Unorganised Sector Workforce in India

Trends, Patterns and Social Security Coverage

India’s workforce comprises nearly 92 per cent in the unorganised segment, with the entire farm sector falling under the informal category, while only one-fifth of the non-farm workers are found in the organised segment. Estimates suggest that in the non-farm sectors, as we move up the income ladder, the share of the informal sector gradually declines. However, as far as the agricultural sector is concerned, irrespective of economic class, the share of the unorganised workforce remains flat. Further analysis reveals that the coverage of social security schemes has been extremely sparse among the economically and socially vulnerable
sections. The pro-rich, pro-capital policy of the present regime is eflected in the recent downward revision of the interest rate to the subscribers of provident fund. Further, the move towards defined contributory schemes away from defined benefit schemes of pension funds is fraught with danger. Therefore, we argue that given the poor affordability and lack of an institutional mechanism, any design of social security that relies
heavily on a contributory basis is bound to fail dismally.

Across the globe, neoliberal policies are uprooting social security mechanisms that have been long in place in most of the developed and developing economies. The statebased social security system is giving way to market-based fundamentalism. The contemporary model of globalisation typically perpetuates and thrives on its central theme of “risk taking” and “insecurity”. The present phase of capitalist onslaught rooted in the Washington Consensus works through a model in which
the working class is left to bear much of the worst forms of insecurity, while large-scale asset-holders are relatively well shielded from insecurity. Although the “ageing crisis” has been thrown up as the reason for watering down social security institutions and policies in developed market economies, the bogey of “fiscal stress” is often cited as a reason for destroying these institutions in developing economies. However, it is another story that in many developing countries, the social security system is unavailable to a majority of working population. Although the
need to provide employment and social security is crucial for the poor and other vulnerable sections of population, even after over half a century of development policies, there does not appear to be any effort to ensure this for large sections of the working force. Rather, recent efforts in many developing economies go to show that the unorganised labour force is left to fend for itself, as more and more workers are added to the army of informal job markets. Bulk of India’s workforce is unorganised in nature. While almost the entire farm sector can be characterised as informal, roughly 80 per cent of the workforce in the non-farm sector is
informal. In this study, we have delineated unorganised from organised workers using both residual and direct approach. The study examines the growth and structure of formal and informal sector workforce by one-digit industry across major Indian states.We have examined the coverage of social security schemes among economically and socially vulnerable sections of the workforce, with particular reference to provident fund schemes in India.

Unorganised Sector Employment:

Over half of India’s national output comes from the unorganised sector. While employment in the formal sector has been stagnant in the last decade, employment creation in the informal segment of the economy has been tremendous. It is evident that throughout this period an verwhelmingly large portion of the workforce in India is found to be employed in the unorganised sector. Out of 399 million workers in 1999-2000, it is estimated that 371.2 million workers (nearly 93 per cent) are employed in the unorganised segment of the economy whereas only 27.8
million workers (7 per cent) are engaged in the organised sector. The share of unorganised employment in the economy has displayed markable steadiness over the years. The share of informal employment has risen from 92 per cent (nearly 276 million out of 300 million) in 1983 to 93 per cent in the 1999-2000. It is clear that employment opportunity in the organised sector has remained more or less stagnant, showing only a marginal increase from 24 million in 1983 to 27.8 million in 1999-2000. The near stagnancy of employment opportunity in the organised sector becomes evident, where the compound annual growth rates of employment in the organised and unorganised sector are sented. Employment in the organised sector has registered a growth of 1.25 per cent between 1983 and 1987-88 and 1.26 per cent between 1983 and 1993-94. But during the decade of the 1990s, we witness a sharp decline in employment opportunities. During this period organised employment
grew by only 0.34 per cent. Overall, the decade of the 1990s in India has been characterised by slow growth in employment opportunities. This is also true for the unorganised sector of the economy. The stagnancy of employment opportunities in the organised sector in the 1980s has to a large extent been compensated by a significant expansion of workforce in the unorganised segment of the economy. We observe that during 1983 to 1987-88, employment in the unorgansied sector grew by 2.05 per cent while during the period of 1983 to 1993-94, the growth rate was around
2.27 per cent. This fact clearly indicates that unorganised sector served as a buffer for the workforce when the employment opportunity in organised sector dwindled. However, the unorganised sector also underwent a sharp slump during the 1990s with the growth rate of employment falling to 1.25 per cent.

Existing Social Security Schemes:

As of today, there are a variety of social security policies and institutions in India – both promotional and protective. While promotional measures include financing and provision of education, health, nutrition, employment, etc, protective ones on the other hand, comprise pension and provident funds, maternity benefits, sickness allowance, employees’ state insurance, etc, which are provided to the workers. Protective measures are largely available to the central and state government employees in specific and to the minuscule organised workforce in India
in general. Employees’ provident funds available for the workers in India
are essentially a statutory form of compulsory saving schemes that enable old and retiring workers to maintain their living standards in post-retirement years. The Provident Fund and Miscellaneous Provisions (PF and MP) Act dates back to 1952. The act applies to units engaged in any industry listed in schedule I and where 20 or more persons are employed. Further, it is also applicable to any other establishment employing 20 or more employees or any class of such establishments, which the central government may notify in the official gazette from
time to time. Under this act, as on March 2005, there are an estimated 4,08,831 units and 4.11 crore workers covering 180 odd industries. The progressive contribution received towards the employees’ provident fund as on March 2003 is put at Rs 1,08,510.14 crore.

Coverage of Social Security Scheme in India

In this section, we intend to examine the coverage of social security schemes in India by different groups. We confine our analysis here only to the examination of employees’ provident fund. Employees’ provident fund is one of the largely available social security instruments in India for workers. It is estimated that roughly four crore workers are presently covered by this instrument. The latest round of the 55th round of National Sample Survey (NSS) collected information regarding the coverage of provident fund among workers (specific data was obtained as to whether the workers were covered by provident fund or not and if yes, whether they are covered under (i) general provident fund; (ii) Contributory provident fund; (iii) public provident fund;
and (iv) combination of GPF, CPF, PPF).
Irrespective of the quintile groups, results suggest that nonfarm unorganised sector workers have been virtually been left out of social security arrangements, and the accompanying chart attests to this fact. As far as organised sector workers are concerned, 90 per cent of the richest groups avail provident fund facility. Further, it appears that only 55 per cent of the poorest among non-farm organised segment of
workforce are covered under the provident fund system in India.
Overall, in the non-farm sector, as against a paltry 5 per cent of poorest, 35 per cent of the richest workers avail provident fund benefits.


India’s workforce comprises nearly 92 per cent of unorganised workers, with virtually the entire farm sector falling under the informal category, only one-fifth of the non-farm workers are found in the organised segment. Utilising both residual and direct approaches, the study uses the last four quinquennial rounds of employment-unemployment of national sample survey. The study examines the growth and structure of formal and informal sector workforce by one-digit industry across major Indian states. Estimates suggest that in the non-farm sectors, as we move up the ladder of income, the share of informal sector gradually declines. However, as far as the agricultural sector is concerned, irrespective of economic class, the share of the unorganised segment of the workforce remains flat. Further analysis reveals that the coverage of social security schemes has been largely against economically and socially vulnerable sections. While regular workers are largely covered by the provident fund regime, the ever increasing army of casual and contract workers, even
in the organised sector appear to have been discriminated against, not to speak of the entire self-employed, which accounts for a significant roportion of India’s workforce. Although the statutory provisions of provident fund are supposed to be applicable universally among industries specified in schedule I, the evidence clearly points to a dismal state of affairs. Hence, there is a crying need to enforce the same in the industries covered apart from revising the list (enhanced) of industries continuously. It is in this context, constant skirmishes from the ruling class to “reform” provident fund must be resisted tooth and nail. The
current interest regime of provident fund is being “liberalised” from the earlier administered regime. Recent efforts by the present government in revising interest rate downward from 9.5 to 8.5 per cent to the fund subscribers must be seen in this context. This is a clear case of transfer of income from labour to capital. The Pension Fund Regulatory and development Authority (PFRDA), 2005 is only a prelude to the larger design of privatisation of pension and provident funds. Global pension
fund managers find that the huge corpus fund that Indian ruling class is offering them on a platter irresistible. Moving away from defined benefit schemes to defined contributory schemes is fraught with danger. The exposure to risks of shifting to contributory schemes arising from future adverse investment return, etc. will have a serious bearing on the workers fragile savings. As far the larger issue of extending social security easures to the unorganised sector is concerned, we argue that given the poor affordability and lack of institutional mechanism, any design of social security that relies heavily on contributory basis is bound to fail dismally.

Building an employment brand: Responsibilities of a HR executive

A great work place is where each one of us wants to find ourselves in. But which is the right place? Your prospective employee will also have this question in his mind. If you want your company name to pop up in his mind, get ready, you have a great deal of work to do - Build an employment brand for your company.

Employee brand is a relatively new coinage but definitely a critical factor which will help you resolve most of your recruitment hardships. It is all about being a company where people will want to work. And definitely stressing on literally "being a company where people want to work", because unless you have a great workplace you cannot create such an image.

How can a good employment brand help me as a HR?

You will surely love it if you do not have to struggle in convincing your prospective employees about the positives of joining your company, right? Having a brand image as a good employer will help you:

Keep ahead in the talent war
Attract and induce the right kind of people you are looking for
Enhance your ability to get quality resumes to choose from
Retain your existing employee pool
Subsequently see a dip in employee turnover
How can I help in building the company brand?

Being in the HR space, you have the most potential to drive the company towards building its brand. Perhaps you should be the spearhead of this project. Before you start, remember that building a brand cannot happen overnight. It is a long term strategy which needs a complete relook at the way your organization works.

So, where do I start? Once you get your top management convinced about your strategy, go ahead with setting your brand objective. Be clear as to what is the employment brand image that you want to achieve. This is the first step and you proceed with your internal strategies and slowly move into external promotional activities.

Encourage your senior management to support best practices in HR

Value, vision and practice have to start with the key strategy players - the top management. Get their support to implement best HR practices in your organization and you are sure you can head start to create a great work place.

Build a great work place

If salary is not the only measure of good work place anymore, then what are employees looking for?

Freedom of work
Good work culture
Leadership opportunity
Recognition for good work
Learning and career growth
Flexibility of timings
Challenges and responsibilities
Job Security
Good work life and social life balance
In simple terms, be a good employer and give your employees the maximum reasons to reject another job offer and stay on with you.

Most valuable! Make your employees speak good about you

Make them feel good and they'll speak good. There is nothing like a satisfied employee who spreads the goodwill of the company by word of mouth. He is speaking from his experience and he is the best brand ambassador you can find.

Help your company develop a space in the recruitment industry

While calling for resumes, word your advertisement in such a way that you build your company brand on terms of credibility and employee welfare.

Create a public image through PR

Public relations can help you build a credible brand image through newspapers reports and magazines. Getting listed in those ‘best employers' surveys will add a lot of value.

Youth You can Win

The world is closing in

Did you ever think

That we could be so close, like brothers

The future's in the air

I can feel it everywhere

Blowing with the wind of change...

- Scorpions


When I was a teenager, I always admired my seniors. The so-called "youth" of that era always left me in awe - they wore loose-fitting denims; they listened to Bryan Adams; they chewed gums in front of their folks; they studied only after midnight and they ordered Pizzas. They were my icons - my pin-ups. I wondered if ever I could be like them.


Then, I do not know what happened and the "youth" in India changed. Changed forever. It was like moving from a good, ol' Amby to a Phantom, Yes, the fissure was so deep and so wide.


Today, India makes an appearance in nearly every debate across the globe. Suddenly, India is an economic competitor to the first world countries; is talked about for reasons other than Kashmir, its dismal poverty levels and corruption status and a mystical religion.


And I hold the transformation of youth culture in our country responsible for this stark change in attitude towards our nation across the world.


Today, we are the youth of the nation - we carry the shoulders that lug the present and the future of the country. We have a lot more of choice; a lot to look out for. A lot of things that we are forced to miss out on; a lot which we cant even dream of overlooking. Like I said, our lives have changed from those who were at our age, a decade back. And how!

Ours is NOT a confused generation. Ours is a generation of too-many choices. Generation Question Mark, as I would put it.

Look at the choices we have - from Big Boss to OC; from Roadies to Apprentice; from Sin City to Planet Earth; from cargoes to slim belts; from IBN7 to CNN; from WWF to F1; from Sachin Pilot to Nicolas Sarkozy; from Anil Ambani to Lakshmi Mittal; from farmer suicides to Noida homicides; from Ipods to LimeWire; from viral marketing to Facebook- the choices that we are exposed to are far too many than we can retain. I do not want to get into the physiological and biological details - but am sure the facts are in place. The information feed is a lot more than the preserving capacity. A classic case of Supply Economics - surplus supply!


In this era of too many choices, I saw something the other day which propelled me to write this article. A premier music channel in the country recently launched their Youth Icon campaign this year with some unusual nominees. Like, Orkut, Multimedia phone, Rang De Basanti, Abhishek Bachchan and YOU!

Gosh! So true and so precise. Like I said, our times have changed and so have our icons.

Orkut has become more than a social networking platform for youth. 70% of the Orkut members are youth - a staggering 15% of Orkut users are Indians. Orkut has become a podium to connect - a table where you can meet, greet, flirt, talk, discuss, ideate and interact. A whole new virtual world has opened up - a world where every element of you is transparent; a world where you are being yourself.

Similarly multimedia phones have become an integral part of our lives. We need music; we need videos; we need cameras; we need to access or mails; we need updates on Cricket scores or for that matter, we want to watch the match live while on the move - the mobile phone gives us everything today.

Rang De Basanti is definitely a clutter-breaking movie - it is a film of our generation waking up to the causes and the flaws which lie somewhere in the dark alleys of our society. The film is not about beer guzzling boys turning patriotic - the film is about how we all can make a difference. Like, instead of writing this article, the film inspires me to go and boot those policemen who kicked and lathi-charged some senior citizens and women a week back.

Abhishek Bachchan - I do not know. I pardon the channel for that. They should understand that it is my choice; my voice;my icon and hence my opinion.

And the final nominee has me quite intrigued. YOU! In this era of so-much-in-so-little-time, we do not have just one Bryan Adams to select - we have a 50 Cent, a Shakira, an Atif Aslam, a Rahat Fateh Ali Khan, a Himesh Reshammiyaa; we do not have just one loose fitting denim - we have cargoes, low-waists, twisted jeans, pent-pocks. And thus we all suffer from the who-is-my-icon-disorder. Who is that one person who would throw the light on the path that I wish to tread? My father? Amartya Sen? Rahul Dravid? John Abraham? Sania Mirza? Henin-Hardenne?

We do not know. We have an answer - but we do not know what it is. The answer to this query gets lost in the echelons of mystification. And it is there that I would like to congratulate the people behind this idea - Bang on folks - in our generation, there is no better icon than ourselves. We ARE our own icon. We love to see the mirror ( no paralles to be drawn to any newspapers, living or dead!) and like the mirror telling us our merits and our flaws. We look up to ourselves like we never have.

The youth in India today has definitely changed. The reasons are too many - the influx of "foreign" influence is a primary one. I deliberately do not want to delve on the reasons - it will take one more page and i refuse to do it.

But I would like to sign off by saying that I would not want my son to iconize me or John Abraham's son or some flamboyant cricketer of his generation - I would like him to be himself and iconize and idolize himself. That way, he would be HIM. And that way, he would be a true flag-bearer for the future of our nation. And then, we would not require a RDB to startle and awaken us.

You got a problem You don't know it

Don't Know how long you can suffer it

and it burns you can feel it till the bitter end

It didn't have to be this way you could have carried on

Another chance for you to test your freedom

Welcome to Excell Hr

Dear Students of Hr !!! hearty welcome to the Blog

you will be contuniously receving posts form this platform.
you can alos post your quireis, your views on this blog

happy blogging

with best wishes
vijayS.kumar
Asst.Professor
CMS GITAM