Article regarding unorganized sector, Titled “Once in a Hundred Years opportunity”

Article regarding unorganized sector, Titled “Once in a Hundred Years opportunity”

In last few decades the whole world was coming together and the globalization, global cities and global citizen have started becoming common parlances. But the situation changed completely when last year Coronavirus came and with no medicine or vaccine only solution that the humankind was able to understand was to cut all physical contacts and get ourselves locked inside our homes.The countries which were slow in adopting these measures saw a rapid spread of virus and lost thousands of people in few weeks.

The everyday vocabulary got changed with everyone thinking and talking ‘lockdown’, ‘social distancing’ and ‘stay home’. Everything came at stand still and because of which this health crisis soon became an economic crisis also. Faced with a choice between lives or livelihood, most of the countries chose life. The situation brought on the surface many phenomenon that were till now hiding under the carpet came on the surface. In India, millions of migrant workers having no means to live with and no transport available, walked to their villages. It was not the case that state was not trying to help them out, just few days after imposing country-wide lockdown,packages and measures were announced to help the poor and needy but these measures remained largely ineffective because these workers were working in unorganised sector, that simply means, they were working in those occupations, those firms or in those working conditions that despite of making a visible contribution of more than 50 percent to Gross Value Addition (GVA)1 and they were not there in the government’s data base. So, it was not possible for government to have scheme or way to transfer the benefits.

It is really an unfortunate situation that the unorganised sector comprises of around 90% of total Indian workforce i.e., it provides work to not less than 36 Crore of workers, visibly, and to numerous other invisibly -as it is well-known that fact that the official accounting fail to capture the correct picture of the economic activity-remains largely ignored. For example, according to estimation in Delhi alone there are around 19,000 establishments that are known and so they are on the paper but along with them there are equal number of establishments that appears nowhere but provides livelihood to almost equal number of people. It was the workers of the unorganised sector who felt the pandemic severely as a report published in August-2020 suggests COVID induced lockdown resulted in unemployment for 80% of the informal workers2.

So even though the government was quick enough to announce the Gareeb Kalyan Yojna and expand the Public Distribution system that helped the poorest of the poor in the country to cope with the impacts of the lockdown but in the meantime the pandemic has brought to surface the short comings of our economic infrastructure, especially one the estimation of the size of unorganised sector and its contribution. And again during this recovery phase in which the gap between those with better employment who came out from the lockdown with a better balance-sheet as consumption shrunk but not the income and those who came out worse as income opportunity disappeared and faced with conditions of starvation used their little wealth or accumulated loans for making the ends meet widening3 this same organised and unorganised sector debate is being played out, all agreeing that we need to pull workers from the unorganised sector by creating more formal jobs and deliberating that what rate of growth will be sufficient for this.

But the story so far indicates that the growth centric approach that treats employment as by-product of growth is not going to help the poor. During the decades India grew at its fastest speed it also witnessed no increase in employment, a phenomenon of jobless growth. There are many reasons like the very nature of the global value chains in which the lead firms makes profit largely because of the workers working in poor conditions, preferences given to the small-enterprises in the early years since independence, the archaic labour laws of India that compel enterprises not to hire many labours leading to missing middle,India’s poor performance in manufacturing, and so on that are being given for why India failed to create jobs in general and formal jobs in particular.For the current government it may be a point of satisfaction that the Economic Survey of India -2019-2020 has already pointed out that formalisation has increased to 9.98 percent. But the larger picture remains moreover the same.

Looking at the experiences of last 70 years we are of strong view that the India has always been an informal economy, it is the way Indian do carry out their economic activity, the western notions of formal jobs doesn’t fits with India. We do not categorically reject the creation of formal jobs or the formalization exercise but underlining the fact that the unorganised sector is too large what we argue is that instead of focus solely on the creation of formal jobs the focus on making informal jobs better and provide them with the facilities of the formal ones will work better i.e., the concern should be to improve the working condition of workers in the unorganised sector and provide them benefits and securities at par with their colleagues in the organised or formal sector. Here it needs to be appreciated that the Government has through legal provisions and targeted schemes tried to alleviate the woes of these people. Several schemes like Pradhan Mantri ShraYogi Mandhan Yojna, Pradhan Mantri Jan Aargoya Yojana etc. among many others are welcome steps. But the real picture will emerge only when these policies get properly implemented. The government should shift its focus from merely policy making to implementation issues and strengthen the machinery for the same and ensure better effective governance only then the promised benefits can reach the intended beneficiaries.Even the new labour codes have many very well-intended provisions but the gaps remain, for example many well-meaning legal provisions, of Occupational Safety, Health and Working Conditions code become in effective for unorganised sector workers as most of them are governed by thresholds and unorganised sectors hardly ever qualify for them.

The pandemic took a great toll, it caused extreme hardships but at the same time it has brought the unorganised sector workers on the forefront, it is an once in hundred years opportunity for the stakeholders–governments, trade unions, NGOs working for them, policymakers and analysts, and the workers themselves -to make sure that, one,the contribution of the unorganised sector workers get formally recognized,second, the debate remains centered on the issues that really matters and,third,a robust policy and implementation mechanism get placed before everything come back to normal and the time push themin the backyards once again.

(1)Murthy SV Ramana(2019); Measuring Informal Economy in India

(2)COVID-19 lockdown cost 80% informal sector workers their Jobs: Survey, Down to Earth, 13/08/2020

(3) In economic circle this is being termed as K-shaped recovery.

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