The Informal Sector in India
THE INFORMAL SECTOR.
In India, about 92% of the labour force or about 326 million persons work in the informal sector. As such, it can be well be termed as the “Informal Economy”.
The concept of the Informal Sector was first introduced by Keith Hart in a field study of urban workers in Ghana in 1971 for denoting the self – employed sector which provided a source of income to many new entrants to the labour force who were unable to secure jobs in the organized or formal sector.
The concept was first used in an official document of the ILO – UNDP (International Labour Organisation) with reference to their employment mission to Kenya in 1972. This mission identified the main characteristics of the informal sector as ease of entry, reliance on indigenous resources, family ownership, labour intensive technology, small scale of operations, non-institutional skills’ formation and unregulated but competitive markets (Anand, H). Moreover, workers in the informal sector do not enjoy the measure of protection afforded by the formal modern sector in terms of job security, decent working conditions, and old age pensions.
Though the term “informal sector” gained currency after ILO evolved a conceptual framework and guidelines for the collection of statistics on informal sector, there has not been any single definition of informal/unorganised sector in India. (Papola, 1981).
Generally the following definition of the Informal Sector is used,
“The informal 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 definition of the unorganised enterprise constituting the unorganized sector given her is a generic one in the sense it has no legal personality of its own (other than the person who owns it); it is small in employment size and, more often than not, associated with low
In India, about 92% of the labour force or about 326 million persons work in the informal sector. As such, it can be well be termed as the “Informal Economy”.
The concept of the Informal Sector was first introduced by Keith Hart in a field study of urban workers in Ghana in 1971 for denoting the self – employed sector which provided a source of income to many new entrants to the labour force who were unable to secure jobs in the organized or formal sector.
The concept was first used in an official document of the ILO – UNDP (International Labour Organisation) with reference to their employment mission to Kenya in 1972. This mission identified the main characteristics of the informal sector as ease of entry, reliance on indigenous resources, family ownership, labour intensive technology, small scale of operations, non-institutional skills’ formation and unregulated but competitive markets (Anand, H). Moreover, workers in the informal sector do not enjoy the measure of protection afforded by the formal modern sector in terms of job security, decent working conditions, and old age pensions.
Though the term “informal sector” gained currency after ILO evolved a conceptual framework and guidelines for the collection of statistics on informal sector, there has not been any single definition of informal/unorganised sector in India. (Papola, 1981).
Generally the following definition of the Informal Sector is used,
“The informal 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 definition of the unorganised enterprise constituting the unorganized sector given her is a generic one in the sense it has no legal personality of its own (other than the person who owns it); it is small in employment size and, more often than not, associated with low
Bibliography: 1. “Does Class Matter? Class Structure and Worsening Inequality in India.” Economic Political Weekly July17, 2010. 2. Gary S; Pfeffermann Guy (2003) “Pathways out of Poverty: Private firm and economic mobility in developing countries”. 3. Hart K. (1973), “Informal income opportunities and urban employment in Ghana”, Journal of Modern African Studies. 4. Jafa V.S (2001) “India: Labour and Employment scenario in the 21st century” 5. Papola, T.S. (1981), “Urban informal sector in a developing economy”. 6. Sen Gupta, Arjun (2007) “Report on conditions of Work and Promotion of Livelihoods in the Unorganised Sector” published by Dolphin Pinto Graphics. 7. Todaro, Michael P. (1970) WEBLIOGRAPHY 1. “Informal Sector in India” http://labour.nic.in/ss/InformalSectorinIndia-Approachesforsocialsecurity.pdf. Accessed on 3rd August. 2. “Informal Sector and Informal Workers in India” http://www.iariw.org/papers/2009/5a%20naik.pdf. Accessed on 1st September.