Widening Exclusion: Informalisation in the Indian Economy Ravi Srivastava

Emp. In Organised Manufacturing (ASI)

Organised Sector Employment (DGET)

% of Emoluments & Wages to GVA in Org. Man.

Share of Unorganised Sector in Employment and Value Added: All India (DGET, CSO) YearShare of Unorganised Sector in (per cent) EmploymentGross Domestic Product

NCEUS definition Unorganised Sector “The unorganized sector consists of all unincorporated private enterprises owned by individuals or households engaged in the sale and production of goods and services operated on a proprietary or partnership basis and with less than ten total workers” Unorganised Worker “Un-organized workers consist of those working in the un-organized sector or households, excluding regular workers with social security benefits provided by the employers and the workers in the formal sector without any employment and social security benefits provided by the employers”

Total workforce in agriculture and non-agriculture sector by activity status in , and (million) Activity StatusAgricultureNon-agricultureTotal Self-employed Regular wage workers Casual employee Total Self-employed Regular wage workers Casual employee Total Self-employed Regular wage workers Casual employee Total

Growth rate of workforce in agriculture and non-agriculture by activity status between 50 th, 55 th and 61 st NSSO Round Activity StatusAgricultureNon-agricultureTotal and Self-employed Regular wage workers Casual employee Total and Self-employed Regular wage workers Casual employee Total and Self-employed Regular wage workers Casual employee Total

Employment in the Organised & Unorganised Sector, & Unorganised sector Organised sectorTotal Figure (million) Percentage of sector to total

Employment Growth Rates by Economic Activity and Sector Economic ActivityUnorganised Sector Organised Sector Total Industry Services Non-agriculture Total Source: NSSO 55 th & 61 st Round Survey

Employment Growth Rate between 2000 and 2005 as per DGET Major Industry GroupPrivatePublic Organised Private & Public Argiculture, hunting etc Mining and quarrying Manufacturing Electricity, gas and water Construction Wholesale and retail trade Transport, storage & communications Finance, insurance, real estate etc Community, social & personal services Total Source: DGET

Employment Growth Rate between and as per ASI ManufacturingTotal ASI Sector Total Worker Total Persons Engaged Source: ASI summary results for factory sector &

Employment Elasticity between and Industry Group Unorganised sector Organised sectorTotal Agriculture Industry Services Non-Agr Total Source: Employment data taken from NSSO 55 th & 61 st Round and GVA estimated by NCEUS using Modified Method of apportioning

Estimated number of workers by sector and type of worker in and (million) Informal workers Formal workersTotal Unorganised sector Organised sector Total Unorganised sector Organised sector Total

Estimated number of non-agriculture workers by sector and type of worker in & (m.) worker Informal workers Formal workersTotal Unorganised Organised Total Unorganised Organised Total

Percentage distribution of non-agriculture workers by sector and type of workers to total non-agriculture workers worker Informal workers Formal workersTotal Unorganised Organised Total Unorganised Organised Total

Comparison of Organised Sector Employment (lakhs) ManufacturingAll FormalInformalTotalFormalInformalTotal ASI DGET NSS

Growth rate of workers by sector and type of worker between and (%) Sector Informal workers Formal workersTotal Unorganised sector Organised sector Total

Major Industry Group Organised Sector Informal workerFormal workerTotal Agriculture Manufacturing Electricity construction Trade Hotels Transport Finance Real estate Education Health Non-agriculture Total Employment growth rate between and by major industry group and sector Source: NSSO 55 th & 61 st Round Survey

Employment Growth Rate of Informal and Formal Workers by Economic Activity, / Economic ActivityInformal Workers Formal Workers Total Workers Industry Services Non-agriculture Total Source: NSSO 55 th & 61 st Round Survey

Growth rate of organised sector informal-formal workers by sex and industry group between & Sex IndustryServicesNon-agriculture Male Informal Formal Total Female Informal Formal Total Persons Informal Formal Total Source: NSSO 55 th & 61 st Round

Growth rate of organised sector informal-formal workers by area and industry group between & Area WorkersIndustryServices Non- agriculture Rural Informal Formal Total Urban Informal Formal Total Rural + Urban Informal Formal Total Source: NSSO 55 th & 61 st Round

Incremental employment between & (lakh) Major Industry Group Organised Sector Informal workerFormal workerTotal Agriculture Manufacturing Electricity construction Trade Hotels Transport Finance Real estate Administration Education Health Non-agriculture Total Source: NSSO 55 th & 61 st Round

Percentage distribution of incremental employment between & (lakh) Major Industry Group Organised Sector Informal worker Formal workerTotal Agriculture Manufacturing Electricity construction Trade Hotels Transport Finance Real estate Administration Education Health Non-agriculture Total

Increase & growth rate of employment in the OS, by activity type Activity Status Informal workers Formal workersTotal Increase in employment between & (million) Self-employed Regular wage employee Casual labour Total Growth Rate between & (%) Self-employed Regular wage employee Casual labour Total

Growth of Regular Wage Employee by type of work and sector between & Source: NSSO 55 th & 61 st Round Sector IndustryServices Non- agriculture Unorganised sector Informal Formal Total Organised sector Informal Formal Total Total worker Informal Formal Total

Average Daily Earning of Workers in the Age Group 15 to 59 Years ( Prices) AgricultureNon-Agriculture CategoryStatus Rural Male Regular Casual Rural Female Regular Casual Urban Male Regular Casual Urban Female Regular Casual

Growth rate of Average Daily Earning of Workers in the Age Group 15 to 59 Years ( Prices) CategoryStatusAgricultureNon-Agriculture Rural Male Regular Salaried Casual workers Rural Female Regular Salaried Casual workers Urban Male Regular Salaried Casual workers Urban Female Regular Salaried Casual workers

Wages of Regular Workers (US. IW/OS, FW/OS),

Conclusion Only one time period results available at present from the NSSO. Issues with the base year (99-00). Variance with alternative estimates. Both size and growth of employment in Organised Sector is larger. While under coverage may be one issue, more significant issue related to informal workforce. Growth in informal workforce, including sizeable numbers of regular workers – low paid & without protection – but a pointer to changing functional and skill requirements. Institutional and labour rigidities have not deterred the OS from increasing employment of flexible labour. Along with the Unorganised Sector issues, quality of employment and lack of employment and social protection emerging as a significant issue.