done by the
organized labour.
• Child Labour
o There is chance of child labour or other violence because of Unorganised
sector which is no government rule and regulation are followed.
• No Benefits
o Workers don't have any benefits like medical benefits, paid leave etc.

5. Page 4 of 7
• Irregular working hour
o In this sector working times are not fixed, sometimes the workers have to
work on the Sunday and the public holidays.
Advantages of working in Unorganized Sectors:
1. Direct Interaction with the Employers:
Ø In organized sectors; only the top authorities have access to the bosses.
Ø In the Unorganized sector, the workers taking profile like drivers, housekeeping,
constructional labors are in direct contact with the employers.
Ø It helps to build a good relation between employees and employers. So, that’s why
employees get more empathetic behavior from the employers. This happens because
of contact interaction with employee to employers and employers to employees make
them better understanding the conditions of the workers and act accordingly.
2. Easy hiring:
Ø In the organized sectors jobs, their hiring process is very complex and time taking. As
an example, in the case of govt. jobs, their hiring process takes months and even
sometimes years.
Ø It increases the financial and mental pressure on the employee.
Ø In the case of un organized sectors hiring is done with shorter procedures.
3. Tax-Free Income:
Ø Most of the earning through in this sector are not being measurable. That’s why
earning in this sector are protected from tax through unsaid rules.
4. Favorable Holiday Schedule:
Ø In organized sectors, holidays and leave is a big issue with employees.
Ø They do not get proper holidays and the holidays and leave is not in their control.
Ø In unorganized sector, employees get holiday and leave through directly by
requesting to the employers.
Ø The holiday may be granted altogether.
Ø The workers also enjoy paid holiday and leave when the employers in not at work
place.
5. Bonuses and Emergency payment:
Ø In organized sector, when someone want or need advance payment. They have to go
through a complex protocol but in unorganized sector, employers generally offer
financially as well as logistic support.
Ø This happened because employers tend to trust the workers overtimes and also the
condition or problems of the workers are directly visible to them.

6. Page 5 of 7
Disadvantages of working in Unorganized Sectors:
1. Little awareness in workplace hazards:
Ø In unorganized sectors labors are not aware about the consequences on their
health of work on their workplaces.
Ø Due to low nutrition and heavy physical labor they suffer by so many health
problems.
Ø Poor workers have low income and inability to pay for nutrition and health
care leads them to be indebted.
2. Living areas close to work place:
Ø This leads to more accident happening. Because some of the construction sites
are very vulnerable in safety and more chances that to meeting with accident
and most of the labors are living at the their work place.
Ø If any labor engaged with accidents, they suffer by loss in the earning
capacity, requires additional expenditure for medical treatment.
3. Extend work hours and Exploitation:
Ø In un organized sector having no set of rules, most of the employers will not
give money to them if the work is not completed. So, they exploit them and
take lengthy working hours.
Ø It will affect their social and family life.
4. No Job Security:
Ø In unorganized sector they are individual and self-employed workers. So,
there is no set of laws of hiring and firing any labor. It totally depends on the
need and mood of the employers. He has power to fire any labor at any point
of time.
Ø In unorganized sectors labors depends on multiple employment.
Ø When we talk about agricultural workers, they only get three-month work in
this sector after that they search an alternative job to sustain their livelihoods.
5. Low wages and not timely paid:
Ø Most of the labors in this sector are illiterate and they having lack of
awareness so these labors have not able to bargain and demand their proper
wages of their works.
Ø Some laws were also formed by People Union of India (AIR 1982 SC 1473)
The Supreme Court held that employing workers for wage below the statutory
minimum level will result in forces labors, which is prohibited under Article
23 of the constitution of India. But lack of awareness and education between
unorganized sectors labors is not getting good wages for their work.

7. Page 6 of 7
Ø They also not timely paid and being frauded sometime.
6. No Concept of Trade/Labor Union:
Ø Due to seasonality workforces and migrants labor there is very complex to set
up a trade/labor Union.
Ø Most of the work places having very a smaller number of employees also. So,
that’s why it is impossible to make a Union there.
Legislative Measures taken by the government.
Reasons for Existence
• Uneven Economic Development.
• Incapability of the government to generate new jobs.
• Non-payments of Taxes.
• Effective implementation of laws.
Recent Developments in the Unorganised sector:
• Unorganized sector workers social security Bill, 2007.
• Aam Aadmi Bima Yojna, 2007.
Labour
Legislation
Type of Intervention
The Minimum
wage Act, 1948
To give the minimum compensation for work. Workers in
scheduled employment to be paid minimum wage.
The trade Union
Act, 1926
To enable workers of a number of small units to form unions, who
can bargain wages and other condition of work?
The Industrial
Dispute Act, 1947
To enable unions to increase industrial disputes on wages and the
conciliation machinery to intervene.
The Equal
remuneration Act,
1976
This was for Assuring same wage for the same work done by
women.
The Payment of
wages Act, 1936
To regulate the manner of payment of wages and their realisation in
case of non-payment.

8. Page 7 of 7
• Health Insurance Scheme for Unorganised sector BPL workers, 2007.
• Janashree Bima Yojna.
• Micro credit Programmes.
• Pradhan Mantri Jiban Jyoti Bima Yojna.
• Old age pension.
• Rastriya swasth Bima Yojna.
Conclusion
Despite having so many laws for the Unorganized labour force in India, for the social
security, the situation of the unorganized labour has not changed much. There are a lot of
schemes framed by the state and the central government, but unfortunately most of the time,
the government has failed to apply those schemes at the time of need.
The unorganized sector in India is Huge and has great potential all it needs is good policies
and management.