Unorganised Worker

An Unorganised Worker is an individual engaged in employment that falls outside the scope of formal labour laws, social security coverage, or institutional regulation. Such workers typically operate in informal, casual, or self-employed arrangements, with little job security, irregular wages, and limited access to welfare or legal protection. They form the backbone of India’s economy, particularly in sectors such as agriculture, construction, small-scale manufacturing, transport, and domestic work.
Definition
According to the Unorganised Workers’ Social Security Act, 2008, an unorganised worker means:
“A home-based worker, self-employed worker, or wage worker in the unorganised sector and includes a worker in the organised sector who is not covered by any of the Acts listed in Schedule II of this Act.”
This definition covers both rural and urban workers who are engaged in unregistered or informal economic activities and lack the benefits enjoyed by employees in the organised sector.
Characteristics of Unorganised Workers
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Informal Employment Relationship:
- No formal contracts, appointment letters, or employment records.
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Low and Irregular Income:
- Earnings fluctuate due to seasonality, lack of fixed wages, and uncertain demand.
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Absence of Social Security:
- No access to provident fund, pensions, insurance, paid leave, or medical benefits.
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Vulnerability to Exploitation:
- Subject to long working hours, unsafe conditions, and poor bargaining power.
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Skill-Based or Casual Work:
- Many depend on manual skills, crafts, or daily wage labour.
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Limited Legal Protection:
- Labour laws and welfare schemes often do not cover informal workers.
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Family and Self-Employment Dominance:
- Many work in family-run enterprises or as self-employed artisans and traders.
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Lack of Job Security:
- Employment is temporary, seasonal, or daily-wage-based.
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Low Productivity:
- Use of outdated technology and lack of training reduce efficiency.
Categories of Unorganised Workers
Unorganised workers are spread across a wide variety of occupations and can be broadly classified into the following categories:
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Self-Employed Workers:
- Operate small businesses, work as street vendors, artisans, or service providers.
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Casual Labourers:
- Work on daily or seasonal basis, especially in agriculture, construction, or domestic services.
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Home-Based Workers:
- Engage in piece-rate work such as stitching, handicrafts, or packaging from home.
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Contract and Migrant Workers:
- Work under informal contractors, often with poor living and working conditions.
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Agricultural Labourers:
- Work on farms owned by others for daily or seasonal wages.
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Domestic Workers:
- Provide household services without formal agreements or benefits.
Examples of Unorganised Workers
- Agricultural labourers and small farmers.
- Construction workers and masons.
- Street vendors and hawkers.
- Rickshaw pullers and auto drivers.
- Handloom weavers, artisans, and potters.
- Domestic workers and caregivers.
- Small shop owners, mechanics, and repair workers.
- Waste pickers and sanitation workers.
Problems Faced by Unorganised Workers
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Low Wages and Poverty:
- Limited earning potential leads to persistent poverty and indebtedness.
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Job Insecurity:
- Employment is irregular and easily terminated without notice or compensation.
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Lack of Health and Safety Measures:
- Poor working conditions expose workers to occupational hazards and diseases.
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Absence of Social Protection:
- No coverage under formal insurance, pension, or provident fund schemes.
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Limited Access to Credit:
- Dependence on moneylenders due to lack of institutional finance.
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Gender Inequality:
- Women workers are often paid less and face harassment or lack of maternity benefits.
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Lack of Voice and Representation:
- Weak or non-existent unions and associations reduce bargaining power.
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Impact of Economic Shocks:
- Events such as demonetisation or pandemics hit informal workers hardest due to lack of safety nets.
Government Measures for Unorganised Workers
The Government of India has introduced several policies and schemes to safeguard the rights and welfare of unorganised workers:
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Unorganised Workers’ Social Security Act, 2008:
- Provides a legal framework for extending social security and welfare benefits to unorganised workers.
- Covers health, maternity, old-age, and insurance benefits.
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National Commission for Enterprises in the Unorganised Sector (NCEUS):
- Established in 2004 to recommend measures for improving income security and working conditions.
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Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM):
- Voluntary pension scheme offering ₹3,000 per month after age 60 for eligible unorganised workers.
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Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY):
- Life insurance scheme providing coverage up to ₹2 lakh at a nominal premium.
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Pradhan Mantri Suraksha Bima Yojana (PMSBY):
- Accident insurance providing coverage up to ₹2 lakh for accidental death or disability.
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Rashtriya Swasthya Bima Yojana (RSBY):
- Health insurance for unorganised sector workers and their families.
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e-Shram Portal (2021):
- A national database for unorganised workers to link them with social security and welfare schemes.
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Deendayal Antyodaya Yojana – National Rural and Urban Livelihood Missions (DAY-NRLM and DAY-NULM):
- Focuses on self-employment, micro-entrepreneurship, and skill development among informal workers.
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MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act):
- Provides 100 days of guaranteed wage employment annually to rural households.
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Building and Other Construction Workers (BOCW) Welfare Cess Act, 1996:
- Provides safety, health, and welfare measures for construction labourers.
Social Security Schemes under the Unorganised Workers’ Social Security Act
Some key welfare schemes identified under the Act include:
- Aam Aadmi Bima Yojana (AABY) – life and disability insurance.
- National Old Age Pension Scheme (NOAPS) – monthly pension for senior citizens.
- Janani Suraksha Yojana (JSY) – maternity and child health support.
- Anganwadi and Mid-Day Meal Schemes – nutritional assistance for workers and their families.
Strategies for Empowering Unorganised Workers
- Formalisation of Work: Encourage registration of workers through platforms like e-Shram.
- Skill Development: Provide training and education to enhance employability and income.
- Financial Inclusion: Expand access to banking, credit, and insurance facilities.
- Social Security Expansion: Ensure universal health, pension, and accident coverage.
- Strengthening Trade Unions and Cooperatives: Promote collective bargaining and representation.
- Awareness Campaigns: Educate workers about rights and welfare programmes.
- Policy Coordination: Integrate efforts across central, state, and local levels for effective implementation.
Significance of Unorganised Workers in the Indian Economy
- Major Employment Contributor: Over 80% of India’s workforce is engaged in the unorganised sector.
- Supports Economic Growth: Provides essential services and contributes nearly half of India’s GDP.
- Rural Livelihoods: Acts as a lifeline for millions of rural families.
- Social Inclusion: Offers work opportunities to marginalised and less-educated sections of society.
- Flexibility and Adaptability: Responds quickly to local market demands and informal economic activities.
Challenges in Policy Implementation
- Fragmented Workforce: Difficult to identify and register all workers due to mobility and informality.
- Administrative Inefficiency: Overlapping responsibilities among ministries and states.
- Funding Constraints: Insufficient resources for large-scale welfare programmes.
- Lack of Awareness: Many workers remain uninformed about their entitlements.
- Data Deficiency: Limited and outdated statistics hinder effective planning.
Conclusion
Unorganised Workers form the largest segment of India’s labour force and play an indispensable role in sustaining the economy. However, their vulnerability to poverty, exploitation, and insecurity calls for stronger policy interventions and institutional support.