93% of India’s workforce is in the unorganised sector, with little to no access to any social security or job protection.
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‘The economic issues are most vital for us, and it is of the highest importance that we should fight our biggest enemies: poverty, unemployment,’ India’s third Prime Minister Lal Bahadur Shastri once said, emphasising that poverty and unemployment were the nation’s greatest challenges.
As we reflect today, India is facing the highest unemployment rate in 45 years, with over 800 million people relying on the National Food Security Act. The challenges of poverty and unemployment are largely linked to access (geography) and low wages. Despite ongoing debates about unemployability and a skill-deficient education system, the core problem today seems to be the inability to create jobs seamlessly in both organised and unorganised sectors.
According to data from the Ministry of Labour and Employment, 93% of India’s workforce is in the unorganised sector, with little to no access to any social security or job protection. Additionally, 18.3% of workers are unpaid, and 57.3% of the total workforce is self-employed. Even as the jobs in the agriculture sector are shrinking, employment in the unorganised sector remains high, making the argument that unorganised sector jobs will eventually transition to the organised sector appear increasingly unrealistic.
Both the Union and state governments are slowly acknowledging that organised sector jobs are not growing as fast as expected. The slowdown in manufacturing and the new-age economy are not creating many organised sector jobs. No significant legislation or policy has been enacted to address the issues facing the unorganised sector workforce, who have long been deprived of basic benefits such as social security, health insurance, upskilling, housing, and financial inclusion.
The Covid-19 crisis was a wake-up call. It exposed how vulnerable unorganised sector workers are, facing serious workplace challenges and unmonitored low wages. These 437 million workers, who contribute 50% to India’s GDP, remain voiceless.
In a tactical move, on the eve of Independence Day this year, the Karnataka government’s labour department announced ID cards and a basic social security scheme for workers in the unorganised sector across 23 different services, potentially covering over six million people.
Labour Minister Santosh Lad acknowledged that “a lot more must be done, and issuing ID cards is just the first step to officially count the workforce that has been deprived of employment benefits, and as and when the unorganised sector board is able to generate revenues in the form of cess from various departments through strategic policy changes, we can improve the working conditions, provide social security, healthcare, and most importantly, work towards a financial inclusion framework.”
The new-age platform economy is creating more jobs in the unorganised space, with over 15-16 million workers. The gig economy powered by the digital delivery platforms is fast growing. Due to the very nature of the gig economy, workers have little access to employment benefits that the organised sector workforce enjoys. Even as states like Karnataka are pushing for legislation for gig workers, there is resistance from several digital delivery platforms to work towards creating welfare schemes for the gig workers.
Like many other countries, India is rapidly moving towards employment generation and economic growth in the unorganised sector, and to address the workforce and workplace challenges, a comprehensive policy and legal framework is needed. Registration in e-Shram, PMSYM, and other portals with extensive publicity and issuing cards is becoming a public relations exercise, and the unorganised sector workers who have been subjected to various registrations over years believe that these multiple registrations make no difference in their lives. So, what is needed is an extensive outreach and a robust process to identify, validate, count, connect, and provide benefits, training, welfare, and healthcare schemes on a war footing basis.
Currently, the claim of economic growth and job creation is like ‘building faster cars and getting a ticket for speeding on a bad road.’ It throws open the fact that we are setting wrong priorities, overregulating, underprepared, and failing the youth of the country.
The intervention of state and Union governments will help bring an organised policy to assess the composition and count of the unorganised sector workforce. Higher budgetary allocation for social security, healthcare, financial inclusion, incubation centres, and upskilling programmes to enhance skills with guaranteed opportunities in the domestic or international job market can fix India’s unemployment crisis in the mid-term and long-term.
(The writer is member, Karnataka Building & Other Construction Workers Welfare Board)