improving quality of informal employment · mudra. ease of doing business for enterprise growth...
TRANSCRIPT
Informal economy includes
•India has a preponderance of Informal employment with 92 percent
Informal sector
All unincorporated private enterprises engaged in the sale and production of goods and services operated on a proprietary or partnership basis and with less than ten workers
Informal employment
•those working in the informal sector or households with no social security
•workers in the formal sector without any employment and social security
Formal-Informal Employment across Organized –
Unorganized
(in millions)
2004-05
Organized Unorganized Total
Formal 32.06
(52)
1.35
(0.3)
33.41
(7.3)
Informal 29.54
(48)
396.66
(99.7)
426.20
(92.7)
Total 61.61
(13)
398.01
(87)
459.61
(100)
2011-12
Organized Unorganized Total
Formal 37.18
(45.4)
1.39
(0.4)
38.56
(8.1)
Informal 44.74
(54.6)
390.92
(99.6)
435.66
(91.9)
Total 81.92
(17.3)
392.31
(82.7)
474.23
(100)
Broad Sectoral Distribution of Formal-Informal Employment
(in percent share)
2004-05 Organized Sector Unorganized Sector Total
Formal Informal Formal Informal
Agriculture 0.76 0.99 0.00 56.75 58.50
Manufacturing 1.21 2.10 0.10 8.33 11.73
Non-manufacturing 0.53 1.45 0.00 4.42 6.41
Services 4.48 1.89 0.19 16.80 23.36
Total 6.98 6.43 0.29 86.30 100.00
2011-12 Organized Sector Unorganized Sector Total
Formal Informal Formal Informal
Agriculture 0.06 0.16 0.00 48.69 48.90
Manufacturing 1.48 2.79 0.06 8.28 12.60
Non-manufacturing 0.69 3.77 0.01 7.18 11.65
Services 5.62 2.72 0.22 18.29 26.84
Total 7.84 9.43 0.29 82.43 100.00
Informal Employment in Non-Agricultural Sector
(in millions)
Non-Agricultural
Sector
2004-05 2011-12
Organized Unorganized Total Organized Unorganized Total
Mining 0.91 0.90 1.82 0.99 0.80 1.79
Manufacturing 9.64 38.28 47.92 13.23 39.26 52.49
Electricity & water
supply
0.16 0.08 0.24 0.78 0.43 1.21
Construction 5.60 19.35 24.94 16.12 32.80 48.92
Trade, hotel &
restaurant
1.71 44.30 46.02 2.57 47.60 50.17
Transportation, storage
& communications
1.35 13.31 14.66 2.31 15.71 18.02
Real estate other
business activities
0.49 2.93 3.43 1.05 3.96 5.02
Education 2.40 2.75 5.15 3.55 2.75 6.31
Finance 0.41 0.72 1.13 0.67 1.14 1.81
Health 0.61 1.49 2.10 1.02 1.66 2.68
Public admin, defence 1.09 0.08 1.17 1.11 0.00 1.11
Other services 0.64 11.62 12.26 0.58 13.92 14.50
Total 25.01 135.81 160.83 44.00 160.04 204.03
Education level of informal workforce in non-agricultural sector (in percent)
Education level 2011-12
Illiterate 22.97
Below primary 10.74
Secondary education 48.23
Higher secondary 7.72
Diploma/certificate 1.46
Graduation and above 8.88
Status of the Informally Employed Workforce
(in millions)
Status 2011-12
Self-employed 244.97
(56.22)
Regular wage/ salaried 48.79
(11.19)
Casual Worker 141.91
(32.57)
Total Informal Workforce 435.66
(91.78)
Size of enterprise mattersSize by
class of
empl
Item Economic Census Years
1990 1998 2005 2013
1-5 Establishments 93.4 94.0 95.4 95.5
Employment 54.5 58.6 67.3 69.5
6-9 Establishments 3.5 3.3 3.4 3.1
Employment 8.4 8.3 10.3 9.3
10 &
above
Establishments 3.1 2.8 1.3 1.4
Employment 37.1 33.1 22.4 21.2
6th Economic Census:
36.2% of all the establishments were home based i.e. inside household.
18.4% operating from outside household without fixed structure,
45.4% operating from outside households with fixed structure.
89 % of the workers employed in the establishments hiring less than 10 workers.
Gender disparity: 13.76% of the establishments owned by women entrepreneurs
What Breeds Informality
Poverty
Enter labour market with low level of skills and education
High Cost of Compliance to the labour regulations
Employers preference for contract workers
Poor Working Conditions
Lack of Bargaining Power
Lack of social security/job security
Low productivity
Vicious circle of low productivity and working poor
Transforming labour market for Decent jobs
Creating more jobs with social protections
Formalize the informal
Help the unprotected
Need is integrated strategy of policy mix to address the problem
Making Employment central to the growth strategy
Creation of employment opportunities a monitorable
Manufacturing policy aims at generation of 100 million jobs by 2022
focus on labour intensive manufacturing sector
Make in India Campaign
Access to finance Market
Improving labour Laws Administration
increasing workers’ skills and productivity ;
Promoting Entrepreneurship
Social Security
Improving Labour Market Administration to
Reduce transaction costs of the formal economy for small firms and the self-
employed
a unified Web Portal –'Shram Suvidha‘ facilitating
Online registration
self certification
Web based inspections
Identification of Unorganised workers
Amendments to number of Acts impacting working conditions, social security and
availability of skilled manpower
Social Safety Net to overcome vulnerabilities
Range of instruments to address requirements of vulnerable segments in the
informal economy
Legislation based Welfare funds
Legislation based Schematic interventions
MGNREGA
General interventions for poor which includes these informal economy workers also
Atal Pension Yojana
Pradahn Mantri Jeevan Suraksha and Jeevan Jyoti Yojana
Jan Dhan Yojana
Sectoral Target group specific interventions
RSBY
Extension of Organised Sector Benefits to the informal workers
Skilling for improved Employability
A dedicated Ministry of Skill Development
Policy focus on inclusive skill development
Target Group Specific
Recognition of Prior learning
Focus on Entrepreneurship
Catalyzing private sector for skilling
Focus on Apprenticeship in SMEs
Skilling in mission mode approach
Local development strategies
Promoting livelihood business incubators in the rural areas
Create jobs at local level
Favourable ecosystem for entrepreneurship
Training Barefoot Technicians in the basic concepts of civil
engineering and involving them in the MGNEREGA work
Creation of Durable assets
Availability of jobs
Horizontal and vertical mobility
Maintenance of Rural Networks
Increased employment opportunities
Involvement of local communities
Social Dialogue Social dialogue plays a key role in promoting opportunities, particularly for the
marginalized to obtain decent and productive work in conditions of freedom, equality,
security and human dignity.
It underpins good governance and democratic decision making in the labour market.
Policy formulation on the informal economy requires that actors in the informal
economy are able to organize, articulate their needs and rights, and engage
effectively within social dialogue platforms.
Governments have a key role to play in setting the enabling framework for social
dialogue
Informal economy actors be articulate their needs and interests (irrespective of caste,
gender, where they are located )
Small and Medium Enterprises (SMEs)
36 million units, provides employment to over 80 million people.
The Sector through more than 6,000 products contributes about 8% to GDP, 45% to the
total manufacturing output and 40% to the exports from the country.
Need for Innovation, Entrepreneurship and Skilled Workforce
Credit, networking, capital, market linkages, hand holding
Vocational education, ITI courses and other skill development programmes in line with industry needs.
Social Safety net (Health Insurance, Suraksha Bima Yojana, Jeevan Jyoti Yojana, NPS, APY etc.)
ASPIRE: A Scheme for Promoting Innovation and Rural Entrepreneurship
Atal Innovation Mission (AIM) including Self-Employment and Talent Utilization (SETU) is
Government of India’s endeavour to promote a culture of innovation and
entrepreneurship
MUDRA
Ease of doing business for enterprise growth
World Bank Doing Business Report (2016), India’s ranking improved to 130th (up
by 4 points) among 189 countries.
But still a long way to go
Simplified, streamlined and cost effective registration procedures
Simplify the regulatory regime
Simplified taxes for SMEs - GST Bill
Speedy resolution of disputes
Capacity building of enterprises to enable compliance with regulations and
improve working conditions;
Opening access to skills training,
business advisory services, market information,
technology support,
social protection
trade opportunities.
Cause of Informality
On the labour supply side: internal constraints brought about by poverty, inadequate human capital accumulation, such as low education, training and ability to manage risks and income. These prevent workers fromtaking more productive employment or from accessing financial and other services;
• On the labour demand side: a policy incentive regime that encourages labour saving technologies and capital intensive growth which orients public and private support institutions away from small enterprises and private sector growth; and
• On the external environment: globalization and greater competitiveness that force companies to rely on atypical, non-standard workarrangements that are less costly to employers but result in greater precariousness for workers.
Access: The informal economy has become the last resort for many as a result of discrimination in access to formal labour market
Informality occurs when social security systems are out of reach of certain types of workers and entrepreneurs leaving them vulnerable to risks of sudden impoverishment;
Addressing contingencies from unemployment, loss of livelihood, maternity, sickness or old age.
Death and disability when occupational safety and health measures are not available
Multiple factors are responsible for informality in INdia Increased period of high growth but informalisation of employment in the organized
sector
Low skill and education
Poverty and cannot wait so pick up jobs low paid jobs, labour market discrimination
prevents from investment in skill
Structural transformation and inability of the industry to absorb the surplus manpower
due to lack of adequate skills in non manufacturing sector or services sector
More importance to contract workers to have flexibility
high cost of compliance to regulation results in ‘rigidity of the labour market’ and the
‘voluntary choice of informality’.
Promoting equality and addressing
discrimination
Curbing informality means addressing the factors which push many
vulnerable groups into the informal economy.
Labour market discrimination against poorer women, youth,
disabled, socially disadvantaged groups, migrant groups often puts
segregates them into the informal economy.
Policy and legal frameworks need to eliminate discrimination in the
formal labour market and open access to the formal economy
through targeted strategies in all policy areas.
Informality and Decent Work AGENDA
Employment
need to expand productive and decent livelihood opportunities
access to skills training, financial services, market information that can open
the space for the economic activities of the poor, utilize their assets and
expand their markets (for example labour intensive production techniques,
infrastructure facilities accessible to clusters and communities, trade
policies that do not unduly discriminate against the products of the poor,
financial services and market space accessible to the poor).
(
Working Conditions
All those who work have rights at work, irrespective where they work. The
ILO calls for improvement of the conditions in which work is carried out,
wherever work might occur, whether in the formal or the informal
economy, whether at home, in the community or in the voluntary sector,
whether workers are organized or not.
Informality in terms of rights can be found among populations that are not
protected by labour legislation and administration, have no access to
dispute settlement mechanisms, cannot form legally-recognized
associations, are beyond the reach of legal and rights education, and work
under bonded or unfair conditions out of the purview of state scrutiny.
Transitioning from Informal to FORMAL Economy
Growth strategies and quality employment generation
Regulatory environment for effective implementation
Bargaining Power
Equality of opportunity irrespective of bias
Entrepreneurship, skills, finance, management, access to markets
Extension of social protection, social security, social transfers
Local (rural and urban) development strategies
Working poverty as an indicator of informality Working poverty is a useful indicator when focusing on informality, firstly because the main employment related problem in developing countries is less a problem of widespread unemployment (the poor are too poor not to work) but rather mass underemployment and working poverty; and secondly because there is a frequent overlap between being amongst the working poor and working informally. Although some activities in the informal economy offer reasonable livelihoods and incomes, most people engaged in the informal economy face insecure incomes and a wide range of decent work deficits. Many workers in informal employment, including own account workers, unpaid contributing workers, and those operating very small enterprises, often have lower earnings and face higher poverty risks than those working in formal employment. Thus there are strong linkages between informality and working poverty.