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A STUDY ON THE PROSPECTS AND PROBLEMS OF UNORGANISED LABOURS IN

INDIA

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 Reinventing Opportunities In Management, IT and Social Sciences
MANEGMA-2017
ISBN No: 978-93-5265-653-0

Paper 36

A STUDY ON THE PROSPECTS AND PROBLEMS OF

UNORGANISED LABOURS IN INDIA
Pradeep M. D.*, Ravindra B. K.**, Ramjani Sab T. ***
* Srinivas Institute of Management Studies, Mangalore, Karnataka, India
Research Scholar, Alliance University, Bengaluru, Karnataka & Assistant Professor,
**Vice Chancellor & Research Guide, Alliance University, Bengaluru, Karnataka, India
***II Year, Social Work Department, Srinivas Institute of Management Studies, Mangaluru,
Karnataka, India.

ABSTRACT
India comprises 43.7 crore people working with the skill in the residual sector as
unorganized labours. Around 24.6 core engage in agriculture, 4.4 crore in construction and
remaining people in the manufacturing and service sectors. This sector faces eventual
deficiencies in regulations over employment, remuneration pattern, poor employer and
employee relationship and casual work culture. Informal sector covers large number of
workers from rural and substantial number from the urban areas by potentially engaging
family labour and technology. The unorganized labours engage in casual, seasonal and
scattered employments, which are not unionized. A large number of statutes addressing
issues concerning unorganized sector are neither feasible nor practicable. Unorganised
workers are also kept away from the Social Security Benefits such as Old Age Pensions,
Gratuity, Employees State Insurance, Workmen’s Compensation etc. in India. Unorganized
sector plays pivotal role in the development of Indian economy. For the effective
implementation of labour legislations for the informal sectors, it is essential to study the
existing employment relations, after analyzing the existing working conditions of unorganised
labours in India should be given special attention. This paper examine about factors
influencing employment in this unorganized sector, types of employments, regulatory
protections, contribution to Indian economy and challenges faced by the unorganised
workers. It tries to suggest measures to overcome the obstacles in the unorganised sector by
ensuring physical, economic and intellectual wellbeing of the unorganized labours.

Key Words: Workers, unorganized sector, deficiencies, economy, wellbeing.

I. Introduction
According to Unorganised Workers Social Security Act, 2008 ‘Unorganised Sector’ means
an enterprise owned by individuals or self employed workers, engaging in production or sale
of goods or service employing less than ten employees. Kanak Kanthi Bagchi and Nirupam

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Gobi (2012) British economist Keith Hart introduced the term ‘informal sector’ in 1971. The
unorganised sector, comprises, informal workforce with low working status and poor laws
and regulations enforced by the government. Tiwari R.S. (2002) in 1970s, International
Labour Organisation introduced World Employment Programme Mission in Kenya,
Columbia, Srilanka and Philippines to encourage employment in informal sectors to bring
economic growth. This initiation has brought attention of the world towards unorganized
sector. Second National Commission on Labour (2002) informal sector comprises large
number of rural workforce and substantial urban workforce, potentially using family labour
and technology. The unorganized are engaged in casual, seasonal and scattered employments
which prevents them to be unionized. The sector even marked with low incomes, unstable
employments and lack of protection from legislation and trade union. Section 2 (m) of the
unorganised Workers’ Social Security Act, 2008 defines Unorganised worker as either home-
based, self employed, work for wage in the unorganised sector or working in the organised
sector which is not covered under any acts specified in the schedule II of the Act. National
Commission for Enterprises in the Unorganised Sector (2007) only 0.4 per cent unorganized
workers were availed with the facility of Provident fund during 1999 to 2000. Kishore C
Samal (2013) in a study of urban Ghana, rural migrants, entering the urban labour market
were lacking in the skills and experience to work in the urban formal sectors, hence, they
were forced to work in informal sectors. The National Commission on Labour listed the
categories of unorganized labours including Contract labours working in the construction
sector, Casual labour, Labour employed in small scale industry, Handloom/power-loom
workers, Beedi and cigar workers, Employees in shops and commercial establishments,
Sweepers and scavengers, Workers in tanneries, Tribal labour and Other unprotected
labours.
(a) Unorgnised Sector in India: Report on conditions of work and promotion of livelihoods
in the unorganised sector (2008) the unorganized sector is very vast and varied sector to
confine within a conceptual definition. The National Commission for Enterprises defined the
unorganized sector as “The unincorporated enterprises owned under proprietary or
partnerships by the individuals or households to carry sale or production of goods and
services employing less than ten workers. Rapaka Satya Raju (1989) this sector allow easy
entry, micro operations, local ownership, labour intensive, usage of lower technologies,
uncertain legal status, flexible pricing pattern and employment of high migrant workers. It
lacks from sophisticated packing systems, brand name, storage facility, distribution networks,
financial aid and compensation mechanisms. Normally, it is very difficult to get the data of
employment and income generation from the informal economy in the developing countries,
but India estimated the informal sector by National Sample Survey Organisation (NSSO).
According to the NSSO report (2009-2010) out of 46.5 crore employed persons, 2.8 crore are
from organised sector and rest 43.7 crore from unorganised sector. Among the total
unorganized workers, 24.6 crore workers are employed in agricultural sector, 4.4 crore in
construction, and rest are in manufacturing, trade, transport, communication and services

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activities. A large number of unorganised workers are home based workers engaging beedi
rolling, agarbatti making, pappad making, tailoring, and embroidery work. Working
conditions of unorganised labours can be achieved with better infrastructure, basic services,
self help initiatives by linking workers and institutions providing services. Kishore C Samal
(2013) the unorganized labour work for low wage, with more women workers, engaging
family labour, home based works, instances of child labour, migrant workers, piece rate
payment, contractual employment, recruitment through contractors, seasonal employments,
under employment, casual works, self-employments, cooperatives for employees, not
organized into trade unions, no much recourse to collective bargaining, hazardous job and
debt bondage.

(b) Economic contribution to the country: Mariappan K. (2011) in the era of Globalization
and technology, the inability of the employer to expand employment in the formal sectors has
increased reliance over unorganized sectors. According to National Statistical Commission
(2012) informal sectors in the developing countries will contributes two third share of
employment of the country. Indian economy rapidly grown in the last two decades with non-
formal and dynamic employments boosting output and earnings. The higher economic growth
can be achieved through inclusive growth the informal economy. According to 15th
International Conference of Labour Statisticians (1993) The informal sector are producing
goods or services primarily for generating employment and incomes to the poor”. More than
90 per cent of the total workforce in the country and 50 per cent of the total Net National
Product are contributed by the socially and economically underprivileged sections of the
society working in informal sectors. Ruddar Datt (2008) ANCEUS Report (2005) among 458
million employed persons in India, 395 million i.e. 86 per cent belong to unorganised sector.
Rehman Sobhan (2010) informal sector contributes 50.6 per cent of Gross Domestic Product
in the Country.

II. Problems of Unorganized Sector

Kishore C Samal (2013) unorganised workers organize themselves to achieve a common
object. The casual employment, ignorance, illiteracy, small establishments, low investments,
scattered employment and superiority of the employer forbidden from being exclusive sector.
It depends on organized sectors for its raw materials, capital, employment and marketing. The
formal sector uses the model of sub contracting for engaging labour in the unorganized
sector. Kulwant Rai Gupta (2009) problems of unorganized labours are multifarious in
nature, hence confining this sector within a comprehensive framework is difficult. Changes in
the trade and technology, global linkages are the threat to this sector. Employees has low job
security, poor career growth, less leave and paid holidays, less protection against unfair trade
practices. This sector is distinguished from formal sectors on the basis of deficiencies like
seasonal employment, lack of employer-employee relationship and inadequate social security

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protection. Even though this sector contributes to the economy, an attempt is made to
understand the vulnerability of this sector as under.

(i) Insecurity in Job: Suresh Srivastava (1995) informal workers depends on multiple
employments due to insecurity of work. Agricultural workers are engaged for only three
months in a year and for the rest, they search an alternative job to sustain from starvation.
National Commission for women reporting impact of WTO on Women in Agriculture (2005)
they are engaged only few day’s work in a year. National Commission for Enterprises in the
unorganised Sector (2006) Mahatma Gandhi National Rural Workers Employment Guarantee
Act, 2005 aims to provide employment guarantee for 100 days of work in the most backward
districts of the country for manual labour. The factors like variations in the climate and
location also affects the workers job security.

(ii) Occupational hazards: Unorganised workers are exposed to hazardous working

conditions which adversely affect their health. Health problem increase due to low nutrition
and heavy physical labour. Low income and inability to pay for the health care leads the poor
worker to be indebted. Studies reported that home based beedi workers are effected with
respiratory and body ache due to inhalation of the tobacco dust and peculiar posture at work
respectively. In fish processing units women are working in highly contaminated
environment. In tobacco processing units, who involve in plucking, winnowing, grading and
packing etc, the mist containing tiny particles of tobacco spread in the workplace enters the
respiratory track and cause dangerous diseases like asthma, Tuberculosis etc. Salt Pan
Workers suffer from severe eye problems due to the reflection of light from the heap of salt
and skin diseases. Extensive usage of fertilizers, insecticides and pesticides also affect the
health in the agriculture sector. Arjun Patel and Desai Kiran (1995) persons engage in
applying, mixing and loading pesticides are exposed to toxic chemicals. Collecting statistics
about accidents and injuries in farming need to be developed. The workers working in the
fireworks, match works, leather tanning and construction are prone to accidents leading to
amputations, due to unguarded operations or unsafe machines.

(iii) Inability to Secure Minimum Wages: In Peoples’ Union for Democratic Rights v.
Union of India (AIR 1982 SC 1473) The Supreme Court held that employing workers for
wage below the statutory minimum level will result in forced labour, which is prohibited
under Article 23 of the constitution of India even though poverty forces anyone to work for
low wage. Studies on conditions of employment in the unorganized sector reported that daily
wages are paid much below than the minimum fixed by the government. The casual workers
are least protected due to low earnings. Wage is not influenced by the market forces. Report
on the Working of The Minimum Wages Act, by Government of India (2013) lack of
uniformity in wage structure is found across the states and union territories due to the
application of the Minimum Wages Act only to the scheduled employments, in cases where

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the State Government fails to include particular employment within the scheduled list, are not
covered under this legislation.

(iv) Lengthy working Hours: Arjun Patel and Desai Kiran (1995) long working hours
beyond the regulatory norms will affect the social and family life, especially of women
employees restraining them from participating in any cultural or social affairs of the family.
Absence of laws to govern the working conditions of agricultural labour resulted for lengthy
working hours. In Fireworks, Match works and hand loom work starts at early morning 6.00
a.m. and spreads for 12-15 hours per day. Kamala Kantha Mohabatra (2012) in many cases
the statutory limit of working hours fixed for 48 hours per week, if violated instantly affects
the working conditions of unorganised workers.

(v) Poverty and Indebtedness: Kannan K.P (2012) workers are poor due to the low income
and uncertain employments, facing problems to manage social and cultural life with poor
economic status. Increased indebtedness in the agricultural sectors resulted in the increase of
suicide of farmers.

(vi) Lack of Social Security Measures: Workers are economically inactive due to
biological, personal, social and natural risks which are beyond human control. Biological
risks covers modernity, sickness and old age, personal risks of widowhood and accident,
social risks of unemployment, flood, fire, drought and closure need to be treated through
social security mechanisms. The Social Insurance, should work as crisis intervention and help
to resume back the lost employment due to uncertainity.

(vii) Lack of Health Security: 48 per cent of informal workers spend their Annual
Household income for the Medical Care. The lack of Subsidy or Government support in
health care has added vulnerability in their life. The inability to offer medical treatment have
resulted poor health status. They are even driven towards poverty and indebtedness.

(viii) Poor Working Environment: Deficiencies in sanitation due to lack of washing

facility, proper urinal and toilet facilities will affect the health of workers. Even the physical
conditions like space, lighting, ventilation available are very poor compare to organized
sectors.

(ix) Insecurity during Old Age: Leading life during the old age has become a challenge
among unorganized workers. Construction workers and contract labours are not covered
under the Provident Fund scheme. The nature of employment in Agriculture and Construction
created a fear of displacement from work on age factor due to inability to work after certain
age. The insecurity is due to lack of support from the family members, inadequate public
health care facilities and expensive private health care for the aged.

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(x) Hazards connected to Accidents: Accident cause damage to the health, loss in the
earning capacity, requires additional expenditure for hospitalization and medical treatment. It
cause partial or permanent disability from earning. Death of the bread winner will put the
whole family to trouble, making them to be indebted by spending whole savings and assets.
(xi) Problems of Migrant Workers: Arjun Patel and Desai Kiran (1995) most migrant
workers are poor, without adequate basic amenities, works under adverse environment. For
example, the Sugarcane labourers, who lives in the open field, facing steady problems in the
monsoon seasons from the menace of snakes, scorpions, mosquitoes etc. The workers
harvesting the sugarcane crops do not have electricity, water supply and sanitation facility.
(xii) Low Bargaining Power: Gender and Economic Policy Discussion Forum (2012) the
migrants workers have no right to bargain and works for less wage. Illiteracy, lack of
awareness, lack of regulations and social isolation are the hurdles from unionizing. Inspite of
employment opportunities it generates and contributions to the Gross Domestic Product of
the country, it lacks in the legal status affecting workers right prospects drastically. They
cannot voice their demands or object the adverse attitude of the employers to protect their self
interest.
(xiii) Poor Employer-Employee Relationship: Rani Advani and Debi. S Saini (1995)
scattered work culture without designated workplace, is preventing to build master-servant
relationships to execute labour laws. The preference over multiple employers due to non
availability of work and employment of home based workers through contractors has
deprived the unorganised workers from getting minimum wages and social security.
(xiv) Impact of Natural Disasters: Sudharshan, Canagarajha and S.V. Sethuraman (2001)
natural disasters like flood, drought, famine, earth quake etc., will disturb the productivity
affecting individual household income and asset of the unorganised workers.
(xv) Vulnerable Labour Segments: Migrant labours, bonded labours and child labours are
the major vulnerable groups who are exploited and deprived in all spheres of life. Study
group for construction of National Commission on Labour (2005) reported that quarries,
brick-kilns and construction sites engage bondage extending over generations through child
labour. Vidyut Joshi (1995) creditor grant loan to labours, on agreement of forcing them to be
under bondage till repayment of the sum forming debtor-creditor relationship. If the debtor
could not repay the loan with specified interest, he shall serve the creditor for life. In
bondage, exploitation exists due to the arbitrary terms and conditions vested upon the
perpetuating debt and illegal detention. Ramadhar Giri (2007) Increasing demand for the
workers in agriculture, the instances of bondage of the children of indebted labourers, who
are forced to work in return for the debt. Bondage is common in carpet weaving, cloth
printing, explosives, fireworks, cigarette making, printing and soldering jobs.

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III. Legislative and Policy framework

(i) Constitution of India: ‘Labour’ is a subject belong to ‘Concurrent list’ of Indian
Constitution, with both Central and State Governments competent to enact legislations on the
subject. The constitution grants some Fundamental Rights connecting to labour under Part
III, by granting Right to Equality (Article 14-18). In Devarajiah vs. Padmanna (AIR 1961
Mad 35, 39) High Court held that Article 17 bans the practice of untouchability declaring it
an offence punishable under law. Consequently, Parliament passed Untouchability
(Offences) Act, 1955 declaring punishment for the offence. In 1976, the act was amended and
renamed as Protection of Civil Rights Act, 1955 with enhanced punishments. Protection of
life and personal liberty (Article 21), Right against exploitation (Article 23) prohibiting
Traffic in human beings, beggar and other forms of forced labour compelling anyone for
involuntary and free service without wage or any forced labour which are punishable under
law. In Raj Bahadur vs. Legal Remembrancer (AIR 1953 Cal, 522) it was held that Traffic in
human beings is ‘to deal in men and women like goods’ either by selling or disposing or
slavery which are punishable under Section 370 of Indian Penal Code, 1860. Right to
Constitutional Remedies (Article 32) and Directive Principles of State Policy (Article 38- 51)
in the Part IV, with a set of guiding principles for the governance of the country. Article 46
directs the State to promote educational and economic interest of the weaker sections to
protect from social injustice and all forms of exploitation. Article 47 guides the State to raise
the level of nutrition and the standard of living the people. Article 51(A) (e) ensures
promotion of harmony and the spirit of common brotherhood among all the people of India
and to renounce practices derogatory to the dignity of women.

(ii) The Child Labour (Prohibition and Regulation) Act, 1986: No child below the age
of 14 years shall be employed or permitted to work in any specified employments
under the act. Whoever employs in contravention to section 3 of the act shall be punishable
with imprisonment for not be less than six months, extendable to two years, or with fine of
not less than Rs. 20,000, extendable to Rs. 50,000 or with both. Many children are working in
agriculture, handlooms, power looms, food industry, Beedi Industry, Small rubber and plastic
factories, Jari (Golden Embroidery), domestic services, garages etc. Some are engaged as
shoe shine boys, vendors, car cleaners, carriers in the trade of illicit liquor and other narcotic
drugs. Children working in the Textile industry, engage in weaving. Work place being a
small room, serves as home and workshop with less pay and could not attend school. Hotel
employs children for housekeeping job just by paying Rs. 30 or Rs. 40 per day. Beedi
industry engages children to close the ends of the beedies or tie thread round them.

(iii) International Initiatives: India is the signatory to the Treaty of Versailles and member
of League of Nation and a permanent member of International Labour Organisation (ILO). It
participates in the deliberations of ILO in the issues of policy making. Any member states
within one year or within 18 months of closing of the session of the conference can put forth
proposals for enacting legislations before the Director General for ratification. ILO is

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associated with the evolution of vocational training, Employees State Insurance Corporation,
Central Labour Institute, National Labour Institute and Central Board for Workers Education,
National Safety Council and National Productivity Council. The National Trade Unions like
Indian National Trade Union Congress and Hindu Masdoor Sabha are assisted by the ILO in
aiding family welfare, education and occupational safety. Protection against employment
injury is enshrined in the preamble to ILO’s constitution. 14 conventions and 13
recommendations have been adopted by ILO on health and safety covering accidents, safety,
maximum weight, hygiene, safeguards against poisonous materials, welfare and housing.
Working Environment Convention 1977 prevents, control and protect working environment
from air pollution, noise and vibration. Murugan A.R (1997) ILO’s code on Safety
Regulations for Industrial establishments ensures safe working environment and health of the
workers. Its conventions, recommendations and resolutions provide guidelines for the
evolution of legislative and administrative measures to protect the interest of the labour. Press
Information Bureau, Ministry of Labour & Employment, Government of India (16th July
2014) India ratified around 43 conventions, among which Four are fundamental human rights
conventions viz., Forced Labour Convention (C-29), Equal Remuneration Convention (C-
100), Abolition of Forced Labour Convention (C-105) and Discrimination (Employment &
Occupation) Convention (C-111). The Ministry conducts regular meeting of the Committees
on Convention (CoC), a tripartite working body to explore the possibility of ratification. India
supported for the adoption of Social Protection Floors Recommendation (R-202) in 101st
Session of the International Labour Conference held in Geneva in June, 2012 to protect the
rights and welfare of all workers including unorganised sector.
(iv) Special Initiative: Indira Gandhi National Old Age Pension Scheme and National
Family Benefit Scheme are initiated by the Ministry of Rural Development. Janani Suraksha
Yojana initiated by the Ministry of Health and Family Welfare, Handloom Weavers’
Comprehensive Welfare Scheme, Handicraft Artisans’ Comprehensive Welfare Scheme and
Pension to Master Craft Persons by the Ministry of Textiles, National Scheme for Welfare of
Fishermen, Training and Extension by the Department of Animal Husbandry, Dairying &
Fisheries, Janashree Bima Yojana and Aam Admi Bima Yojana by the Department of
Financial Services. Rashtriya Swasthya Bima Yojana (RSBY) launched from 1st October,
2007 by the Ministry of Labour and Employment to provide Social Security measure since 1 st
April, 2008, by smart card based cashless health insurance for Rs. 30,000/- per annum to the
BPL families specified by the Planning Commission in 75:25 ratio by the Centre and State
Governments. For the States of north east region, Jammu & Kashmir in the ratio of 90:10.
The scheme is active in 26 states and union territories benefitting 3,85,15,411 families
including construction workers, licensed Railway Porters, Street Vendors, registered
members of MGNREGA who worked more than fifteen days in the preceding financial year,
Beedi Workers, Domestic Workers, Sanitation Workers, Mine Workers, Rickshaw Pullers,
Rag Pickers and Auto/Taxi drivers.

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(v) National Policy on Skill Development: It is sponsored by the National Skill

Development Corporation, a Non-profit company framed under the companies Act 1956. The
Programme aims to achieve inclusive growth, usage of technology, higher productivity to
raise the standard of the people. It creates opportunities for youth and women to acquire skills
for their life. It encourage stakeholders to initiate skill development programmes, flexible
delivery mechanisms, maintaining skilled workforce, entrepreneurship meeting market needs,
coordinate the efforts of Central and State level agencies and empower public and private
service providers. The policy includes institution based skill development using ITIs and
ITCs, formal and informal apprenticeships, E-learning, distance learning, sector level
learning adult learning, training to the retired or retiring employees, lifelong learning and
Non formal training from the Civil Society Organizations.

(vi) National AIDS Policy 1997: The Government of India adopted this policy to prevent the
spread of HIV infection through the collective efforts of Government and Non Government
organizations. It aims to mobilize support of Non Governmental Organisations (NGOs) and
Community Based Organisations (CBOs) to encourage community interventions to prevent
the disease. It protects women, children and socially backward sections from vulnerability
through Public Health Rationale to overcome the stigma and discrimination against the
victims. It creates general awareness about the transmission and adoption of safe behavioural
practices. It ensures health care in hospitals, homes care, research, vaccine in the country.
Sudhir Varma, (2010) HIV/AIDS is a workplace issue affecting both workers and
organisation in the public and private employments.

(vii) The Support for Training and Employment Programme (STEP) 1986-87: The
National Commission for Self-employed women in the Informal Sector (1988) suggested
protective measures by employment for income generation, minimum wages, welfare and
support services, training and upgrading skills. It covers traditional sectors like Agriculture,
small animal husbandry, dairying, fisheries, handlooms, handicrafts, khadi and village
industries, sericulture, social forestry and waste land development. It is launched in 19 states,
nearly 60% works in the dairy sector with 8,000 Women’s Dairy Co-operatives benefitting
more than 4 lakh members with the help of State Cooperative Milk Federations. Under the XI
plan 1,60,560 beneficiaries were covered under the STEP scheme. This linked vocational
courses under National Skill Development Programme to increase the employability of
trained SHG members who are poor, asset less, marginalized women belonging to SC/ST
households, women headed households and BPL families.
(viii) Design Development and Skill Up-gradation: Handicraft items produced by the crafts
person should meet the latest designs, aesthetics and competitive cost after considering the
changing perceptions, likes and tasks of the customers through new designs and skill
upgradation. National Minorities Development Finance Corporation (NMDFC) receive

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proposals from State channelizing agencies and NGOs through grants for Design Skill
Development Training Programmes for the Minority Communities.
(ix) Schemes After 2000: The eleventh Five Year Plan initiated SABLA, for empowering
adolescent girls, Indira Gandhi Matritva Sahyog Yojana (IGMSY) for Maternity Benefits,
Mahila Kisan Sashaktikaran Pariyojana for women farmers, a scheme for leadership training
for Minority women. National Mission for Empowerment of Women (NMEW) 2010 to
facilitate Government Programmes. Around 16 States/UTs have established State Mission
Authorities for Empowering Women and 11 States are setting up State Resource Centres for
Women. Inclusion and mainstreaming of marginalized was specially emphasized under
MGNREGA, Right to Free & Compulsory Education, National Rural Health Mission,
National Rural Livelihood Mission and National Skill Development Mission. Gender
Budgeting is initiated by the Department of Telecommunication under the Ministry of
Petroleum and Natural Gas. Gender Responsive Budgeting is done by 56 Ministries through
the Gender Budgeting Cells by scanning existing policies with public resources within a
gender lens to reduce gender disparity. With revision of the guidelines of the scheme in 2009,
Programme Implementation Manual was issued. Training for upgrading skills and credit
facility is done by linking Rashtriya Mahila Kosh (RMK), National Bank for Agriculture and
Rural Development (NABARD), and Council for Advancement of People’s Action and Rural
Technology (CAPART) in agriculture, animal husbandry, dairying, fisheries, handlooms,
handicrafts, Khadi and Village Industries, sericulture, waste land development and social
forestry sectors.
(x) Micro Units Development and Refinance Agency Bank (MUDRA Bank): For
developing micro units, refinancing Micro Finance Institutions (MFIs) for entrepreneurship
and funding Non Corporate Small Business Sectors (NCSBS), Government of India
constituted MUDRA Bank in India. MUDRA Yojana is in the 2016 Union Budget. It aims to
refinance micro units with loan requirement of Rs. 50,000/- to Rs. 10,000,00/- lakhs and
support MFIs for lending. The bank will refinance micro business under Pradhan Mantri
MUDRA Yojana. The Bank has launched its three initiative products like SHISHU, KISHOR
& TARUN to meet the funding needs of the micro units or entrepreneur. MUDRA will
deliver the loan through NBFCs, MFIs, Rural Banks, District Banks, Nationalized Banks,
Private Banks, Primary Lending Institutions and other intermediaries. MUDRA loan charges
a base rate of interest between +1% to 7%. Any Indian citizen for engaging in manufacturing,
processing, trading or service need credit of less than Rs. 10 lakh can approach Banks, MFIs,
Financial Institutions or NBFC for availing MUDRA loans. MUDRA Bank is not refinancing
agriculture sector under this scheme but traders of vegetables & fruits are covered. Central
Government allotted an additional fund of One Lakh crore to this scheme and Rs. 40,000/-
Crore for Mudra Bank Shishu Loan Scheme, Rs. 35,000/- Crore for Mudra Bank Kishor Loan
Scheme and remaining Rs. 25,000/- Crore for Mudra Bank Tarun Loan Scheme.
(xi) The Unorganized Workers Social Security Act, 2008: It aims to provide social
security and welfare for the unorganized workers. Central Government is empowered to

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make welfare schemes connected to life, disability, health, maternity and old age and the
State Government for provident fund, employment injury, housing, education, skill up
gradation, funeral and old age homes. These schemes are wholely funded by the Central or
State Governments or party from the beneficiary and employers. The Central Government
constituted National Social Security Board and State Government constituted Social Security
Board to recommend, monitor and review the expenditure of various schemes. Every
unorganized workers, above 14 years, will register within the act shall be issued with an
identity card and are eligible for social security benefits under the scheme. It covers schemes
like National Family Benefit Scheme, Janani Suraksha Yojna, Indira Gandhi National Old
Age Pension Scheme and Aam Admi Bima Yojna etc.
IV. Conclusion
Sudharshan, Canagarajha and S.V. Sethuraman (2001) India do not have a specific scheme to
register whole workers of unorganised sector. The wage payment by the owner, sub
contractor, agent and middlemen are violating wage regulations causing miseries to the
marginalized workers. Employment on sub-contract, have evaded welfare standards specified
by the law. Non compliance of labour regulation relating to minimum wage, social security
and welfare have increased miseries of informal sector. Lack of skills and training, home
based work, micro enterprises, has created unregulated work environment. Non availability of
jobs in the capital intensive organized sectors due technological advancement encourage
employments in the labour intensive unorganized sectors. Many are attracted to the
unorganised sector due to the easy employment and income. Government should regulate
informal economic activities with safety and health. The causes for injuries, fatalities,
diseases, disasters in this sector should be controlled. The enterprises should focus to
contribute to the national assets by creating community awareness on sensitive issues
connected to workers. Attention should be provided to encourage green jobs, sustainable
development, community participation, health and safety consciousness and enriching the
skills of unorganised workers in India.
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