Informal sector in India: Perspectives and policies

441 Pages·2001·100.638 MB·English

by  Amitabh Kundu, Alakh N. Sharma

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UNIVERSITY OF MICHIGAN
INFORMAL SECTOR
IN INDIA
Perspectives and Policies
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UNIVERSITY OF MICHIGAN
INSTITUTE FOR HUMAN DEVELOPMENT
The Institute for Human Development (IHD) is a non
profit autonomous institution for study and action in the
areas of labour, employment, poverty, education, health
and other aspects of human development in developing
countries, particularly India. The specific a.reas in which
the lnstitute's current activities are concentrated include:
impact of structural adjustment policies on poverty,
employment and social development, and desired policy
interventions; empowerment of rural labour; efficacy of
poverty alleviation programmes and devising an
appropriate anti-poverty policy; status and efficacy of
primary education in rural areas and its access to the poor;
and institutional framework and the poor. Its special focus
is on gender disparity, backward regions and vulnerable
groups.
INSTITUTE OF APPLIED MANPOWER RESEARCH
The Institute of Applied Manpower Research (IAMR) was
set up in 1962, inter alia, to conduct empirical research in
manpower, provide advisory and consultancy services to
government departments and industry; and stimulate
•
manpower research through seminars, conferences and
training courses. Currently, the lnstitute's activities pertain
to the following five themes, viz., employment and
unemployment; science, technology and industry;
manpower information system towards effectively
reflecting user's perception and needs; and provide
continuity to research activities of the Institute.
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INFORMAL SECTOR
IN INDIA
Perspectives and Policies
Edited by
Amitabh Kundu
Alakh N. Sharma
INSTITUTE FOR HUMAN DEVELOPMENT
&
INSTITUTE OF APPLIED MANPOWER RESEARCH
NEWDELHI
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UNIVERSITY OF MICHIGAN
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Published by
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~ INS'I'I'I'U'I'E FOR HUMAN DEVELOPMENT
g IAMR Building, 3rd Floor, I.P. Estate,
tX. 1> O } Mahatma Gandhi Marg, New Delhi-110 002
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Copyright© Institute for Human Development, 2001
First Published, 2001
ISBN 81-900948-5-8
A part of the publication cost of this book has been met by the Friedrich
Ebert Stiftung.
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Contents
Preface
7
1. Introduction
Amitabh Kundu and Alalch N. Sharma 9
Part I : CONCEFl'UAL AND ME"I"HODOLOGICAL ISSUES
2. Information Base for the Informal Sector
S.S. Suryanarayanan
31
3. Informal Sector in India: Its Coverage and Contributions
A.C. Kulshreshtha and Guiab Singh 48
Part U : TRENDS AND PA"1=1·ERNS AT MACRO LEVEL
4. Employment in the Informal Sector
ArupMitra 85
5. Growth Dynamics of Informal Manufacturing Sector
in Urban India: An Analysis of Interdependencies
Amitabh Kundu, N. uilitha and Sant uil Arora 93
6. Wages and Employment in Unorganised Sector:
Issues in Wage Policy
Jeemol Unni 124
7. lnformalisation of Employment and Poverty in Ahmedabad
Darshini Mahadevia 142
8. Scalar Linkages in Industries: Implications for
Productivity and Employment
AmitaShah 160
Part Ill : STRUCTURE AND DYNAMICS AT MICRO LEVEL
9. Workers and Earnings in Informal Manufacturin~
Evidence and Issues in Estimation
Keshab Das 179
10. Manufacturing Activities in Urban Slums: A Case Study of
Sandal Making in Hyderabad
G. Swaroopa Rani and 5. Galab 196
11. Political Economy of Labour: A Case Study of Surgical
Instruments Manufacturing Industry at Jalandhar, Punjab
Manjit Singh 215
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6 INiatMAL Sa::rok INDIA
IN
12. Powerlooms in Silk Weaving: Case Studies from Kamataka
Supriya Roy Choudhary
229
13. Small Information Technology Services, Employment and
Entrepreneu.rship Development: Some Explorations
into Indian Experience
Nagesh Kumar
241
14. Informal Tourism Sector: Insights from 'Iwo Cities
Surjit Singh
256
15. Linkage between Informal and Formal Sectors:
Some Findings from Micro-level Studies
Harjit 5. Anand
276
Part IV: WOMEN IN INFORMAL SECTOR
16. Urban Indian Women in Informal Employment:
Macro Trends in the Nineties
/ayati Ghosh 301
17. Globalisation, Liberalisation and Women
Workers in the Informal Sector
U. Kalpagam 310
18. Impact of Emerging Labour Market on Women and
Their H(\11se1\olds: A Tale of Three Slums in Mumbai
Sudha Deshpande 331
19. Unorganised Women in an Urban Setting:
Opportunities and Challenges
Martin Patrick
349
Part V: SUPPORT SYSTEM
20. Technology and Training for Informal Sector:
Need for New Initiatives
Rajendra P. Mamgain and J.C. Awasthi 363
21. Meeting the Credit Needs of the Micro Enterprise Sector:
Issues in Focus
Tara Nair
382
22. Moving Towards People-centred Economy
Ela R. Bhatt 393
Part VI : SOCIAL PROTECTION AND ORGANISATION
23. Social Security for Workers in Unorganised Sector
T.S. Sankaran
405
24. Organising Informal Sector Workers
Navin Chandra and Surendra Pratap 413
Contributors
429
List of Abbreviations 431
Index 435
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I
Preface
The ongoing globalisation of the Indian economy in the nineties is widely
believed to have corrected certain macro-econqmic distortions. It has
nevertheless resulted in serious problems in the social field including slow
growth of employment. The emergence of the informal sector has often been
viewed as providing a solution to a few of these problems by ensuring
sustainability of livelihood for a large section of the population, particularly
the poor. Indeed, a significant part of the incremental employment generated
in the nineties is in the informal sector, both within manufacturing and tertiary
sectors. And yet, it remains one of the.less researched areas in the context of
formulating a viable development policy.
It was in this context that the Institute for Human Development (lliO) and
Institute of Applied Manpower Research (IAMR) organised a three-day
~
seminar during December 1997 in Delhi to highlight these issues and identify
,,seful inputs for policy formulation. Financial support for the seminar was
provided by the Department of Statistics of the Government of India,
International Labour Organisation and Friedrich Ebert Stiftung. The seminar
evoked an overwhelming response attracting many distinguished experts in
the relevant field, which included as many as 70 researchers, policy makers,
social activists and others who participated and intensively deliberated on the
theme. Professor Yoginder K. Alagh, the then Union Minister for Planning and
Programme Implementation, inaugurated the seminar and Professor Madhu
Dandwate, the then Deputy Chairman of the Planning Commission, delivered
the valedictory address.
In all, 35 papers were presented in the seminar. The present volume
contains 22 papers which includes 16 thoroughly revised papers presented at
the seminar and six other papers which were either specially commissioned
for this volume or published in the Indian Journal of Labour Economics during
the past two years. Earlier, nine papers of the volume were also published in a
special issue of the Indian Journal of Labour Economics in 1998.
The present volume makes a comprehensive effort to analyse the present
trend, understand the dynamics of development and assess its implications for
the workforce and the people. It overviews the conceptual and methodological
issues relating to the identification of the informal sector and informal workers
and analyses the trends and structure of its growth in recent years using both
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INR>RMAL SECIOR IN INoIA
secondary and primary data. It examines the issues pertaining to wages/
earnings, productivity, macro-micro linkages, etc. and attempts to determine
its prospects of growth providing meaningful employment to a large section of
the workforce in future years. Various aspects of discrimination in labour
market and on the job have been covered although partially by bringing in the
gender dimension. The efficiency and welfare implications of the increasing
absorption of labour force in this sector have been examined by focussing on
the support system and issues relating to social protection. The volume, in
general, attempts to identify areas and avenues that can be pursued to find
solutions to the problems confronting this sector, and thus help in developing
a policy perspective for its healthy growth.
The IliO and IAMR are thankful to the Friedrich Ebert Stiftung (FF.5) for
meeting part of the publication cost of the volume. In bringing out the volume,
we received valuable support from several people. Dr. T. S. Papola, President
of the Indian Society of Labour Economics; Professor L.K. Deshpande, Visiting
Professor at the IHD; Professor Ashoka Chandra, Special Secretary in the
Ministry of Human Resource Development, Government of India and former
Director of IAMR; and Or. H. Ramachandran, present Director of the IAMR,
extended their full cooperation to this venture. The contributions made by
A.J.C. Bose, Rajendra P. Mamgain, Anup K. Karan and Piush Antony were
extremely helpful. Thanks are also due to the colleagues at the Institute for
Human Oevelopment-Alok Anand, Kaushik Roy, Smita Sahai and Rajesh
Shankar-for their help and cooperation in various ways. We are also thankful
to Madhavi Chauhan, Oipika Sen, S.P. Sharma and Rajeev Sen for their
assistance.
Amitabh Kundu
December 10, 2000 Alakh N. Sharma
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