UNIT 10 UNORGANISED LABOUR (RURAL AND

URBAN)
Structure
10.1 Introduction
Aims and objectives
10.2 Profile of Rural Labour
10.3 Problems of Rural Labour
10.4 Measures for Rural Labour
10.5 Profile of Urban Unorganised Labour
10.6 Problems of Urban Labour
10.7 Measures for Urban Labour
10.8 Summary
10.9 Terminal Questions
Suggested Readings

10.1 INTRODUCTION
“The labourer has to realize that labour is also capital. As soon as labourers are properly
educated and organised and they realize their strength, no amount of capital can subdue
them. Organised and enlightened labour can dictate its own terms. It is no use vowing
vengeance against a party because we are weak. We have to get strong. Strong hearts,
enlightened minds and willing hands can brave all odds and remove all obstacles.”
Mahatma Gandhi
In India, unorganised labour refers to that vast segment of the labour force that has
remained unprotected even after six decades of planned development. It includes agricultural
labourers; low paid labour in small manufacturing and services in rural and urban areas;
casual labour; handloom and power-loom workers; bidi and cigar workers; sweepers and
scavengers; and others like rag-pickers, self-employed and small professionals like
electricians, plumbers etc. If agricultural labour is taken out, the rest of the categories of
unorganised labour could be classified together as ‘informal sector labour’, much of it is
found in urban and semi-urban areas.
The nature of labour force in a developed country differs in several respects from that
of a developing country like India. In developed countries, it is more organised and such
labour enjoys all social security benefits ‘from cradle to grave’. The labour force is also
highly educated and productive. But in developing countries like India the labour force
is highly unorganised, unskilled and unprotected. As a result, the earnings, the terms and
conditions of employment and other social benefits are not available to the vast majority
of the labour force that is rightly termed as unorganised.
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India’s total labour force has been increasing continuously along with the population.
Labour force includes the unemployed. The following table (Table 1) gives the growth
of labour force over a period of time:
Table 1: Labour Force in Million person Years (CDS basis)

Year 1983 19993-94 1999-00 2004-05

Population 718.10 893.68 1005.05 1092.83
Labor Force 263.82 334.20 364.88 419.65
Employed 239.49 313,93 338.19 384.91
Unemployed 24.33 20.27 26.69 34.74

Sources: Economic Survey February, 08 : 2007-08. Table 10.9. CDS=Current Daily Status)

It should be noted that the figures for unemployed have shown a sharp increase in 2004-
05 compared to those for earlier years.
In the Indian labour market, the unorganised labour constitutes an overwhelming majority
of the labour force. For example, in the year 1999-2000 the total employment constituted
397 million persons. Out of this, only 28.11 million persons were employed in the
organised sector which constitutes approximately only 7% of the total employment. Thus
93% of the employed are in the unorganised sector. Even within this organised sector,
over two-third employment is in the public sector. Under the post-1991 globalisation
policies, organised employment in the public sector has been falling as a result of
government’s gradual withdrawal from the business sector. During the period 1994-2005,
the rate of growth of employment in public sector was negative (-0.70% per annum)
which brought the total organised sector employment growth rate to a smaller negative
rate of -0.31%, in spite of a positive growth rate of 0.58% in the private sector. In other
words, a vast 93% of the workforce is the unorganised sector and therefore, there is
an imperative need to concentrate all public attention on this unorganised sector.
The unorganised labour, whether urban or rural, has always remained at the bottom in
getting the benefits of development. It is not a beneficiary from the high growth rate
experienced by the economy since 1990s. As the empirical evidence shows, we have
been having a ‘jobless growth’ both in terms of quantity and quality of employment. The
unorganised labour constitutes child workers, poor women workers, bonded labour,
contract labour etc., who have been facing exploitation in the labour market. The position
of women in the unorganised sector has been very poor and vulnerable. The ‘Shram
Shakti’ Report (Ila Bhatt Commission, 1988) has brought out comprehensively the nature
of self-employment of women and their poor working and living conditions.
The fluctuating nature of employment in several sectors of unorganised labour is a major
problem. In rural areas many occupations including agriculture are seasonal and highly
dependent on the monsoon. The failure of the monsoon creates enormous problems for
agricultural labour and small farmers who are all unorganized because of seasonal
unemployment. Even in urban areas, when business and industry face a ‘downturn’ or
recession, employment is adversely affected. The variations throw a section of organised
labour into unorganised sector and during ‘boom’ times there are shifts of labour from
unorganised to organised sector of the economy.
Unorganised Labour (Rural and Urban) 123

Aims and Objectives

This Unit would enable you to:
 describe the nature and magnitude of the unorganised labour in the country.
 profile rural and urban unorganised sectors and the measures taken to benefit them.
 identify the tasks involved in developing the unorganised labour.

10.2 PROFILE OF RURAL LABOUR

India has often been referred to as a country of villages. At the time of independence
in 1947, agriculture was the main occupation with over 70% of population depending on
agriculture and more than half of India’s GDP came from the primary sector. Majority
of the workforce depends on this primary sector and the sector has not changed much
as the following discussion would show.

10.2.1 Nature and Magnitude of Rural Labour

Rural labour includes agricultural labour; rural artisans, craftsmen, educated science
graduates and technically qualified persons to deal with agricultural implants and technology;
various agricultural and manual labour and ‘own account establishments’ with family
labour. Agricultural labourers include small and marginal farmers constituting an overwhelming
section of rural labour. As the economy has been developing over a period of time and
more rapidly since 1991, the share of agricultural labour in the total employment has been
falling but continues to be the majority of the total labour force.
Table 2: Sectoral Employment shares (by CDS) (percentage)

Industry 1983 1993-94 1999-00 2004-05

Agriculture 65.43 61.02 56.64 52.08
Mining+Quarrying.. 0.66 0.78 0.67 0.63
Manufacturing 11.27 11.10 12.13 12.90
Electricity,water,gas 0.34 0.41 0.34 0.35
Construction 2.56 3.63 4.44 5.57
Trade/hotel/Restaurent. 6.98 8.26 11.20 12.62
Transport/Storage/communication. 2.88 3.22 4.06 4.61
Other services 9.88 11.58 10.52 11.24
Total 100.00 100.00 100.00 100.00

Source: Economic Survey February, 08 : 2007-08 Table 10.10

As seen from the above table, the agricultural labourers were 65.43% of the workforce
in 1983 and have been reduced to 52.08% in 2004-05. The share of the agricultural
labour keeps falling as the economy moves to a higher growth path. However in
advanced economies this percentage is less than 5% which shows that India has a long
way to go in reducing the dependence of labour on agriculture.

10.2.2 Socio-economic conditions

The socio-economic conditions of rural labour are still highly deplorable. Access to
drinking water was not available to 10% of the households in 2001 for India as a whole
and in case of rural areas it was much worse with about 27% of households, constituting
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poor labour had no access to drinking water. Many of them do not have adequately built
houses.

10.2.3 Type of Employment

In India the rural employment falls into three categories: self–employment, regular/salaried
employment and casual employment. Obviously, regular and salaried employed enjoy
relatively better life with access to social security like regular wages, provident fund,
medical benefits etc.
Table 3. Distribution of workers (Usual status) by category of employment
in rural areas (Percentage)

Year Self-employment Regular/salaried Casual

1977-78 62.6 7.7 29.7
1983 61.0 7.5 31.5
1987-88 59.4 7.7 32.9
1993-94 58.0 6.4 35.6
1999-2000 56.0 6.7 37.3

Source: Various NSSO Rounds

Only a small section of 6-8% of the rural workforce gets regular salaried employment.
Majority are self-employed as they opt for it as a last resort to livelihood. A large section
is causal labour that has a little better job and income security.

10.2.4 Literacy
The level of literacy and skills are low among rural labour. The general literacy rate
according to 2001 census was 65.4% and still lower in rural areas. It is reported that
in 1999-2000, only 2% of rural workforce was “professional & technical and related
workers’ and 1.4% constituted of ‘administrative, executive and marginal workers.’ The
corresponding figures for urban areas are much higher.

10.2.5 Vulnerable Sections

The rural labour also includes bonded labour whose poverty and indebtedness has kept
them under the clutches of rich farmers and landlords. It has been legally abolished, but
the position of labour freed from bondage continues to be adverse compared to other
labourers. Child labour exists inspite of several local, national and international measures
taken to abolish it. The chief impediment is the poverty of the parents which is also
attended to, but a solution appears to be a long-term one. There are also artisans,
craftsmen and others who work in forestry, poultry, dairy and fishing. The rural labour
constitutes a wide variety of workers but predominant are agricultural workers. The
proportion of rural/agricultural workers in the total workforce has been coming down but
still they constitute the largest and majority section of the workforce and therefore need
full attention from the governmental authorities.

10.3 PROBLEMS OF RURAL LABOUR

The rural labour in India faces varied problems including social, economic and political
problems that are chronic and complex.
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10.3.1 Social Problems

Socially the unorganised rural labour suffers from a poor status as large sections belong
to scheduled castes and tribes and other backward classes and also minorities. The poor
status affects their mobility in other fields also. In spite of reservation and affirmative
policies, there is no improvement owing to social stratification that affects them adversely.
They work at traditional and hereditary jobs like scavenging, barbers and craftswork.
Many other problems like lack of access to community facilities and lack of economic
resources are, to some extent, due to the poor status suffered by the rural labour.

10.3.2 Economic Problems

Economically rural labour has not been able to improve its position due to lower wages
despite the Minimum Wages Act of 1948 because of its poor implementation. There is
also large amount of reserve and surplus labour which keeps wages low. This one single
measure, if implemented effectively, could be of great help to the unorganised labour.
There is also employers’ resistance in raising wages which is also facilitated by large
supply of labour compared to its demand. According to the government surveys, the
rural labour suffer from indebtedness often leading to bonded labour. A recent survey
showed that 50% of Indian peasantry is indebted. Their earnings are further affected by
the seasonal nature of agriculture. While during busy harvesting season they get better
wages and more employment opportunities, during slack seasons their earning capacity
and opportunity fall so low that many of them, especially males, are forced to migrate to
nearby urban areas or better-off states like Punjab and Haryana. Hard working
conditions, inadequate pucca houses, lack of infrastructural facilities and difficult financial
access make their conditions worse. Conditions of rural artisans and craftsmen have
deteriorated on account of decline of their traditional crafts due to competition from
machine-made goods and substitutes like advanced technological services and plastic
goods. Labour replacing devises also displace labour. There is an urgent need to address
this from alternative ways of development.

10.3.3 Position of the Unemployed

A major economic problem is the presence of open unemployment, under-employment
and disguised unemployment. Lack of education and skills deter the employability of a
person as high levels of illiteracy and limited skills become limiting factors. Open
unemployment has been fluctuating as per the National Sample Survey Organisation
(NSSO) surveys undertaken periodically. Though absolute poverty has been coming
down, yet it is still insignificant. The rural poor workers are unable to invest in education
and skills thus perpetuating a vicious circle of poverty and low standard of living.

10.3.4 Gender Discrimination and Child and Migrant Labour

Gender discrimination affects adversely women workers who are paid much less than
their male counterparts even though this is unconstitutional. This practice is prominent in
unorganised sector. Along with this is the prevalence of child labour. A large numbers of
rural workers in backward areas with no irrigation facilities are migrant workers who are
always exploited by their employers who pay them less for their work.
The above facts portray the complex problems faced by rural labour in India. These
problems are also multidimensional and chronic and require sustained and multifaceted
efforts to deal effectively.
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10.4 MEASURES FOR RURAL UNORGANISED LABOUR

The central and state governments have been following a multifaceted approach to help
this labour. These measures collectively attempt to deal with the major problems faced
by the poor rural labour. An important general measure has been the passing of the 73rd
Constitutional Amendment Act 1992 giving a constitutional status for the rural self-
governments. This Act aims at ‘planning from below and with people’s participation’. The
Act has given many powers, authority and duties to local bodies so that they can function
independently, planning action suited to their local needs. But in the subjects given to
these bodies, organising unorganised labour is not there. Though there is some welfare
responsibility for weaker sections, it is difficult to plan measures for the benefit of all
unorganised labour in rural areas. There is scope to improve the lot of rural unorganised
labour under this Act.

10.4.1 Poverty Related Measures

One set of measures deal with the acute and colossal poverty of the rural labour. Earlier
it was presumed that as economy and society develop, such development percolates
downwards to benefit the rural poor at the bottom level. But this has not happened,
though there has been a reduction in poverty after the economic reforms were
introduced in 1991. Percentage of people below poverty line in 1987-88 was 39.1%
which in 2004-05 (NSSO 61st Round) came down to 21.8%. Though there are
differences in the way poverty is estimated, yet it cannot be denied that during the period
1991-2005 poverty has come down significantly. But still the prevailing poverty rate is
quite high.
Since the beginning of the planning period the government has attempted to reduce
poverty through special measures to improve the agricultural labourers and marginal
farmers, small farmers and rural poor affected by droughts. In 1978-79 a comprehensive
programme called Integrated Rural Development Programme (IRDP) was started to help
the poor by creating new assets for themselves so that their poverty can be eradicated
over a period of time. Later it was restructured making it more employment-oriented and
was termed as Swarnajayanthi Gram Swarojgar Yojana and some other programme
contents were also added to it.

10.4.2 Minimum Wages

The passing of the Minimum Wages Act 1948 is another important measure that ensures
some sustained support to rural poor. Most state governments have fixed wages as per
minimum wage legislation but the implementation of the minimum wage legislation has been
very poor. This is due to several factors like excess labour supply; low productivity and
poor skills of workers; lack of effective organisations of workers in rural areas;
employers’ inability to pay even minimum wages; and reluctance of the rich farmers to pay
the prescribed minimum wages. This measure needs to be strengthened and effectively
implemented.

10.4.3 Land Reforms

Soon after independence the government attempted a series of reforms in agriculture in
rural areas. The ‘land reforms’ consisted of schemes like providing surplus land to
landless labour, regulation of rent for small cultivators, security of tenure for small and
marginal farmers, consolidation of landholdings and cooperative farming. These aimed at
Unorganised Labour (Rural and Urban) 127

ensuring social justice to small and marginal farmers, and those who cultivated others’
lands. These steps have been uneven and poorly implemented. The results have been
uneven and did not improve the conditions of rural poor.

10.4.4 Abolition of Bonded Labour

In India’s rural areas there is the practice of forcing the workers to work in lieu of their
debts, often incurred by their forefathers. This unjust, cruel and exploitative practice was
abolished in October 1975 when the country was under an internal emergency with an
ordinance and was followed by the passing of the Bonded Labour System (Abolition) Act
1976. The workers were legally made free but the practice seems to be continuing in
some rural areas. However such forced labour is found internationally in many countries,
especially the developing ones. The International Labour Organization (ILO) in its recent
report (Economic Times, 13-5-09) points out the growing number of unethical, fraudulent
and criminal practices that can lead people into situations of ‘forced’ labour. The Director
General of ILO states rightly that ‘forced labour is the antithesis of decent work and
causes untold human suffering. Such forced labour can be dealt with only through
international efforts.’ In his words “modern forced labour can be eradicated provided
there is a sustained commitment by the international community, working together with
governments, employers and the civil society”. India must set a good example of
successful eradication of such forced labour by effective implementation of the Bonded
Labour System (Abolition) Act 1976.

10.4.5 Employment Schemes

Another set of measures were attempted to provide employment opportunities that will
uplift the rural poor gradually but effectively. The measures were broadly started during
the Fourth Five Year Plan (1969-74). These included the Rural Works Programme
(RWP), Crash Scheme for Rural Employment (CSRE), Employment Guarantee Scheme
(EGS) in Maharashtra and the Food for Work Programme (FWP). However these were
not on a large-scale covering all rural areas of the country. Among these the EGS in
Maharashtra deserves a special mention. Though there were criticisms of poor
implementation, the programme has come in for high praise from international organisations.
It encouraged the Union government to attempt a similar scheme all over the country as
explained below.
A major change was visible from the Sixth Five Year Plan onwards. During this plan, the
National Rural Employment Guarantee Programme (NREGP) was launched. A special
programme for rural landless poor labour called ‘the Rural Landless Employment Guarantee
Programme (RLEGP)’ was also launched fully funded by the central government. Later
these programmes were merged into the Jawahar Rojgar Yojana (JRY). The JRY was
also restructured and renamed as JGSY (Jawahar Gram Smriddhi Yojana). This programme
gave employment to rural poor and also created durable assets necessary for development.
To benefit rural poor residing in desert, drought prone, tribal, and hilly areas there is an
Employment Assurance Scheme (EAS). A more comprehensive benefit programme was
launched in 2001 called Sampoorna Gram Rojgar Yojana (SGRY) which not only gave
wages to workers but also food security, at the same time creating durable assets for the
community. In 2004 a National Food for Work Programme was launched. All these
programmes are meant to provide employment, income and purchasing power to the rural
poor and these definitely have improved the living conditions of rural poor.
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A historical step was taken in 2006 when the Government of India introduced the
National Rural Employment Guarantee Programme (NREGP) in select districts which
became the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA).
This ambitious programme now covers all the districts in rural areas. The scheme provides
100 days of guaranteed unskilled wage employment to each rural household that seeks
employment under the scheme. The scheme is on the pattern of EGC of Maharashtra
introduced in 1972. The programme is to benefit the rural poor and has become the
government of India’s flagship programme. It has been expanding rapidly since its
introduction in 2006. Till recently only manual work was available to those seeking
employment. Recently some changes have been announced by the Ministry of Rural
Development. It will now cover rural artisans like masons and carpenters. Emphasis is
also laid on the creation of ‘verifiable permanent assets’, ‘to root out corruption in the
forged muster rolls by culprits to pocket money in the name of rural jobs.’ Officials have
been asked to prepare ‘a scheme under which a register of assets created under NREGA
will be maintained at the district headquarters.’ The programme may be further extended
to construct roads as also houses for the BPL (below the poverty line) families under the
Indira Awas Yojana that is being expanded to build 20 crore dwelling units. This single
programme (NREGP) has prospects of making a world of difference for the rural poor
in India and therefore carefully needs to be planned and effectively implemented to benefit
poor in all major aspects of life, like poverty reduction, employment promotion and rise
in the standard of living.

10.4.6 Measures for Rural Labour

Rural labour in India is entirely unorganised with poor living conditions. Further, a major
measure announced is the ‘Unorganised Sector workers’ Social Security Bill’. However
India still has a long way to go in improving the lot of rural labour and it is hoped that
with the passage of rapid economic development large sections of rural labour will be
able to enjoy the fruits of development. For this purpose the economic growth and
development must be inclusive.

10.5 PROFILE OF URBAN UNORGANISED LABOUR

The unorganised labour in urban areas constitutes a highly heterogeneous labour. It
includes self-employed, wage employed, casual labour in various sectors. It covers
hawkers selling various goods like garments, plastic items, fruits, vegetables, and numerous
food items. Another section consists of construction workers; home-based domestic
workers; casual workers working in factories and micro establishments. The urban labor
also works in household industries like food processing, bidis, cigar etc. There are also
ragpickers, rikshaw pullers, electricians, and many self-employed. All these workers face
a large number of problems. The government has taken a number of measures, but these
do not seem to have much difference to the lot of these urban unorganised workers.
As stated in the beginning, if agricultural labour is taken out, the rest of the categories
of unorganised labour found in urban and semi-urban areas include a) those employed on
wages, b) those who are self-employed like hawkers, and rikshaw and taxi drivers, and
c) micro-entrepreneurs manufacturing small and simple products and components/spare
parts, for sale to larger industries as well as to direct customers. All these activities and
workers constitute the informal sector, mainly the urban informal sector.
The ILO sources define such informal sector to mean an unorganised and decentralised
Unorganised Labour (Rural and Urban) 129

sector in which economic activities take place outside the framework corporate public and
private sector establishments. Such activities include small scale of operations; ease of
entry; reliance on family labour and local resources; labour-intensive technology; low
capital endowments; a high degree of competition; unregulated market; unskilled workforce;
and acquisition of skills outside the formal education system.
The informal sector is more visible in India and in almost all sectors of the economy i.e.
in agriculture, industry, household sector and the services sector. It has been in existence
for a long time but it is only since the 1970s that it has drawn the attention of the policy
makers and researchers, notably from the point of view of opportunities for participation
and reaping the benefits of development. In India, the formal sector which received large
resources has failed to provide employment for the growing labour force resulting in the
problem of labour force explosion. Under the circumstances, the surplus labour force has
been forced to generate its own means of income and employment. This working class
is engaged in a variety of economic activities in the informal sector.

10.5.1 Nature and Magnitude of Urban Unorganised

The urban unorganised labour is highly heterogeneous and is involved in a wide variety
of occupations and establishments manufacturing a vast variety of goods and offering a
number of services. A significant section of unskilled manual workers work in both
organised (mostly as contract workers) and unorganised sectors in urban areas with
unwarranted wage differentials between them. According to the 2001 census there were
402.5 million workers in the country. Of these 91.8 million were in urban areas. An
overwhelming proportion of urban workers are unorganised. The work participation rate
in urban areas was 32.2%. It was 50.85% for males and for females it was 11.5%.
Women’s work is thus increasingly informalized, flexible and thus prone to exploitation.
Thus urban labour market is a phenomenon of clear male domination.

10.5.2 Type of Workforce

The urban workers too can be divided into self-employed, regular salaried and casual
labour. According to NSSO surveys, in 1999-2000, 42.1% of the employment was self
employment; 40.1% regular/salaried; and 17.8% were casual labour. This proportion has
not changed much over a period of time. A much larger section of urban workers are
salaried compared to rural areas where only 7% are in this category. In the urban labour
market, about 60% of workers were unorganised having poor conditions of employment.

10.5.3 Literacy
India’s literacy rate has wide variations. In urban areas literacy levels are higher but
employability depends on acquisitions of skills and training. Here 90% of the workforce
is unskilled or less skilled. Thus while urban labour may be more educated than the rural
ones, such education is not associated with higher skills.

10.5.4 Vulnerable Sections

Like the unorganised in rural areas, in urban areas there is urban informal sector which
is nothing but urban unorganised labour consisting of workers working in small establishments
or self-employed. Those working are doing so in unhygienic working conditions including
longer working hours. Lack of education, skills and training has made urban unorganised
very vulnerable. With a large supply of unskilled labour, competition among urban poor
for livelihood opportunities has driven the wage rates of the unskilled to very low levels.
130 Human Security

Minimum wages exist in law, but the excess supply of labour keeps the wages at a low
level. There is also a significant section of child labour in urban areas that is highly
vulnerable to all sorts of abuses. Poor urban women workers, who mostly live in slums,
face discrimination, exploitation and abuse. Unhygienic living conditions in the slums and
prevalence of social vices make them victims of AIDS/HIV. Majority of urban unorganised
do not enjoy the benefits of social security system though such laws are supposed to
apply to them. The cumulative result of all these factors is poor health of workers,
malnutrition, low skills and high levels of vulnerability.

10.6 PROBLEMS OF URBAN UNORGANISED LABOUR

The urban unorganised labour is highly heterogeneous working in different occupations and
industries and services. Most of organised sector workers are found in big industrial cities
and towns. So a significant part of urban unorganised labour are in residual employment
wherein workers do not get employment in organised sector; they are pushed to the
unorganised sector, mostly consisting of very small establishments, or self-employed
offering a variety of services.

10.6.1 Nature of Work

An important feature of the urban unorganised labour market is that a significant section
of the work force consists of migrants from nearby areas. Growth rate of urban workers
has been much faster than that of rural workers. For example, the growth rate of urban
workers during 1991-2001 was 3.64 % compared to that of rural workers of 2.54%.
India has the largest urban population next only to that of China. Metropolitan cities like
Mumbai and Delhi attract unskilled workers from all over the country. Several urbanisation
experts like Joshi & Joshi (1971); L.K.Deshpande (1979); Bose (1978), Papola (1971);
and Mazumdar (1971) have studied unorganised workers in the urban informal sector in
cities and towns. These studies have found the unorganised workers including a large
section of self-employed varied from 50% to 75% of the total employment in the cities.
All these workers were working in small scattered units which have made the mobilisation
and organisation of these workers an extremely challenging task.

10.6.2 Conditions of Employment

The urban workers work in varying conditions of work. For example construction
workers work at building sites while small technicians work in small repair shops. Most
of the workers are employed in low technology, low productivity and low earning
occupations. Therefore, standardisation of their work is a difficult task. There is also
absence of clear employer-employee relationship in case of certain categories of workers
like domestic servants working in several houses. In such cases, workers are left to
themselves resulting in adverse and sometimes hazardous working conditions.
Besides, large sections of workers have little education and poor skills making the
problem of raising their skills, efficiency, and productivity an extremely challenging task.
They also have little access to educational and training institutions. Further different
categories of workers have different problems. Many workers, especially women and
child workers are exploited in several ways. These problems are similar in both rural and
urban areas. Many urban workers are forced to live in slums where the living conditions
are extremely unhealthy.
Self-employed workers find it difficult to get access to credit from institutional sources
Unorganised Labour (Rural and Urban) 131

because of their inability to produce adequate security. They are also not well versed in
the procedural formalities. They find it difficult to procure better quality of productive
assets and resultantly, many of such workers depend on their kinship, caste and religious
ties for livelihood and survival. Since the workers are not organised they lack adequate
political and social power to influence government policies and programmes. And since
they do not fit into any clear occupational classification development of a uniform
legislation has become a major problem. Most of the workers do not enjoy social
security.
Another problem faced by the urban unorganised workers is that of unemployment which
is open, involuntary and chronic. According to the NSSO survey in 61st Round,
unemployment rate under current daily status basis was 7.5% for males and 11.6% for
females in 2004-05. Many of them are less educated and unskilled and are migrants
from rural areas. A large section of the educated unemployed suffers on account of lack
of employability because of inadequate education and training.
The above problems highlight the need for organising and regulating this sector. Though
the economy and industries develop, the benefits have not percolated down to these
workers because of being an organised force. Many of them are affected by the
prevailing globalisation policies and need social help to enable them to face hardships.
They should therefore be entitled to basic social security facilities like provident fund,
medical care, pension benefits etc. The goals of poverty eradication demand that these
workers are given some benefits of social intervention.

10.7 MEASURES FOR URBAN UNORGANISED LABOUR

The measures to improve the unorganised sector should aim at removing impediments like
illiteracy and low productivity; and lack of access to credit and other facilities. This can
help in providing the labour good livelihood opportunities.

10.7.1 Government’s Coordinated Measures

It should be noted that measures are needed not only in the area of employment and
livelihood opportunities but also in areas like infrastructural services including housing,
water supply, sanitation, education and training, health and medical care. As pointed out
by the central government, though cities are engines of growth and contribute nearly 55%
to India’s GDP, policies of economic growth have not led to improvement in the lives of
urban poor.
It is necessary to evolve a plan of action for integrated development of urban areas in
a sustainable, equitable, humane and inclusive manner. Right policies, programmes and
projects can effectively meet the challenges of deprivation. “In urban context, however,
the dimensions of poverty undergo transformation and priorities seem to change with the
size of urban settlements. Security of tenure for shelter as well as for employment that
is primarily informal, access to basic infrastructure and social services at affordable costs,
availability of subsidized credit and social and political space emerge and factors which
hugely impact poverty and quality of life of the urban poor (Kumari Selja, Minister of
State, Ministry of Urban Development and Poverty Alleviation, Govt. of India, 10-2-06).
The government has claimed that measures are thus more coordinated and balanced to
ensure not only work but also welfare of the urban poor.
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The government measures that help the urban unorganised are connected with the removal
of urban poverty and unemployment. Earlier programmes included the Nehru Rojgar
Yojana (NRY) of 1989; Planning Commission’s Integrated Urban Poverty Eradication
Programme (IUPEP); and Urban Basic Services Programme. These were replaced by
Swarna Jayanti Shahari Rojgar Yojana (SJSRY) which includes two schemes that were
added in 1997 viz. the Urban Self Employment Programme (USEP) and the Urban Wage
Employment Programme (UWEP). The USEP programme aims at helping urban poor
for setting up gainful self-employment ventures; helping urban poor women in setting up
of similar ventures; and programmes for upgradation and acquisition of vocational and
entrepreneurial skills by the beneficiaries and potential beneficiaries. The UWEP aims at
helping urban poor living below poverty line within the jurisdiction of urban local bodies
by utilising their labour for construction of socially and economically useful public assets.
Officially notified minimum wages are to be paid to the beneficiaries of this programme.
The SJSRY schemes ‘seek to provide gainful employment to the urban unemployed or
underemployed poor by encouraging self-employment ventures and provision of wage
employment wherever possible.’ The creation of suitable community structures and delivery
of inputs will be through the medium of urban local bodies and community structures.
For example, to ensure professional training to whose who are dealing with SJSRY
schemes in the area of skill upgradation and entrepreneurship development, special
programmes in association with Entrepreneurship Institute of India (Ahmedabad) and
National Institute of Entrepreneurship and Small Business Development (New Delhi) are
arranged.
The government also attends to specific categories of unorganised labour in urban areas.
For example, special programmes are arranged to help street vendors wherein all
stakeholders and experts are brought together to ensure benefits to the vendors as
indicated in the National Policy of Urban Street Vendors. Similarly there is the scheme
of Urban Low Cost Sanitation for the Liberation of Scavengers.

10.7.2 Constitutional Measures

Measures to promote better governance of urban areas and more effective empowerment
of urban local bodies is reiterated via the passing of the 74th Constitutional Amendment
Act which came into force from June 1993. The act devolves a Constitutional status on
the urban local self-governments who will no longer be found as merely as arms of the
State. Under the Act, Article 243 confers wide powers, authority and responsibilities on
urban local bodies and the Twelfth Schedule gives the subjects that come under Article
243W. Unfortunately they do not include measures to help urban unorganised. Item 9
under the Twelfth Schedule deals with ‘Safeguarding the interests of weaker sections of
society, including the handicapped and mentally retarded’ gives some scope to plan and
implement measures for a section of unorganised labour but is inadequate to cover the
whole lot of unorganised labour. Still, there is scope to take advantage of this provision
to bring benefits to unorganised labour, which must be fully explored. There are also
programmes in the area of housing for urban poor like the Valmiki Ambedkar Awas
Yojana (VAMBAY) providing shelter or upgrading it, and Nirmal Bharat Abhiyan dealing
with community sanitation project

10.7.3 Other Measures

There are also several schemes involving partnership with NGOs providing micro finance
facilities or helping the unorganised to get loans on concessional institutional finance from
Unorganised Labour (Rural and Urban) 133

the banks for the urban poor. It may be concluded that schemes for the urban
unorganised poor labour are large in number helping a variety of categories of labour and
offering a wide range of services. If these programmes are expanded and implemented
effectively, the urban unorganised may benefit tremendously.

10.8 SUMMARY
Unorganised labour constitutes well over 90% of the Indian labour force. This vast
section of over about 400 million presently, is distributed in rural and urban areas; among
men and women (and children also); and among different categories of work and
workers, - wage employed and self-employed, in occupations and in micro enterprises.
Analysis under major heads of ‘rural’ and ‘urban’ shows that when it comes to
mobilisation, training and giving them income generation opportunities, there is immediate
urgency and need for doing so. Governments, at central and state levels are no doubt
grappling with the problems and welfare of unorganised workers. Government measures
of employment guarantee schemes, family pension schemes, social security measures and
welfare payments for the aged and handicapped, many of these for the benefit of
unorganised labour are commendable, though these can be made more effective and
broad based. But success can be achieved only with all round participation of all sections
of unorganised labour. A major initiative taken by the Government of India was the setting
up of the Second National Commission on Labour in January 1999 to examine, among
other things, the labour legislation and suggest umbrella legislation for the benefit of
unorganised labour. The Commission submitted its report in June 2002. The Report
brought out the poor conditions of work and security for labour in the unorganised sector
in the country and suggested job access, job security and protection against exploitation
and provision of welfare measures. The unorganised labour must be mobilised and
sensitised so that they can be empowered to raise their wages, standard of living,
efficiency and productivity benefiting not only themselves but also the economy and
society. Cooperatives may be involved to train small producers like artisans and small
garment makers, associations for training self-employed like the bakers and hawkers. This
is the Gandhian approach of promoting unity and harmony among all the unorganised
labour and empowering them.

10.9 TERMINAL QUESTIONS

1. Explain the various features of the rural unorganised labour, commenting on its
magnitude.
2. Attempt a profile of unorganised labour in urban areas, giving illustrations of some
prominent categories.
3. Comments on the measures taken for the benefit of rural unorganised labour.
4. Discuss the measures available for the urban unorganised labour. Suggest some
measures that can improve the lot of this labour.

SUGGESTED READINGS
All India Institute of Local Self-Government (AIILSG), Launching Ceremony of National
Resource Centre on Urban Poverty, Proceedings, AIILSG, Mumbai, 10-2-06.
134 Human Security

Bhagoliwal, T.N., Economics of Labour & Industrial Relations, Sahitya Bhavan, Agra,
1995.
Shram Shakti Report, (Ila Bhatt Commission) Report of the National Commission on
Self Employed Women and Women in Informal Sector, Government of India, New
Delhi, 1988.
Government of India, Report of the Second National Commission on Labour, Ministry
of Labour & Employment, GOI, New Delhi, 2002.
Government of India, Economic Survey-2007-08, Ministry of Finance, Oxford University
Press, New Delhi, 2008.
Indian Journal of Labour Economics ‘Conditions of Workers and Rights of Workers in
the Unorganised Sector’, Conference Theme-Articles, Vol.50, No.4, 2007.
Mishra, L., Organizing the unorganised: Myth, Reality & Possibility, Indian Journal of
Labour Economics, No.1, January-March, 1998.
Misra, and Puri., Indian Economy, Himalaya Publishers, Mumbai, 2008
National Productivity Council (NPC) Indian Informal Sector, NPC, New Delhi, 1985
Prabhu, R.K, and Rao, U.R., (Compiled & Ed.), The Mind of Mahatma Gandhi,
Navajivan Publishing House, Ahmedabad, (1967-3rd Edn.) (Reprint 1987).
Sundaram, S.K.G., Organizing the unorganised Labour-Case studies in Maharashtra,
Indian Journal of Labour Economics, Vol.38, No.4, 1995.
Sundaram, S.K.G.., Organizations Working for Unorganised Labour- The Case of
Mumbai, FES, New Delhi, 2000