Paramjit Singh Vohra
Twenty percent of the workers working in the unorganized sector in the cities are dependent on daily wages. For this reason the economic standard of living of these workers remains in pathetic condition. They are also deprived of the facilities of social security. Even their minimum wage is not guaranteed. Developing countries rely more heavily on the unorganized sector for employment generation.
For this reason, they have always been economically backward from the developed countries. More or less the same situation is in India as well. Today, ninety percent of India’s labor force population is engaged in the unorganized sector for employment. Their number is around forty two crores. On the other hand the influx of people of this area is very less. According to statistics, the contribution of this sector to the total national income is only 30 percent.
Due to this the total national income of India is low and the per capita income in India is also very low as compared to the developed nations. As a result, a large section of our society seems to be struggling for economic facilities in everyday life.
The main problems of the workers working in these sectors are low income, uncertainty of permanent employment and not getting the benefits of the provisions of labor laws, the bigger problem is being deprived of economic facilities. We saw a live example of this during the restrictions during the Corona epidemic when a large section of workers were forced to walk on the streets without employment.
It is also a fact that even after two years, this section of workers is still struggling financially. He has started getting employment back, but he has not got financial happiness yet. For this reason, the Indian economy is also not looking very strong for economic development. The unorganized sector of India mainly consists of rural population. About seventy percent of rural workers are engaged in the unorganized sector. Most of them are those who depend on agriculture in the villages for economic subsistence or do their traditional work in the villages.
Apart from this, those small landless farmers are also associated with this area who move towards villages during the time of sowing and harvesting of crops. Fifty percent of the people of this area in the cities are engaged in their own minor occupations which include grocery shop, vegetable, milk seller, roadside street vendors, domestic plumbers, electricians etc. .
Apart from this, a large number of such workers are engaged in manufacturing industries, transport, warehousing, hotels, restaurants, various communication-telecom media, call centres, financial services sector etc. Statistics also show that 20 percent of the workers working in the unorganized sector in cities are dependent on daily wages. For this reason the economic standard of living of these workers remains in pathetic condition. They are also deprived of the facilities of social security.
Even their minimum wage is not guaranteed. Not only are they always deprived of the necessary financial security like pension, medical facility, provident fund, insurance, gratuity, which are the economic rights of the employees in all government institutions, but they are also ignorant. This is because all such sources of livelihood are generally not governed by any labor and industrial laws. That’s why they are called unorganized sector.
It is a matter of debate that why the unorganized sector is not in the mainstream of the economy, while this sector is the main support for the economic development of the rural and backward classes of India. For example, in the Indian economy today, the contribution of about 40 percent is received from the unorganized sector in the field of manufacturing and production.
If this too is included in the mainstream, then it can give a new impetus to economic progress. Due to this, self-reliance is also possible to a great extent and the eradication of poverty is also possible. The analysis on this side suggests that there are some problems behind the unorganized sector not being in the mainstream. The biggest of these is that the business and industrial businesses working in the unorganized sector do not get financial facilities easily. Because of this, the cost of the loan is high for them.
Because of this, their business cannot even expand. It is a fact that due to the tightness of financial facilities, the profitability of the unorganized sector industries is also less. The result of this is that even the workers associated with it are not able to get financial facilities.
It is not easy for small industries to become big in all developing countries like India. Whereas it is comparatively easier for large industries to expand their scope further. The main role behind this popular concept is the non-availability of additional amounts of capital for small traders. Similarly, the profit to sales ratio for small industries and businesses is relatively low.
When it comes to problems other than the financial side, there has always been a lack of innovation in the unorganized sector. Most of the industries are still running on the old pattern. In the absence of modern management system, they lag behind in the competition and there is also the problem of quality. Looking at the other side also, the unorganized sector remains the technology and modern methods of marketing.
People working in the unorganized sector have less purchasing power. This also affects the rate of economic development of the country. In order to strengthen the Indian economy, it is necessary to focus on enriching the standard of living of the people engaged in the unorganized sector. For this, first of all, their income will have to be increased and they will have to be given a shield of socio-economic security.
There are three major problems in the unorganized sector. The first is about the minimum wage. To ensure minimum wages, there is a need to bring in flexibility in the law related to it. According to the economic system of the states, the rates of minimum wages should be fixed and they should also be changed from time to time. One aspect is also seen that the urban working class of the unorganized sector needs more financial assistance than the rural sector.
The reason is that in times of crisis, the rural laborer has his family, his relatives available for financial and emotional support in times of crisis, whereas it is not so in the urban area. In urban areas, a person struggles for even minor facilities, from home to medical facilities.
It is quite clear that for the smooth functioning of the economy, it is necessary to strengthen the unorganized sector. It has been seen that many times the industries, businesses and companies of organized sectors get hurt at the economic level, due to which the economy gets shocked. But even in such adverse times, the unorganized sector has given support to the economy. The economic slowdown of 2008 is an example of the fact that the economic operations of the unorganized sector had taken over the growth rate, otherwise the global recession would have had a huge impact on India.
On the other hand, the volatility of the Indian capital market and the stock market also has an impact on the organized sector industries, even if the reasons are global. Even in all these opposite directions, the industries and trades of the unorganized sector keep their pace. Therefore, the welfare of the unorganized sector and the workers associated with it is more important.