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Book Review
The informal sector
M. VIJAYABASKAR
REPORT ON CONDITIONS OF WORK AND PROMOTION OF LIVELIHOODS IN THE UNORGANISED SECTOR: Arjun K. Sengupta; National Commission for Enterprises in the Unorganised Sector, Government of India, Academic Foundation, 4772-73/23, Bharat Ram Road, Daryaganj, New Delhi-110002. Rs. 995.
That 93 per cent of the total Indian workforce is employed in the informal economy at low wages and with few social security measures is a grim reminder of the state’s inability to intervene positively in the bulk of India’s labour market. The growing informal nature of work in India in recent years and the consequent worsening of work conditions have put the informal economy at the centre stage of developmental intervention.
The National Commission for Enterprises in the Unorganised Sector was constituted in 2004 by the UPA Government to address the set of constraints to improve the quality of work and to recommend possible policy measures in this regard. Along with the formulation of the National Rural Employment Guarantee Act, the Commission’s work constitutes a major policy move in this area. Since its constitution, the Commission has published a series of reports on various dimensions of work and employment in the Indian informal economy, this book being the fourth.
This Report, as the title suggests, deals with the conditions of work and suggests possible means to improve.
The Report has to be commended above all for putting together the various data on work in the informal economy from a range of sources to map the magnitude and the challenges involved in addressing the quality of work in this sector. The Report skilfully makes use of case studies and qualitative information to back the narratives emerging out of quantitative data analyses.
One of the important observations made by the Commission that nearly 77 per cent of India’s workforce survives only on Rs.20 a day as wages goes to show that mere economic growth does not translate into development, a postulate that seems to drive the larger macro policy regime. The number of people employed in the informal economy has in fact increased from 811 million in 2000-01 to 836 million in 2004-05, a period when growth rates of the Indian economy registered an all time high. Any serious intervention will therefore have to take on board the links between such immiserisation and growth.
Types of informal work
The Report charts out in remarkable detail the various types of informal work: self-employed, those working in household enterprises, casual workers in bigger enterprises and so on. The Report points out that nearly 65 per cent of workers in the informal economy are self-employed and not wage earners. Nearly 75 per cent of such informal enterprises have stagnated or contracted their scale of operations. To improve the living conditions of those self-employed in such enterprises, the Report suggests access to credit, marketing and skill development as prime modes of policy support.
A separate chapter on women workers, both working in own account enterprises and in waged employment brings out both the pervasive gender based segmentation in the labour market as well as intra-gender differences due to caste and religion.
Observations on the agricultural workforce too are striking. Apart from the meagre returns to agriculture, the Report highlights the high share of income from wages for even the small and marginal peasants. Since nearly 50 per cent of the farming community own less than one hectare of land, many in this category take up waged work as well to supplement their farm income. The Report also discusses the rise of new forms of labour regulation like global codes of conduct and the limitations of such voluntary codes in the absence of more comprehensive institutional mechanisms.
Improvement
If the pre-existing legal norms for conditions of work are not followed in most cases, what are the means by which they can be ensured? The Report suggests a number of measures to improve the conditions of work, cutting across different types of employment and for specific segments of workers like home workers, women workers and marginal farmers. They range from constituting a national minimum wage to measures to improve the capability of enterprises in this sector. While the Report does emphasise the need for institutional innovation to ensure proper monitoring, it doesn’t give it the attention this aspect deserves.
The Report also does not quite discuss the relationship between the current policy regime and working conditions, the relationship between informal work on the one hand and growing corporatisation on the other, a critical domain but too controversial for a government report to address.
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