Turning Around The Prospects Of Informal Indian Employment

Indian employment is complex. There is a wide array of arrangements across the formal contracts of full-time employment going all the way down to hourly or project-based assignments.  Spoken word is good for work arrangements to run for years onward – with the very informal nature of the said fixture often creating uncertainty and operational hiccups for both parties involved. And these forms of employment in India are unsurprisingly common. Understanding and streamlining informal Indian employment models has the potential to smooth out uncertainty and create financial and societal harmony.

Indian employment in the informal sector is a morass of spoken agreements, undefined drivers, and inconsistent list prerogatives and figures of merit. Yet, it is sustained by the volumes and continues to prevail, often rivaling the numbers seen in the formal job market. It is not just the areas of domestic work, repair and maintenance, or day-to-day aspects of life and survival that are supported by the informal sector. Indian employment in the informal sector reaches legendary proportions in areas such as manpower supply, logistics, moneylending, and construction – all of which are major revenue streams in their own sectors in the formal sectors of the Indian economy as well.

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Why Indian employment stays largely informal

Collective growth of Indian employment can be understood and made possible only if informal sections of employment are accounted for and streamlined. But it’s also germane to not expect to change the nature of Indian employment in one decade. Informal employment in India is one of the prime characteristics of Indian employment. A report on employment in Informal Sector and Conditions of Informal Employment as laid out in volume-IV (2013-14) by the Ministry of Labor and Employment – Labor Bureau Chandigarh pegged nearly 80-93% of the labor workforce and about 50% of the national product as powered entirely by the unorganized sector.

In the last 10 years, the informal sector is said to have retained 80% of the labor force. However, infrequent updates collected on the informal sector keeps this significant part of the working populace out of the news. Of the general category, the proportion of female workers is greater than male workers by 4%. To understand this crucial chunk of the Indian employment scenario, the National Commission for Enterprises in the Unorganized Sector (NCEUS) further went on to define informal employment in the formal sector, formal employment in the informal sector, and informal employment in the informal sector in addition to the formal employment in the organized sector.

These sections of the economy are characterized by:

  • Greater vulnerability to shifts caused by the pandemic
  • Vulnerability can range from little job security to completely absent boundaries for job roles
  • Low job and social security
  • Little or no technical education
  • A movement from agricultural work to non-agricultural employment such as manufacturing and construction
  • Little to no expectation of growth or betterment of prospects over time

For these reasons which often lead to exploitative working conditions, jobs in the informal sector need to have better goals and policies driving them. To some extent, the realization that better regulation is required in this section is already in place. Bodies such as NitiAayog concern themselves with bringing consistency and awareness to the existing unorganized workforce. Governmental endeavors span Workers’ Welfare Boards and Social Security Codes which cover temporary workers and those in the unorganized sector as well, making them eligible for Employees’ State Insurance.

Several skill development programs and pension schemes seek to provide social security and protection during old age for various categories of unorganized workers including those who run their own shops or one-person businesses. The execution of these schemes takes a turn for the better when fresh iterations of support come from the governing bodies in the form of the minimum wages rules, code on social security, and code on working conditions as part of the Code on Wages act and the rest of the four labor codes.


  • Condition of informality in Indian Employment Market|AQUIB JAVED|LinkedIn.com| Feb 02,2021
  • Informal economy in South Asia|ILO in India
  • Informal Sector and Conditions of Informal Employment|volume-IV| Ministry of Labor and Employment – Labor Bureau Chandigarh|2013-14

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