Working Condition in Informal Sector - Indian Perspective


By

Shilpi Jain
Teaching Associate (HR/MKT)
INC
Rewa
 


Informal Sector plays very significant role in the economy of developing country and this is the only component of economy that is growing. Informal or unorganized sector is typically composed of various small business units like street sales; business from home etc. unorganized sector is a result of rural to urban migration, but they does not pay any taxes because  they does not listed in official statistics. In developing countries like India 90 per cent of employment constitutes the informal sector, in fact this sector is very important for manufacturing activities. As the sector is not registered the workforce under this is not governed by any laws. Therefore no fixed pattern is followed for working. The working hours and the working conditions do not have any defined pattern as compared to the organized sector. According to the work the working hours can be stretched beyond eight hours or even more than that and the employees have no leave or medical benefits and no provision for Provident Fund, Pension Benefit etc as compared to the organized sector. The working condition which is one of the most prominent factors of any organization is also not satisfactory from health and safety point of view.

Informal sector plays important as well as controversial role as one side it provides Jobs and reduces unemployment and poverty too but on the other hand in many of the cases jobs are low paid with poor job security. The ratio of urban Jobs is higher so as the ratio of unskilled workers. The investment is also very low so as the productivity and this is the major obstacle in the development of this sector. Due to the major role in economy the Human Resource and the work related matters of this sector require equal consideration. Healthy and satisfied workforce contribute at the maximum in the organization, Congenial or hygienic atmosphere at workplace is foremost important area  to be focused and a serious matter of concern because it directly affects the working capacity of the workers and in the organization's profit and ultimately contribute in the economy accordingly. As far as the informal sector is concerned the conditions of work are not safe, hazardous, unhealthy, poor lighting, no proper ventilation, less space, long hours of works. The workers are living in pathetic conditions. These poor, unsafe and unhealthy working and living conditions not only accelerate health related problems like, stress, strain, fatigue and injuries due to accident at workplace but also it reduces the productivity, because unhealthy work environment results in unhealthy workers.

Business in Informal sector required low application of capital so as result in low incomes. The expenditure on the workers is more than the investment done on the business. It effects entrepreneurial activity, but at the detriment of state regulations compliance, particularly regarding tax and labor regulations. It helps in reducing poverty, but in some cases informal sector jobs are low-paid and the job security is also less. The size of the informal labor market varies from the estimated 4-6% in the high-income countries to over 50% in the low-income countries.

Basically the concept of the informal sector was introduced into international usage in 1972 by the International Labor Organization (ILO) in its Kenya Mission Report, which defined informality as a "way of doing things characterized by (a) ease of entry; (b) reliance on indigenous resources; (c) family ownership; (d) small scale operations; (e) labor intensive and adaptive technology; (e) skills acquired outside of the formal sector; (g) unregulated and competitive markets". Since that time, many definitions were introduced by different authors and the ILO itself. The ILO/ICFTU international symposium on the informal sector in 1999 proposed that the informal sector workforce can be categorized into three broad groups: (a) owner-employers of micro enterprises, which employ a few paid workers, with or without apprentices; (b) own-account workers, who own and operate one-person business, who work alone or with the help of unpaid workers, generally family members and apprentices; and (c) dependent workers, paid or unpaid, including wage workers in micro enterprises, unpaid family workers, apprentices, contract labor, home workers and paid domestic workers.

Various informal sector workplaces are described, including home based enterprises, displaying a wide range of poorly controlled work hazards, particularly welfare and hygiene, ergonomic and chemical hazards, worsened by poor work organization, and poor community environments and social infrastructures. They are generally hidden but substantial burden of ill health in informal sector work is described. Improving occupational health in the sector can be done through implementing existing knowledge, but demands efforts to confront the underlying risk environments that undermine the application of such knowledge. Such efforts include building social capital and organization within the sector, enhancing collective support systems and public infrastructures, supporting multi sectoral community based approaches, and ultimately confronting the underlying economic marginalization of informal sector work.

The development of skills and knowledge is a major instrument for promoting decent work in the informal economy. Better, less work-intensive and safer technologies can raise productivity and incomes, reduce hard work and occupational risks to health and safety, and improve products. New skills and knowledge can open doors to more economically and socially rewarding jobs. Basic life skills, such as numeracy and literacy, problem-solving and management, communication and negotiation skills, improve one's confidence and capacity to explore and try new income-earning opportunities.

The education also plays an important role in providing jobs in the informal sector of the economy, and it is necessary that they prepare themselves for employment or self-employment. The education provides the necessary skills to compete in employment and assist them to obtain skilled, well paid, and secure jobs. Within the non-formal approach to education, it is examines that training in income-generating projects, which are a major conduit for assistance to poor person in developing countries. Some recommendations for improved strategies of education and training provision are presented although well placed to render assistance to refugees, indigenous NGOs usually play only a marginal role, compared with the Northern NGOs which dominate most humanitarian aid programmer. There is a substantial difference between women's studies and women in development and gender studies and gender and development in rural areas.

The informal sector has acquired great significance over the years as a source of employment and livelihoods for an increasing number of people, especially women, in both rural and urban areas of the developing world. It has particularly become a key mechanism for distributing goods and services to the urban poor. Even in formal market jobs or enterprises can be classified as informal if they provide poor work protection and the life style to their employees.

In Small-scale enterprises , informal sector activities are an important and growing source of employment in many developing countries, they provide the bulk of urban employment (61 per cent of the urban lab our force), and are second only to smallholder agriculture as a rural employer. Nevertheless, it is also appropriate to indicate that in the developing countries, the informal sector has developed in the context of an unemployed and underemployed population where little or no social support has existed, particularly for poor women.

Thus, in informal sector economic activity is a dynamic process which includes many aspects of economic and social theory including exchange, regulation, and enforcement. Informal economic activity is chronological in nature. Regulations and degrees of enforcement change frequently, sometimes daily, and any instance of economic activity can shift between categories of formal and informal with even minor changes in policy. In developing countries, the largest part of informal work, around 70%, is self-employed, in developed countries, wage employment predominates. The majority of informal economy workers are women. Policies and developments affecting the informal economy have thus a distinctly gendered effect.

Informal sector though looks unsystematic as regards working condition, wages, health and safety but at the same time it contributes a lot as regards employment, resource generation. It can contribute a lot to nation if working people are educated, working condition is improved.
 


Shilpi Jain
Teaching Associate (HR/MKT)
INC
Rewa
 

Source: E-mail October 22, 2008

           

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