Sectors of the Indian Economy
Organised and unorganised sectors
Distinguish organised from unorganised work and explain why unorganised workers need protection.
Kanta and Kamal. Two neighbours, two very different jobs.
- Kanta has an office job with fixed hours (9.30 a.m. to 5.30 p.m.). She is paid a monthly salary, provident fund, medical and other allowances, and Sundays off with pay. She got an appointment letter with all her terms.
- Kamal is a daily-wage worker in a grocery shop, from 7:30 in the morning till 8 at night. He gets only wages, nothing for days he does not work, no leave, no letter of employment, and can be told to leave any time.
The organised sector. Places of work with regular terms, so people can count on their work. The government registers them, and they must obey laws like the Minimum Wages Act, the Factories Act, the Shops and Establishments Act and the Payment of Gratuity Act. Workers get:
- job security and fixed working hours, with overtime pay for extra hours;
- paid leave, paid holidays, provident fund, gratuity;
- medical benefits, safe drinking water and a safe workplace;
- a pension after retirement.
The unorganised sector. Small, scattered units, largely outside government control. Rules exist but are not followed.
- Jobs are low-paid and often irregular.
- No overtime pay, paid leave, holidays or sick leave.
- No job security: people can be sent away without reason, or when work is slack, depending on the employer's whims.
It also includes many people who work for themselves: street sellers, repair workers, and farmers who hire labourers when needed.
How big is each? (Table 2.3, late 1990s). Of all India's workers, the primary sector had 232 million, the secondary 115 million and the tertiary 128 million. In agriculture, almost every worker was in the unorganised sector. Overall, only a small minority of Indian workers had organised-sector jobs.
Why workers need protection. Organised jobs are the most wanted, but they have grown very slowly. Many organised firms also run partly 'informally' to avoid taxes and labour laws. Since the 1990s, many workers have lost organised jobs (when factories close, former regular workers end up pushing carts or doing odd jobs). So many are forced into low-paid, insecure unorganised work, where they are often exploited.
Who is most at risk?
- Villages: landless farm labourers, small and marginal farmers (nearly 80 per cent of rural households), sharecroppers, and artisans like weavers, blacksmiths, carpenters and goldsmiths. Farmers need timely seeds, inputs, credit, storage and markets.
- Towns: workers in small-scale industry, casual construction, trade and transport workers, rag pickers, street vendors, garment makers and head-load workers.
Most scheduled caste, scheduled tribe and backward community workers are in the unorganised sector, and also face social discrimination. Protecting these workers is needed for both economic and social development.
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