The Unorganised Sector Issues And Concerns Essay Example for Free

The Un nonionic Sector Issues And Concerns EssayProblems of DefinitionThe bulk of the Indian poke crash is use in what is loosely referred to as un make welkin. Most of them argon neither organize nor hive any access to social security. Their workout is unprotected, their issue ar extremely impression, and a large section of them live under conditions below the poverty line. The developmental efforts by the state have d angiotensin-converting enzyme weeny to improve their hold coalitions. This is a matter of concern non only for the raft sodalitys but also for every rational person in this field. delimitate the term un set up bea is a difficult task indeed. Apart from the conceptual difficulties, the definition also depends on who is defining it and for what purpose. There argon broadly three different usages of the term. Firstly, the government plan documents m-id demographic surveys extensively use the term. According to this usage, the unstructured heaven s is defined rather negatively, is comprising of the restriction force that go outside the nonionised sphere of influence.The organised domain is defined is the one covering labour force employed in all the enterprises in the public sector and only the non-agricultural establishments in the private sector employing 10 or more workers The criterion of 10 is derived from the Factories Act, which covers all the establishments employing 10 or more people. This definition though indicative of the structure of enjoyment fails to qualify each sector, and therefore leaves many questions unanswered. It nonetheless serves the purpose of government planning and projections. Given the fact that unorganised sector accounts for more than 90% of the labour force in the country, the inadequacies of this definition as reflected in the statistical data, appear to be marginal, even though in existing ground the numbers may be very lofty. some other governmental source, which defines the uno rganised sector, again for statistical and administrative purposes, is that of the Central Statistical Organisation.According to this definition, the unorganised sector includes all those unincorporated enterprises andhousehold industries (other than the organised ones) which be not regulated by any legislation and which do not maintain yearly accounts or balance sheets. This definition also serves the limited administrative purposes, and does not qualify the sector. In any case, both the above definitions argon based on the existing legal framework, whether concerning labour or business establishments, and are therefore liable to change with every change in legislation. Therefore, these definitions are hardly equal tools for social analysis. The second source of definition of the term unorganised sector is literature in the economics discipline. Economists have tried to define this sector in terms of the organisation of capital, temper of products, technologies used (traditional or modern), the markets served (local anesthetic or general) or the consumers of the products (rich or poor)The thesis has been that the unorganised sector is characterised by low technology that it caters to local markets and to consumers who come from the lower segment of the society. There are many difficulties with this definition too. Bannerji argues that attempts at clearly delineating the character of the unorganised sector have not been winning because such(prenominal) clear-cut demarcation is not universally valid. The exact combination of activities that actually exist in any one region at a given time, seem to be an outcome of the interaction of various factors such as complexity of the economy, the actual extent and statistical distribution of control of investment resources and the technical choices available to that economy. Since the configuration of such factors is just about always specific to each situation, what is true of one country at one time, fails to appl y to another Attempts to contend the two sectors on the basis of products, markets and technologies have a severe limitation, because of the extensive linkages that exist among the sectors, very often the organised sector victorious prefer of the low cost operation in the unorganised sector to manufacture its own products which are for general market.Moreover, bulk of the export goods are manufactured in tile unorganised sector through a systematic decentralisation of the production process and the putting-out system. The third usage of the term unorganised sector is by the trade unions and those concerned with labour. The attempt made by Nirmala Bannerji comes under this category of usage of the term. According to her, the unorganised sector usually consists of productive activities withloosely formed groups bound by diverse types of informal working contracts. It includes a section of the self-employed, wage earners, family producers as also household workers. The significan ce of this definition is that it brings in the nature of work relationship as the main factor that distinguishes organised from the unorganised sector. The unorganised sector consists of productive activities carried out by loosely formed groups which are bound by informal contracts. Even though Bannerjis definition brings out the most of import characteristic feature of the unorganised sector, from labours head word of view, pass on exploration is required to get an insight into the complexity and the diversity of this sector.There are sure(p) fundamental difficulties in using the existing categories of organised sector and unorganised sector for trade union purposes. Trade unions by their very nature are radicalally concerned with protecting labour from exploitation and whimsey of whoever employs them. If labour Protection is taken is the basic criterion of the trade unions, then organised and unorganised cease to be homogeneous categories, because we find unprotected labo ur in both the sectors. Even though the unorganised sector accounts for the majority of them, even the organised sector has its own share of unprotected labour in the form of casual, contract, badli, and temporary workers whose employment conditions are similar to those in the unorganised sector. One may argue that the proportion of the unprotected labour in the organised sector is very marginal.This is however not true, because, during the eighties there has been a gradual decline in permanent employment accompanied by a sharp rise in the casual employment. A recent survey of seven major industries, commissioned by Friedrich Ebert Foundation in 1991, reports that during the eighties, in almost all the industries the proportion of casual and temporary employment has increased phenomenally, ranging between a quarter to nearly half of the summate workforce. The National Sample canvass data also show a similar trend. According to this data, in the organised sector, the employment gro wth rate has declined from 2.48 per cent during 1977-78 1983 to 1.38 per cent during 1983 1987-88. In the organised manufacturing sector, particularly, employment had virtually stagnated during 1983- 1987-88. Given the above trends, from the trade union perspective, it would be fallacious to characterise organised sector as the protected sector, and the unorganised sector as theunprotected sector.Apart from these conceptual difficulties, very often, among the trade union circles, there exists confusion between the terms unorganised sector and unorganised labour. many use these terms synonymously, even though there is a substantial difference between the two. While the former refers to the unorganised part of the industry or the whole economy, the latter refers to workers who are not organised as trade unions. It is true that the bulk of the labour force in the unorganised sector is not organised, but at the same time there are also unorganised workers in the organised sector. Simila rly, there are also some workers inwardly the unorganised sector, as we shall see, who are organised as trade unions.From a purely trade union point of view, it may be more enamor to use the terms protected sector and unprotected sector which cut across both organised and unorganised sectors. However, it would be impossible to totally revoke the terms that are currently in use because the entire edifice of the statistical data is built on this foundation. Nonetheless, it would be useful to be sensible of the inadequacies of the existing categories. One needs to be, particularly, careful plot interpreting the official data. outwear in the Unorganised SectorKeeping the above mentioned definitional problems in view, allow us now examine the salient features of the labour force in the unorganised sector as reflected in the official data. According to 1991 census, the total labour force in India is estimated to be 317 millions. Out of this, the organised sector employs only 26.8 mi llions (8.5 %), while the unorganised sector employs as many as 290.2 millions, (91.5 %) (See Chart 1 and Table 1).Pension scheme for agricultural labourers all over the country. As discussed earlier, the peculiarity between these two sectors is very crucial from the point of view of employment relationship. It is not clear from the census data whether the figures for the organised sector employment include the casual / contract workers also. If it does, then the proportion of the protected labour allow be less than 8.5 per cent. While the majority of workers in the organised sector hive regular salaried jobs in the registered factories and service establishments, the workers in the unorganised sector are either self-employed or work as casual wage labourers in a wide range of sectors both non-agricultural and agricultural. The crucial distinction between the sectors is the nature of employment relationship. Going by Bannerjis definition cited earlier, the unorganised sector incl udes agricultural labourers, construction workers, forest workers, fish workers, beedi workers, workers in footling and tiny industrial units, powerloom and handloorn workers, self-employed workers, domestic workers and so on.If we use the term unprotected sector, then the list also includes all the casual / contract workers employed in the organised sector. Technically, labour laws do not differentiate between organised and unorganised sectors. However, in practice, they provide ample opportunities to the employers and their contractors to deny basic rights to certain categories of workers. As we shall see later, there are certain structural problems, which make, it difficult for workers to assert their rights. In the organised sector, for instance, the production strategies such as subcontracting, ancillarisation, etc., are inherently geared to by-pass the protective legislations. As a result, over the years, the proportion of casual and contract labour hasbeen increasing in alm ost all the industries in both private and public sector. An important characteristic feature of the unorganised sector is that it employs a large number of women.The relative proportion of fe virile workers is very high in this sector. As shown in Table 1, only 4.2% of the total feminine workers (as defined in Census) are in the organised sector. The corresponding percentage for male workers is 10.2%. The difference is rather striking if we look at the absolute figures. As against 23 million male workers there are only 3.8 million female workers in the organised sector. That is, for every six male workers there is only one female worker. In contrast to this, in the unorganised sector, there are 86.8 million women workers against 203.4 million male workers. That is, there is one woman worker for every two and odd male workers. Table 2 shows the sex distribution in both the sectors. In the organised sector, women constitute 14.2%, whereas in the unorganised sector they constitute 30 %.In terms of wages and earnings, there exists a substantial difference between the organised and the unorganised sectors. Table 3 shows the aggregate figures for the year 1981. Out of the total annual income of Rs.87,840 crores, the self-employed workers take in Rs.44,719 crores (50.9%,) while the wage and salary earners earned Rs.43,121 crores (49.1%). Within the wage earners category, the organised sector accounted for Rs.24,850 (28.3%) while the unorganised sector accounted for Rs.18,271 crores (20.8%). If we look at overall sector-wise figures by cartel self-employed and the wage earners in the unorganised sector, we would get the broad picture of earnings in the unorganised sector in contrast to those in the organised sector. The unorganised sector accounts for 71.7 per cent of the total earnings in comparison to 28.3 of the organised sector.The organised sector workers, even though account for only nine-tenth of the total workforce, earn more than one-fourth (one third acco rding to the latest figures) of the nations total wages and incomes. The figures of the average annual income per worker bring out the contrast between the sectors more sharply. While the organised sector worker earned Rs.10,851 per annum, the wage earner in the unorganised sector earned Rs.2,482 and the self-employed person earned Rs. 3,549. If we take the average of the unorganised sector as a whole, the figure would be much lower. These figures are for the year 1981, and the present figures in actual terms may be relatively higher.Issues and ConcernsThe primary concern regarding labour in the unorganised sector is that most of them live below the poverty line. Their access to the basic necessities of life such as food, clothing, shelter, education, health and other forms of social security is extremely poor. One of the major reasons for this is that they are not organised. They lack organisations which can effectively represent their issues and problems at the national level. Th e established trade unions in the country, including the left unions, have completely neglected this sector. This is reflected in the membership figures of the central trade union organisations. According to the latest verification of membership conducted by the central government in 1990, the membership of the top five unions is close to 10 millions, which is roughly around 3 per cent of the total working population in the country. Even though this includes both the organised sector as well as the unorganised sector, the proportion of the latter is very insignificant.For example, according to 1980 figures, the INTUC, which at that time was the largest union, had only 15 unions in the agricultural sector with a membership of 25,931, which is slightly more than one per cent of its total membership of over 22 lakhs. Similarly, CITU hid only 14 unions with a membership of 2,212, which is less than one per cent of its total membership of over 3 lakhs. There are, of course, certain str uctural difficulties in organising workers in the unorganised sector. Unlike in. the organised sector, the existing conditions are not conducive to the surgical procedure of trade unions. In the organised sector, that is, in large factories and other establishments, collective enormous dealing institutions are well developed and trade unions are accepted as legitimate organisations representing workers. In other words, the kernel of bark for better wage and working conditions are institutionalised. This is however not the case with the unorganised sector. The following are some of the problems at the very fundamental level in this sector.1. Employment regulationIn the unorganised sector the primary issue is regulation of employment. This is a very difficult task for unions to achieve. The employment contract is unwritten and informal. Workers are at the mercy of the employer. Giving an appointment letter is unheard of in this sector. By making the very employment relationship in formal, the employer keeps himself out of the statutory obligations. Workers in order to make any legal claim have to first place the employer and establish the employment relationship. Quite apart from these legal problems, since workers depend on the employer who may be a contractor or a middleman or the principal employer himself, for their sustenance, they dare not take recourse to legal action. This problem is more acute in the case of migrant workers, for instance, in the construction industry. Another means of bypassing a formal employment relationship adopted by trader-merchant-manufacturer is to utilise the home-based family labour.The so-called self employed workers in beedi, carpet, handloom, coir, hosiery and a boniface of other industries, come under this category. The trader-merchant-manufacturer or his middlemen provide the raw material to the home-based workers and collect the semi-finished or finished goods which they market themselves. The price that the workers get for their value-addition is very low and equivalent to wages, and their living conditions are no better than the wage labour. So, the self-employed who constitute nearly 56 per cent of the total workforce in the country are not really self-employed in the true sense.In the absence of a formal employment relationship the established trade unions, which are more used to functioning in the organised sector where all that they have to do is submit charter of demands and negotiate a reasonable bargain for the workers, find it extremely difficult to fight for workers in the unorganised sector. Trade union work in the unorganised sector is much more demanding and relates to certain structural changes of very fundamentalnature which requires struggle at various levels. The means and strategies to be adopted for achieving these changes also differ very much with those that are adopted in the organised sector. The following are the three different levels at which the trade unions in the u norganised sector have to fight. Grass- understructure Level Labour Courts Political LevelAt the grass-root level, as mentioned earlier, it is very difficult to identify a single, consistent employer to deal with. As a deliberate strategy, contractors keep ever-changing from time to time in order to avoid any legal binding. Also, at times, workers themselves move from one workplace to another. In certain cases such as domestic workers, unions have to deal with multiple employers who are not concentrated in one place but scattered all over. Given such a wide variation and the fluid state of employer-employee relationship, unions in this sector have to evolve innovative strategies to fight for the basic rights of their members. The second level of struggle is in the labour courts. Since the employer-employee relationship in this sector is not institutionalised, the disputes invariably end up in litigation.For instance, in case of contract workers in the organised sector much of the tr ade union work involves fighting court cases, which demands not only determination on the part of the unions but also resources. This is one of the major reasons why the unions of the workers in the organised sector turn a blind eye to the plight of the contract and casual workers. The third and the most important level of struggle is at the political level for policy changes and enactment of protective legislation by the government. This requires the unions to have a wider support base united with political campaigns.2. Lack of trade union consciousnessIn this sector the very idea of trade union organisation is new. Due to their insecure employment situation, workers are not always forthcoming to participate in the union activity. The unions have an extremely difficult task of gaining the confidence of workers to begin with, and then convincing them -about the importance of dealing with their employers collectivelyrather than as individuals.3. Struggle for legitimacyIn the unorga nised sector, the basic struggle of the trade unions is for legitimacy of their own instauration and freedom to function as trade unions. They are confronted with hostile employers whose basic advantage in operating in the unorganised sector is its unregulated employment and availability of cheap labour. Since trade unions by their very nature fight for regulation of employment, better wages and social security measures, they strike it the very root of this advantage. This results in a bitter conflict in which very often the trade unions are at the receiving end. Given such hostility to any form of trade union activity in this sector, the union activists have to find various means of obtaining legitimacy.Where hostility is very high, the activists function only as a voluntary organisation. As the situation improves they start functioning both as a voluntary organisation as well as a trade union simultaneously. Since, by definition, these two types of organisations have different le gal status the activists function as either, depending on the need and circumstance. Such a strategy is essential in order to continue the organisational effort in a hostile environment.4. Issues related to development policyTrade unions in the unorganised sector are confronted with not merely employment and wage issues, but also are forced to raise certain fundamental issues related to developmental policy. This is so because, in various sectors, such as fisheries, forestry, agri refining, etc., the workers directly depend, on natural resources for their livelihood. Governments development policy has a direct bearing on their lives. For instance, the forest workers, who have for generations lived in forests and enjoyed certain customary rights over forest resources, are now confronted with modem developmental agencies such as state corporations which have drawn boundaries within the forest plain depriving them of their traditional rights, and in many cases even displacing them. Th e local people depend on forests for fuel, fodder, and material to build their houses.The forest corporations which were created with the explicit purpose of directly taking up commercial activity related to forest resources, and thereby replacingthe middlemen who had been exploiting the forests, have, in reality, deprived the local peoples access to the forests. Another example is that of fish workers living near and around Chilika Lake located in Orissa on the eastern coast. Thousands of fish workers for generations hid depended on this lake for their livelihood. But now, with government leasing out the lake to private entrepreneurs for developing prawn culture for export, these workers have been debarred from fishing in the lake. Such issues, related to the governmental policy can be taken up only at the national level, which means that there should be a national level organisation to represent the interests of the unprotected workers in the unorganised sector. Today, unfortunate ly, such an organisation does not exist.5. Lack of visiblenessLastly, the workers in the unorganised sector lack visibility at the national level. In contrast to workers in the organised sector, their working conditions and problems hardly ever deform subjects of national give. This is best illustrates by the fact that the primary focus of the New Economic Policy is the organised sector. The question of exit policy has generated a great deal of debate, and become a politically sensitive issue. It is a different matter whether the government is genuinely concerned about the retrenched workers in the organised sector. The point is, in the unorganised sector, which employs more than 90% of the total workforce in the country, redundancies and retrenchments are a daily affair. Ironically, this issue has never merited a debate or discussion either in the media or in the trade union establishments.SourceUnprotected Labour in India Issues and Concerns by Sarath Davala (ed.) Friedrich Eb ert Stiftung, 1994, pp1-13.