My Views

India UnIncorporated

Posted in Reality Check by dullar on April 23, 2007

Look at the figures below and you will be startled at their magnitude itself.(With Inputs from Hindustan Times feature, HT Research)

  • Total workforce in India (this includes persons beween 15 years to 60 years officially) — 457 million.
  • 92% of this workforce, that is, around 420 million is in unorganised sector, that means they are either not registered or in do not maintain a taxable account of their business.
  • 98.5% of the workers in the unorganised sector, that is, about 414 million workers are not covered under any social security scheme officially. Just imagine the kind of business insurance sector can do in this area.
  • 98% of the total enterprises in India are in the unorganised sector.
  • 60% of the GDP of India comes from this so called unorganised sector.
  • It accounts for 67% of India’s total savings.
  • Government of India annual Survey of Industries estimates that though the number of unorganised manufacturing enterprises is 130 times than that of organised enterprise, its average value added per worker is six times less than that of formal sector.
  • In last two decades or so, over 90% of India’s new jobs have been created in the unorganised sector.

In most general terms, informal of unorganised sector involves hawkers, marginal service provides, domestic workers, and family enterprises etc. Most of the business done in this area is not covered under any official credit schemes. In majority of cases, they are financed by local money lenders, who exploit the conditions of workers, which itself has been a big concern for the unrest in unorganised sector. Poor skill set, poor credit facilities, poorworking conditions, unregulated wage rates, non existant social security are the issues which have long bogged down the overall potential of this sector.

Till date government is not been able to draft a Comprehensive Unorganised Sector Social Security Act. Most of them have failed to draw a consensus from the law makers. The major reason for this is that unorganised sector workers have no political voice at any level and the enforcement of some already existing schemes, laws, and acts are next to none.

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