Chapter 1 INTRODUCTION AND REVIEW OF LITERATURE

Transcription

1 1 Chapter 1 INTRODUCTION AND REVIEW OF LITERATURE A major part of the workforce in India and other developing countries work in informal sector. Informal sector has become an increasingly popular subject of study, not just in economics, but also in sociology and anthropology. Keith Hart was the first person to introduce the term Informal Sector. In September 1971 soon after this, International Labour Organisation (ILO) employment mission to Kenya came with its report Employment Incomes and Equality (ILO, 1972). Hart distinguished formal and informal (both legitimate and illegitimate) income opportunities on the basis of whether the activity entailed wage or self-employment (Hart, 1973).Therefore, the concept of informal sector used by Hart was limited to small self-employed individual workers. Although Hart s concept of informal sector had some limitations, the introduction of this concept made it possible to incorporate activities that were previously ignored in theoretical models of development and in national economic accounts (Swaminathan, 1991). The term informal sector came in a broader sense in the academic literature only after the visit of an International Labour Organisation (ILO) employment mission to Kenya in The ILO then evolved a conceptual framework and guidelines for the collection of statistics on informal sector and presented the same in the Fifteenth International Conference of Labour Statisticians (ICLS) held in February, 1993 in the form of a resolution. The resolution was then endorsed by the United Nations Statistical Commission (UNSC) and made a part of the System of National Account (SNA) 1993 by the United Nations Economic and Social Council.

2 2 Though the term informal sector gained currency after ILO evolved a conceptual framework and guidelines for the collection of statistics on informal sector, there has not been any single definition of informal/unorganised sector in India. Informal sector remained a matter of discussion among the academicians, policy makers etc. from the beginning, as a large chunk of workforce is employed in this sector. Different criteria were being used to identify the informal sector but none of them was universally applicable in different empirical situations (Papola, 1981). A study by Mitra (2001) based on Fourth Economic Census of India took the criteria of own account enterprises and employment establishments employing one to nine workers to identify the informal sector. The different organisations of India like National Sample Survey Organisation (NSSO), Directorate General of Employment and Training (DGET) etc used varying definitions of informal/unorganised sector depending on the specific requirements of each organisation. Keeping in view the absence of a uniform definition of informal/unorganised sector in India, the National Commission for Enterprises in the Unorganised Sector (NCEUS) set-up a Task Force to review the existing definitions and formulated harmonised definitions of informal/unorganised sector employment and informal/unorganised employment. Existing Definitions of Informal Sector As per System of National Accounts (1993), the informal sector consists of units engaged in the production of goods or services with the primary objective of generating employment and income to the persons concerned. These units typically operate at a low level of organisation, with little or no division between labour and capital as factors of production and on a small scale. Labour relations - where they

3 3 exist - are based mostly on casual employment, kinship or personal and social relations rather than contractual arrangements with formal guarantees. The informal sector forms part of the household sector as household enterprises or, equivalently, unincorporated enterprises owned by households. The First Indian National Commission on Labour ( ) defined unorganised sector workforce as those workers who have not been able to organise themselves in pursuit of their common interest due to certain constraints like casual nature of employment, ignorance and illiteracy, small and scattered size of establishments. The National Sample Survey Organisation (NSSO), which has been conducting surveys of unorganised enterprises at periodical intervals, generally adopted the following criteria for the identification of unorganised sector: i. In the case of manufacturing industries, the enterprises not covered under the Annual Survey of Industries (ASI) are taken to constitute the unorganised sector. ii. In the case of service industries, all enterprises, except those run by the Government (Central, State and Local Body) and in the corporate sector were regarded as unorganised. The NSSO also conducted a separate informal sector survey in and all non-agricultural enterprises, excluding those covered under the ASI, with type of ownership as either proprietary or partnership were treated as informal nonagricultural enterprises for the purpose of the survey. In the compilation of National Accounts, the term unorganised sector is used to represent the residual enterprises, which are not included in the organised sector.

4 4 The coverage under organised sector, however, differed across different segments of the economy depending on regular data availability from various administrative sources. The Directorate General of Employment and Training (DGET) considers all establishments employing ten workers or more as organised sector, though Employment Exchange (Compulsory Notification of Vacancies) Act, 1959, makes it mandatory to submit employment returns only for those units ordinarily employing twenty five or more persons. Alternative Concepts and Definitions of Formal and Informal Sector in India The National Sample Survey Organisation (Government of India, 2001: pp. 3-4) defines the informal sector in terms of all unincorporated proprietary enterprises and partnership enterprises. An enterprise is an undertaking, which is engaged in the production and/or distribution of some goods and/or services meant for the purpose of sale, whether fully or partly. An enterprise may be owned or operated by a single household or by several households jointly, or by an institutional body. The proprietary enterprises are those where an individual is the sole owner of the enterprise. Partnership enterprises are those where partners (from the same household or different households) agree to share the profits of a business carried on by all or any one of them acting for all. Alternatively, an enterprise is distinguished between an own account enterprise (OAE) and an establishment. An OAE is run by household labour, usually without any hired worker employed on a fairly regular basis. An

5 5 establishment has less than 10 workers with at least one hired labourer on a fairly regular basis. An establishment is further distinguished between directory establishment (DE) and Non-Directory establishment (NDE). A DE (or NDE) employs more than 5 workers (or less than 6 workers) with at least one hired labourer. Official statistics (e.g. National Accounts Statistics) in India distinguish between organised and unorganised sectors in different contexts. The organised sector comprises of enterprises, and information (e.g. statistical data) on their activities is available or collected regularly (e.g. registered manufacturing units). The unorganised sector comprises of enterprises and information on their activities is not regulated under any legal provision or regular account on their activities is not maintained by enterprises themselves. Manufacturing units (e.g. all manufacturing, processing, repair and maintenance service units) registered (or not registered) under the Factory Act 1948; belong to the organised (or unorganised) sector. That is, factories employing 10 or more (or less than 10) workers and using power or employing 20 or more (or less than 20) workers without using power, in the reference year, belong to the registered (or unregistered) manufacturing sector. Enterprises covered (or not covered) by the Annual Survey of Industries (ASI) fall under the purview of the organised (or unorganised) sector. Unorganised and informal sectors also differ in their compositions. In fact, the unorganised sector includes unincorporated proprietary or partnership enterprises, enterprises run by co-operative societies, trusts, private and public limited companies

6 6 (non ASI). Thus, informal sector is a part of unorganised sector in India. In essence, the alternative concepts and definitions imply that the unorganised sector is wider in scope to include unregistered, unregulated and informal enterprises and establishments in manufacturing and service sectors. In India, the term informal sector per se has never been used either in official statistics or in National Accounts Statistics (NAS) until The Indian National Accounts Statistics from the very beginning used the terms 'organised' and 'unorganised' sector from the point of view of collection of statistics. But researchers often used the term unorganised and informal interchangeably. In reality, though the terms are quite similar to each other, they are not truly identical (Kulshrestha, 1999). The organised sector constitutes those enterprises for which statistics are available regularly either through published government sources, budget documents or through the Annual Survey of Industries (for registered manufacturing industries). On the other hand, the unorganised sector includes those enterprises whose activities or collection of data is not regulated under any legal provisions and those who do not maintain any regular accounts (Kulshrestha, 1999). According to the Central Statistical Organisation (CSO, 1980), the unorganised sector comprises all unincorporated enterprises and household industries other than organised ones and which are not regulated by any of the acts and which do not maintain annual accounts and balance sheets. Non-availability of regular information has been the main criterion for differentiating the unorganised sector from the organised. Broadly, the unorganised sector covers the entire agricultural sector except plantation crops, operation of the government irrigation system, minor minerals, unregistered

7 7 manufacturing units and all units of non-manufacturing activities except those in public, private corporate and co-operative sector. Further, to survey the unorganised sector the CSO used to conduct the old-fashioned establishment/ enterprise censuses (and follow-up sample surveys). But these enterprise censuses failed to capture the diversities of unorganised sector, as they do not take households as unit of analysis. In recent years, taking lead from the adoption of new international definition of the informal sector (ILO, 1993; SNA, 1993), the Department of Statistics in India constituted an expert group in 1998 to reconcile various concepts and definitions pertaining to the informal sector. The main purpose behind this exercise was to develop a uniform and harmonised definition and survey methods on the informal sector so as to make it internationally comparable and also to count workers and their contribution to output in a more exhaustive manner. The group after long deliberations felt that the informal own account enterprises and enterprises of the informal employers as mentioned in the International Conference of Labour Statisticians (ICLS), 1993 resolutions are conceptually close to two terms used in Indian Statistical System, i.e., own account enterprises and establishments (enterprises with at least one hired worker employed on a fairly regular basis). Therefore, the group recommended implementing, to the extent feasible, the recommendations of the ICLS (1993) and SNA (1993). The expert group also felt that this type of enterprise-based definition of the informal sector would provide a good coverage of enterprises to work out the value addition by industry groups necessary for NAS.

8 8 The above-mentioned enterprise-based definition of measuring the size and contribution of the informal sector is definitely a change for better but it was subjected to a lot of criticisms. The criticisms were mainly from users of informal statistics and increasingly from activists working with the informal workers. According to them, though the enterprise-based definition is useful to identify the size of the informal sector and for national accounts, they fail to count new and emerging categories of workers and their contribution to output. This is because it is difficult to identify such workers as enterprises, as they are mostly single person own-account enterprises and work either-from home or do not have fixed location of workplace. Mostly these workers consist of home-based workers, home workers, street workers and street vendors, domestic and other informal wageworkers. All this leads to underestimation of both workers and output generated in the informal sector. To better capture the new and emerging type of workers it was suggested to define informal sector in terms of characteristics of the persons involved or of their jobs (labour force approach) apart from segmenting them in terms of characteristics of the enterprise. This new formulation for defining the informal sector was intended to be operationalised by classifying workers into formal and informal ones by their status in employment in accordance with the International Classification of Status in Employment. In the light of the above suggestions, it is necessary that any survey to estimate the size and output of the informal sector should be a linked one and detail questions may be put in the questionnaire to identify separately first such unaccounted workers and subsequently their contribution to output. In this regard, it is suggested to net all types of above workers first through household survey and then assess their

9 9 contribution to output (in terms of value added) through follow-up enterprise survey. Thus, it underscores the need to link worker approach with enterprise approach of survey so as to arrive at a better estimate of both size in terms of employment and contribution in terms of value added in the informal sector. Accepting the criticisms and loopholes, the NSSO field-tested the new international definition of the informal sector by conducting first nation wide survey of informal non-agricultural enterprises along with the 55th round labour force survey ( ) with certain modification in the survey methodologies. The survey methodologies were modified to link households with that of enterprises (linked Household-Cum-Enterprise or Mixed Method). For the purpose of the survey, the NSSO defined all unincorporated proprietary and partnership enterprises as informal sector enterprises (as per the SNA definition). This new definition differs widely from the traditional concept of unorganised sector used in India. In the unorganised sector, in addition to proprietary and partnership enterprises, other types of enterprises run by co-operative societies, trusts, private and public limited companies not covered by Annual Survey of Industries are also covered (Kundu et. al. 2001). Thus, the informal sector is conceptually considered as a sub-set of the unorganised sector (NSSO, 2001). In Indian context, the latest version and the most acceptable definition of unorganised sector and unorganised employment has been recently given by the National Commission for Enterprises in the Unorganised Sector (NCEUS) which has combined all the definitions as below: "The unorganised sector consists of all unincorporated private enterprises owned by individuals or households engaged in the sale and production of goods and

10 10 services operated on a proprietary or partnership basis and with less than ten total workers". And "Unorganised workers consist of those working in the unorganised enterprises or households, excluding regular workers with social security benefits, and the workers in the formal sector without any employment/social security benefits provided by the employers" (NCEUS, 2007, p 3). In NCEUS definition the terms organised and unorganised are used interchangeably with formal and informal. The Contribution of Unorganised Sector An important feature of labour market situation in India is the predominance of unorganised employment. The dominance is such that since early 80's and even before that more than 90 per cent of the total work force has been engaged in the unorganised sector to earn their income and livelihood. The analysis of trend and pattern of growth in employment shows that, over the years, formal employment growth has always been less than that of total employment, indicating a faster growth of informal employment. Further a broad segment consisting of agriculture (both organised and unorganised) and organised non-farm sector, which currently absorbs nearly 70 per cent of total workforce, is showing the signs of negative growth rate and it is being predicted that these sectors will cease to absorb more and more labour force (Bhalla & Hazell, 2003). In this context, informal employment, especially its non farm segment, is being assigned a dominant role in official committees meant for future additional

11 11 employment generation. For instance the Special Group on Targeting Ten Million Employment Opportunities per year over the Tenth Plan Period ( ) set up by planning commission was of the view that exclusively for generating the desirable high level of employment in the country, one has to target the unorganised sector, including small and medium enterprises (GOI,2002). Another contribution of the unorganised sector is its relationship with the organised sector. Some economists are of the view that there exists a downward linkage between the organised and unorganised sector implying that the latter lives or dies with the former (Stark,1982). It is often considered that an exploitative relationship exists between the two sectors which is the basis of the existence of unorganised sector. This relationship enables the organised sector to procure cheap semi-finished goods and services from the unorganised sector and keep its own cost of production low. The unorganised sector provides cheap consumer products and services such as processed foods, readymade garments, handicrafts, transport, petty trading etc. to the urban population. This sector also plays an important role in recycling the waste materials and producing the goods and services which satisfy the needs of poor people having very low income. Thus, in view of its tremendous importance there is a need to focus efforts and attention to develop a comprehensive understanding about the problems, needs, issues, and changes that are taking place in this sector. It has been recognised by all sections of researchers and writers that the working and the labour conditions in the unorganised sector are deplorable and in fact, the unorganised sector is at a disadvantageous position deserving supportive policy measures. This, however, in no

12 12 way reduces its significance in populous country like ours. Unorganised sector has become a perennial source of employment generation. It is surprising to note that this sector absorbs more than 90 per cent of the total work force in our country. The size of the unorganised sector has been substantial although it shows a declining trend. The majority of Indian workers being employed in the unorganised sector also produce useful products and many organised sector industries depend on informal sector for the supply of raw materials. Thus, the unorganised sector not only provides income earning opportunity to the poorer group of population but also feeds the industries of the country. Unorganised sector has established itself to be the only source of survival of a large segment of female work force in particular. An increasingly large portion of women has been absorbed by this sector and importance of unorganised sector for its role in absorbing the women workers is undeniable. Furthermore, due to the availability of cheap labour in this sector, there is chance of more and more activities directed to this sector. Thus, it can be concluded, that the unorganised sector has a place of its own and plays a significant role in the process of economic development. It provides substantial employment opportunities to those who otherwise would have been openly unemployed. Its products and services are low priced and so they help to keep the cost of production of formal units and cost of living of the urban population low. If properly nurtured it can expand and develop optimally and can play an important role in the process of economic development. Due to the important role of unorganised manufacturing sector, various studies have been conducted on unorganised sector in general and manufacturing sector in particular. A few of these studies are highlighted below.

13 13 Review of Studies Right from early seventies a lot of research has been undertaken in the field of unorganised sector in general and unorganised manufacturing sector in particular. The available literature shows that the researchers have chosen three fields in particular i.e. theoretical studies, micro level case studies and macro level empirical studies. In order to understand its nitty-gritty we shall have to comprehend the available literature. In the case of unorganised sector, sufficient literature is available regarding the scope, concept, usefulness and applicability of this sector. Some of these studies are given here in chronological order:- Weeks (1975) used an input-output framework method to analyse the determinants of growth of output and employment in the informal sector particularly with reference to the less developed countries. In order to simplify he divided the economy into informal, agricultural, private formal and government sectors. During his research he came to the conclusion that the changes in the aggregate demand, technical changes and changes in consumer tastes are largely responsible for affecting output and employment in the informal sector. According to him informal sector is a dynamic and a low wage sector whose development requires concrete development policies ending special privilege to the formal sector and greater emphasis on development of agricultural field and encouraging the formal units to grant subcontracting to informal sector units. This would lead to strengthening the informal sector. Banerjee (1983) conducted a sample survey during to test whether informal sector employment is a temporary staying post for the new migrants.

14 14 Evidence showed that fifty per cent of the migrants to Delhi had been attracted by the opportunities in this sector itself and they had moved to Delhi after pre arranging their jobs. Earnings were lower in informal sector than in formal but returns in terms of education and experience were same in both the sectors. Dhesi and Wadhwa (1983) attempted to analyse the characteristics of the participants and enterprises in the informal sector and their linkage with the formal sector in Nangal (Punjab, India). In their study they found that the average employment per enterprise was only 1.6. The study further pointed out that most of the entrepreneurs started with little amount of initial capital and the source of investment for majority of them was their own saving or that of relatives and friends. Most of the informal enterprises were in the trade sector. It was followed by services and transport. Gangrade and Gathia (1983) attempted to study the women and children in unorganised sector. They aim at examining what is work and what is unorganised? Why are certain workers excluded in the census measurement and certain others not. What is the employment structure in this sector? What kind of projects and programmes will help working women in informal sector to move towards a self reliant spirit and increase their confidence? How are working women in the informal sector to be formulated? They classify the working women into three categories on socio-economic basis-(1) Agricultural worker and those engaged in traditional menial services. This group is the largest and very poor. Their counterparts in urban areas are construction labour, migrant workers, domestic servants and self employed women in

15 15 the informal sector. (2) The second category mostly comprises of women who work in offices or are professionals. They can be called blue-collar women workers. (3) The third group includes those women who are better educated and enjoy economic security but they are small in number. Women from this category work for improving their living standard and for self actualisation. The author concluded that women in the informal sector face many problems- low wages, long hours of work, insecurity regarding job and sexual harassment etc. but most of these women work for economic reasons. In some cases women take up jobs to support the family income. In few cases, jobs are taken up for leading a life of independence of self actualisation or of escaping boredom. Some unmarried women have to take up jobs to help save money for their dowry. Manohar (1983) discussed the exploitation of women in unorganised sector with reference to male dominance. He stated that women were dependent and subservient, which forced them to live under miserable social and economic conditions. Poverty and other economic difficulties forced them to take up menial jobs where education is not essential e.g. maximum women workers were employed in bidi industry, cotton textiles, domestic servants and weaving etc. Romatet (1983) conducted a survey of Kolkata s informal sector to have an in depth study of its characteristics. He focused mainly on tailoring industry, tanneries and the plastic processing units situated on the outskirts of eastern Kolkata. He found that the slums are not only densely populated but are the hubs of intense informal economic activities. According to him the immediate needs were bank credit at very

16 16 nominal rate, redirecting government demands towards the units directly, removing the middle man, supply of raw material at reasonable rate and prevention of exploitation of the informal units at the hands of organised economic agents. House (1984) conducted a survey of informal sector enterprises in Nairobi. He found out that the most of the proprietors in the informal sector were urban residents of long standing and not recent migrants. Though, the initial capital requirements were low, yet most of the entrepreneurs had cited the capital shortage as their major problem. Ahluwalia (1985, 1991) studied for the period 1959 to 1985 to examine total factor productivity. The studies show that during the two decades of the sixties and the seventies, total factor productivity in the manufacturing sector declined. However, there is also a finding that in the first half of eighties productivity growth improved. The dominant source of the acceleration in total factor productivity has been the growth of value added. Bandyopadhyay and Hillary (1985) observed an increase in the participation of women in the Kolkata labour force, due to a combination of high male unemployment, falling urban living standards and some increase in employment of a semi or unskilled kind for which women workers are positively preferred. He opines that precise effects of women s participation in wage work on the family based household have received little detailed attention until recently. This is particularly the case in many third world urban contexts where female labour force participation rates have been traditionally low until the recent emergence of opportunities for women in new gender-segregated industries, such as electronics assembly.

17 17 Anand (1988) had a deep insight into the conditions of the lower caste Tamil migrants in Delhi. It was pointed out that women migrants are found to be more adaptable to their surroundings even though they do not know the language. They get work easily as compared to their male counterparts. The occupations they enter are mostly informal in character. Datta Chaudhary (1989) tried to analyse whether theoretical analysis supports the assertion that informal sector is dependent on formal sector. Using fixed coefficient of production and full utilisation of the available resources, he proved that the general equilibrium framework of the economy permits expansion of the informal sector along with shrinking of the formal sector employment and output. It was also inferred that cheap credit to informal sector would force the formal to fan out its requirement of intermediate goods to the informal sector. So the informal sector can expand in the face of contracting formal sector. But when the formal sector completely specialises in the production of final goods with the informal sector meeting the total demand for intermediary goods, a stage would arrive where the informal sector will live or die with the formal sector. Saran and Sandhwar (1990) studied the problems of the women workers engaged in unorganised sector of brick kilns, quarries and mines of Bihar and West Bengal. It was revealed that the women working there were exploited, low paid, worked for long hours i.e hours in case of migrants and around 10 hours in case of local workers. Majority of them were illiterate and belonged to scheduled castes, scheduled tribes and backward classes. Indebtedness was also commonly found among them. Further, rebuking, cheating, threatening, beating and sexual

18 18 abuses were very common features reported by women working in unorganised sector. Shaw (1990) analysed the interactions and linkages between informal sector and large scale sectors in Thana-Belapur region based on field survey during September to December It was found during the study that large units have important forward linkages with informal sector units but unfortunately the informal sector workers faced health related risks and labourers were by and large women folk. Banerjee (1991) attempted to analyse the impact of new export oriented industries on women workers in India. She had covered main industries viz. leather, garment, silk spinning etc. The focus was on the relationship between technologies, market conditions and service conditions of women workers. The conclusions drawn are that these women did unskilled works, worked for long erratic hours and under miserable working conditions and terms of work. Kundu (1993) discussed in detail the problem of comparability of secondary data relating to unorganised activities in India. Using different sources he tried to access the macro dimension of the urban informal sector both at the national as well as state level. In spite of certain limitations accepted by him his study shows that the informal sector in urban areas has grown at a faster rate as compared to the organised industries or the rural unorganised industries. During 1961 to 1985 in states like West Bengal, Maharashtra and Gujarat growth has been largely impressive. Kundu is of the opinion that the growth of informal sector in the developed areas is primarily because of the complimentary relationships between formal and informal activities where the jobs are sub contracted by the former to the latter. The growth of informal sector in

19 19 less developed areas is because of the survival strategy and taking up the traditional and low productive activities by the poor residents. Balakrishanan and Pushpangandan (1994) studied total factor productivity growth for Indian manufacturing from to The statistical analysis confirms a turnaround if total factor productivity estimates are derived from the value added single-deflation series. The point however is that if total factor productivity index is derived by double-deflation there is an absence of an increase in the growth rate of total factor productivity. Guhan (1994) has emphasized the importance of protective type programmes (old age pension, maternity leave etc.) for the unorganised workers. Most of the new employment in future will take place in unorganised sector which is characterised by poor condition of work, low earning and lack of any social security. Ensuring basic minimum measures of social security in unorganised sector should be an important concern of a public policy. Some of the targeted anti-poverty programmes have remained unsuccessful because of the problems of centralised approach and review system. On the other hand the protective type programmes such as old age pensions, widow pensions, survivor benefits etc, provide a certain degree of financial help to poor persons. The other benefits of protective measures are their simplicity and relatively low administrative cost. Mitra (1994) conducted an empirical study to estimate the nature of relationship between formal and informal sector employment for various urban centres in India. The research was based on the secondary data for He found that the percentage of informal sector employment in the total work force differed

20 20 from as low as 21.3 per cent in Chandigarh and 39.4 per cent in Howrah to as high as in Shahjahanpur and 92 per cent in Dumdum. This percentage was found to be significantly negatively correlated with the size of the city in terms of population. A significant negative relationship was found between percentage of informal employment and percentage of organised industrial employment. However the relation between the absolute employment in the informal sector and that of in the formal sector was found to be positive. Shaw (1994) emphasized in his research to look into the manufacturing activities in the informal sector in India particularly with reference to the growth of these activities during 1971 to According to the data collected by her, the share of informal sector in the total manufacturing employment reduced from 82.5 per cent in 1961 to 69.3 per cent in 1981 but after that the trend reversed and the modern dynamic part of the informal sector expanded slowly. On the other hand, there was a sharp decline in the traditional home based industries. She found that the states like Maharashtra, Tamil Nadu, Karnataka, Andhra Pradesh and Madhya Pradesh accounted for nearly 58 per cent of the net value added from the registered small scale industries. Maharashtra, Tamil Nadu, Uttar Pradesh, Andhra Pradesh, Gujarat, Punjab, West Bengal and Karnataka were the major contributors. In terms of the employment, states like Tamil Nadu, Maharashtra, Uttar Pradesh, West Bengal and Gujarat accounted for the 54 per cent of the total. Maharashtra, Uttar Pradesh, Gujarat and Karnataka came out to be the leading states in terms of the fixed assets. The main industries were chemicals and chemical products, basic metal industry, metal products, electric machinery and its parts, rubber and plastic products and the food

21 21 products. She concluded that the informal sector can develop more with the active government support both in terms of encouraging investments and providing infrastructure facilities. Sultania (1994) conducted a study at micro-level in the major parts of Jaipur city on the women workers engaged as contract labourers. The main analyses were based on the causes of inequality of women as contract labourers and its impact. The characteristics, profile and recruitment were also dealt with. The women workers in the unorganised sector generally experience sexual and socio-economic exploitation. They are illiterate, earning fewer wages, experience male dominance, work for hours daily, have no medical or leave facilities and so are under pitiable state of affairs. Chandola (1995) studied the nature of garment manufacturing units and women workers in unorganised segment of these units situated in Lucknow, Kanpur, Varanasi and Delhi. The emphasis was that the industry practised wage exploitations, the production process was fragmented and decentralised. The decentralisation of unorganised sector was done with a view to have cheap labour and escape government regulations. The women worked as piece rate workers; there was easy entry into the labour market which forces them to seek employment as unorganised labour leading to exploitation. Bhagwat (1996) studied analytically the process of gender construction in the context of urban growth which differs for caste, class and religious backgrounds. This study mainly focuses on work sphere. The size of sample for the study was 254, with 70 per cent from unorganised sector, invisible labour and housewives. The majority of

22 22 women in unorganised sector were generally migrants from rural areas. They worked for hours daily, earned low wages, experience sexual harassment and physical exhaustion. David (1996) discussed the structure and composition of urban unorganised sector. It was found that the unorganised sector faced two major problems. Firstly, this study found that increasingly a large segment of this sector employs work population which is forced to live at margin of survival. Secondly, given the availability of cheap labour in urban unorganised sector, employers are likely to divert activities to the organised sector. The non-institutionalised unorganised sector comprises workers doing casual work like the domestic servants, sweepers, scavengers, vendors, hawkers and those who are self employed. The urban women working here face insecurity, no legal protection, long working hours and are paid very less. Funkhouser (1996) tried to examine the patterns of employment and structure of earning in the urban informal sector. His study was largely based on five Central American countries like Guatemala, El-Salvador, Honduras, Nicaragua and Costa Rica. He found that the size of informal employment was between per cent of labour force in the first three countries while in Costa Rica it was about per cent. In Nicaragua it varied from 45 to 63 per cent. There were substantial returns to human capital and experience in the informal sector in each country. Other significant findings were negative relationship between level of education and informal sector employment and higher probability for poor family to get employed in the informal sectors.

23 23 Sundaram (1996) drew almost same conclusions with respect to other authors in this field. He projected that, women workers in unorganised sector were generally illiterate, had high unemployment rate as compared to men in this sector and worked under exploitative working conditions. It was also brought forward that these women were sliding down to low paying or unpaid work, which worsened their conditions. The factors responsible for the prevailing conditions of women of unorganised sector were poverty, unequal distribution of income, illiteracy, disparity and male dominance. Loayza (1997) opines that the increase in the size of the informal sector undermines growth by reducing the availability of public services for all and one in the economy and by increasing the number of activities that use existing public services inefficiently. Gajalakshmi (1998) empirically analysed women workers employed in unregistered shoe factories in Tamil Nadu. The women working here are from backward classes and scheduled castes. They earned low income, have low educational level, live in poverty and work for long hours. These women mainly work to supplement the low family income in order to make two ends meet. Jhabvala, Renana (1998) in her study at macro level, emphasized on the need for social security for women workers and explored the mechanism for social security provisions, insurance, social security funds for women in unorganised sector. The employment based programmes should have social and financial security for women in the unorganised sector. Kundu and Lalitha (1998) studied the decline in the share of informal sector in general and urban informal sector in manufacturing sector employment in particular,

24 24 in late eighties and early nineties. Using NSSO data and considering OAMEs and NDMEs as the two components of the informal manufacturing sector, they showed that the growth profile in the informal manufacturing sector has shown two opposite trends. While during there was a significant rise in both employment and number of enterprises whereas the period of saw a complete reversal of the trend. It is argued that the growth of the units or employment for that matter does not show any correspondence with improvement in their productivity. Most of the units have no other alternative because being in business is a survival strategy for them. Only a very small segment of this sector reacts and responds to the market forces and is linked to the organised sector and its growth is linked to its productivity. Its productivity is affected by the varied factors like registration with public agencies and access to land and credit etc. Mahadevia (1998) studied the declining importance of Ahmadabad city in the context of industrial development process of Gujarat. She also analysed the impacts of informalisation of employment on urban poverty in the context of privatisation, liberalisation and increase in the urban cost of living etc. According to her the industrial decline in Ahmadabad is not because of overall industrial deceleration in the state but because of changing character and pattern of industrial development and nature of industry. The decline in the growth rate of organised sector can also be explained by vested interests to make the big cities the residential cities for the elite. Mitra (1998) tried to estimate informal sector employment. He used several alternative data sources for this estimation i.e., direct method using economic census data and residual approach using Census and DGET- EMI data. These states were

25 25 then ranked according to the relative size of informal sector expressed as a percentage of total employment in the non-agricultural sector, using these alternative measures. A close correspondence between the rankings of the states using these alternative sources was obtained. The association between the incidence of informal employment and factors like urbanisation and industrialisation were found to be negative, while that with incidence of poverty was found to be positive. Developing linkage between formal and informal sector, integrating the informal sector with the main stream of the economy so that it can take the advantage of globalisation, come out as important points in their research. Pandey (1998) examined the nature and types of migrant workers, temporary (seasonal) and permanent in the light of socio-economic order and analysed the strategies and employment patterns of the female migrants from Maharashtra. It was brought forward that in the temporary type of migration in unorganised sector, the migrants worked for long working hours with low wages and without any legal protection of job security. The factors aggravating their pitiable conditions are lack of sanitary facility, unsafe conditions and gender discriminations. These women mainly worked in unorganised sector to supplement the family income and face all other hardships of life. These seasonal migrants generally come to workforce through the contractors as a whole family or at least as a couple. Rao (1998) studied the general profile of the women workers in beedi industry at macro-level in India. The production of beedi is at corporate industrial level on the line of cottage industry. These women s earnings are meagre. They work on piece rate basis and earn as low as 40 rupees for 1,000 beedies rolled. The leading states in case

26 26 of beedi manufacturing are West Bengal, Kerala and Tamil Nadu. The beedi workers are exposed to dust and nicotine, causing respiratory diseases and infertility in young women. Shah (1998) in her study attempted to examine the growth linkages between small and large scale sectors and the pattern of small industries cluster and the implications of such linkages for productivity and employment in the various segments of the small scale sector. Her research showed that the states of high incidence of factory sector also have high incidence of unorganised sector (comprising of three scale based categories of OAMEs, NDMEs and DMEs) which may be due to the size effect. The study suggests that there is a clear pattern of upward shift within the scalar hierarchy. The growth of DMEs and the SSI at the cost of lower categories is considered as a welcome trend, since value added and emoluments per employee increases as we move upward along the scale category. The author has emphasized the modern character of the DMEs and its emergence as a dynamic segment of the unorganised sector. Sharma (1998) analysed the issue of linkages between the formal-informal sector and different modes of production. The informal sector is not an independent exclusive circuit. A variety of linkages help to nurture the growth of this sector. This depends on the nature and type of linkages. These linkages may be direct in terms of resource inputs, technology or market. Indirect linkages refer to the demand for goods and services generated in the informal sector by a clientele whose income is drawn from the formal sector. The informal sector, therefore, becomes a safety net not only for the poor but also for others thrown out of jobs especially during periods of prolonged recession and during structural adjustment programmes.

27 27 Swarooparani and Galab (1998) conducted a primary survey of sandal making activities in the slums of Hyderabad city. This study breaks the common belief that assured market solves the problem of low productivity and low income of the informal sector. The study was based on sample units which were divided into two categories. The first group comprises of those operating as untied units and carrying out independent production. The second group includes those who are operating as tied production units and carrying out contract production. Unni, (1998) reviewed the concept of work, production boundary, unorganised sector, and certain categories of workers. She also analysed various methodologies for estimation of labour force and contribution to gross domestic product. It has been stated that the unorganised sector and other hidden economic activities have gained prominence in the context of structural adjustments, globalisation and other problems. But emphasis is laid to recognise the work of unorganised sector workers specially the women workers since their employment in this sector is significant and bear the maximum brunt. Chadha (1999) studied the growth dynamics of different segments of informal manufacturing sector in India between and separately for rural and urban areas. It was found that OAMEs in order to economise their available capital and to take full advantage of cheap labour move towards a labour intensive technology and hence its capital labour ratio is declining. Labour productivity is higher in the urban manufacturing sector than that of its rural counterparts. His study also showed that the units having high productivity are not necessarily the units that have registered high growth in employment or enterprise.

28 28 Goldar and Mitra (1999) in their study attempted to measure the total factor productivity growth (TFPG) in informal manufacturing sector in India. The solow index of TFPG, which is measured as difference between growth rate in value added and weighted sum of growth rate of capital and labour, is used. Papola and Sharma (1999) conducted a study that there is marginal increase in labour force participation of women in unorganised sector. The gender discrimination for work is more prevalent in unorganised sector labour market. They suggested that the interventions of non- government organisations, governmental organisations and women activists for increasing opportunities and strengthening capabilities will reduce imbalances and bring gender equity in employment. Ramaswamy (1999) is of the opinion that the lack of strong complementary relationship between the large and small firms is regarded as one of the major limitations of the development of small manufacturing sector in India. Of late, sub contracting and outsourcing are emerging as important developments that connect small and micro units with larger units to the benefit of the both. He pointed out that the increased growth of the unorganised sector in recent years was a result of substantial increase in outsourcing by the organised sector. Srinivasan (2000) looked into conceptual issues of the unorganised sector along with profile of women s employment and its trends. It was observed that women workers move to the sectors where they have no legal protection and so have little bargaining strength. Non-farm employment hailed as the panacea for surpluslabour in agricultural sector.

29 29 Bhalla (2001) computed the total factor productivity growth for two periods, to and to in unorganised manufacturing sector. In the first period she observed a high positive growth in NDMEs in rural areas and a high negative growth in DMEs in urban areas. Total factor productivity growth in the second period was negative in both types of enterprises in urban and rural areas. Juan (2001) has pointed towards the need to provide essential social security to the work force in the unorganised sector as it has become urgent in the context of the consequences of economic reforms. There is a need for a new algebra of efficiency and productivity, which views social policy not as a cost but as a sound reason: which can quantify, for example, the economic benefits of good industrial relations, social security and safety measures at work. Basically his emphasis is on the need to develop the concept of Social Efficiency or in other words, on Marginalised Economic units and workers who are characterised by decent work deficits: labour standard deficits, worker productivity deficits, job quality deficits, social protection deficits and organisational cum-representational deficits. Unni and Rani (2001) presented a broad definition of social protection to include basic securities, such as income, food, health, shelter and economic securities including income generating productive work. A conceptual framework was developed to analyse the causes of insecurities of informal workers, identify the core needs of social protection, develop instruments and visualise the institutional mechanism to address these needs. Using evidence from a micro survey of household, they stressed that the insecurities of informal workers arise not only from random shocks but also from the structural features of the household and their nature of work.