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SEMESTER IV

ECONOMICS SEMINAR PAPER

A PAPER ON:

“WAGES AND SOCIAL SECURITY IN THE UNORGANISED SECTOR

OF INDIA”

SUBMITTED TO:

Dr. JAVED BHATT

NMIMS KPM SCHOOL OF LAW

SUBMITTED BY:
KARTIK JOSHI
SYBBALLB (HONS.)
DIV-C
ROLL NO.-53
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TABLE OF CONTENTS

Sr. Title Page

No. no.
Acknowledgement 5.
1. Abstract 6.
2. Introduction 8.
3. Objectives of the Study 10.
4. Scope of the study 11.
5. Significance of the study 12.
6. Hypothesis 14.
7. Review of Literature 15.
8. Research Gap 18.
9. Research Methodology and Data 19.
9.1 Research Design 19.
9.2 Types of Research Design used in the Study 19.
9.3 Sources of Data 20.
9.4 Period of Data Collection 20.
9.5 Scaling Technique 20.
9.6 Sample Design 20.
9.6.1 Population 21.
9.6.2 Sample 21.
9.6.3 Sampling unit 21.
9.6.4 Sample size 21.
9.6.5 Sampling technique 21.
9.7 Statistical tools used 21.
10. Data analysis and interpretation 22.
11. Findings 42.
12. Conclusion 45.
13. Policy Recommendations/ Suggestions 46.
14. Limitations 47.
16. Sample Questionnaire 48.
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17. Bibliography 49.

LIST OF TABLES AND EXHIBITS

SR no. Title Page no

PART A DEMOGRAPHIC PROFILE 22.
A1. Gender 22.

A2. Age 23.

A3. Average daily wages 24.

A4. Number of earners in the family 25.

A5. Number of dependents in the family 26.

A6. Freelance daily wage worker 26.

A7. Employed in unorganised sector enterprise 27.

PART B BINARY CHOICE QUESTIONS 28.

B1 Aware of existing minimum wages 28.

B2 Beneficiary of social security scheme under govt. 29.

B3 Social security benefits provided by employer 30.

B4 Aware of Legal Employee Status 30.

B5 Aware of the new Labour Codes passed 31.

B6 Status of job during lockdown 32.

B7 Status of migration during lockdown 33.

PART C OPINION BASED QUESTIONS 34.

C1 Paid equivalent to the number of working hours 34.

C2 Govt. has taken steps to uplift social security of 35.

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workers in the unorganised sector

C3 New labour codes step in the right direction 36.

C4 Lockdown effects could have been mitigated had 37.

the govt. taken timely steps
SECONDARY DATA GRAPHS 38.

FIG 1. National Floor level minimum wage 38.

FIG 2. Variance in wages among the states 39.

FIG 3. Global public social security expenditure 40.

FIG 4. Social security expenditure as a percentage of 40.

GDP
FIG 5. Migrant workers returned to their home 41.

ACKNOWLEDGEMENT
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This paper and the research behind it would not have been possible without the exceptional
support of Dr. Javed Bhatt. His enthusiasm, knowledge and exacting attention to detail have
been an inspiration and kept my work on track right from conducting preliminary research on
this topic to the final draft of this paper. His constant guidance inspired me throughout the
research and writing of this paper. I could not have imagined to have a better advisor and
mentor for my study and I would like to thank him for his continuous and generous support
even in this tough time of the Covid-19 pandemic.

I would like to take this opportunity to thank my friends, family and classmates for providing
me with their insights on this research and helping me out with my problems. I would also
like to acknowledge the efforts of all the respondents who gave their valuable time to fill the
questionnaire which was of vital importance to this study. The generosity and expertise of
one and all have improved this study in innumerable ways and saved me from many errors,
those that inevitably remain are entirely my own responsibility.

KARTIK JOSHI

ABSTRACT
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PURPOSE: Financial and social safeguards are key in addressing extreme poverty and
ensuring fair growth and thereby catalysing the transformation into a stronger and more
prosperous economy. Approximately 50% of India's economy is dependent on its informal
employees, who make up 90% of the total workforce.  Yet these informal workers are often
excluded from existing social security programmes and are left without a social or financial
safety net and stuck in poverty. This paper addresses key wage and public social-protection
deficiencies in India and provides policy guidelines to address those deficiencies.

RESEARCH DESIGN: Since the study is primary data based, exploratory research design
has been used for the purpose of problem identification and analysis. Various research
variables such wages, social security (includes healthcare, pension, insurance, leaves, etc),
covid-19, code on wages, code on social security have been identified for the purpose of this
study. For the purpose of reaching conclusive findings, the current study has been conducted
with the help of secondary data to explore the trends in wages and social security in the
unorganised sector in India. Secondary data includes data collected from journals, magazines,
newspapers, etc. The study is restricted to responses from Dehradun only. Simple percentage
method has been used as the statistical tool for data analysis.

FINDINGS: The findings of this research suggest that the trends of the unorganised sector
have been unchanged even after numerous legislations and policy implementations. Most of
the respondents in the present study work under the wage rate prescribed by the state and
receive negligible social security benefits. The data in this research suggests that 90% of the
respondents do not get any welfare or social protection scheme from the government, which
resonates with the pan India data given by the NCEUS, suggesting that the government could
only reach 6% of the entire unorganised sector with its social security schemes. This research
also finds that the new labour codes were hastily implemented by the government and the
workers are still unaware of their existence. The study also finds how covid-19 lockdown
disrupted more than 80% of the informal labour market.

PRACTICAL IMPLICATION: dcThe findings of the study suggested that the government
needed a better mechanism to monitor their policies and legislations and their performance,
rather than bringing in new laws every time the issue of unorganised sector arises. The
findings and the suggestions of this study will be significant to policy makers, economics
students and the general public. The data could help the policy makers in understanding the
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grass root level problems of the workers. The policy recommendations could help the policy
makers frame more comprehensive laws and facilitate better implementation.

ORIGINALITY: This paper focuses on the current state of workers in the unorganised
sector and the wages and social security they have. The work is absolutely original and the
foundation of the same has been laid with the help of primary data through a survey as well
secondary data by way of numerous journals, magazines, newspaper articles, websites, books,
blogs, etc. The researcher has attempted to answer the fundamental research question for
which this study was conducted in the first place.

KEYWORDS: wages, unorganised/informal sector, poverty, covid-19 lockdown, social

security, labour codes

INTRODUCTION
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Nowadays, without the input of the unorganised workforce, it can't be likely to do every day
odd jobs for the people in India. The unorganised workforce in the sector is an integral and
necessary part of the domestic sector that is difficult to perform without them every day. A
doctor, policeman and lawyer can be found conveniently - like people who never take a
break. They operate all day, every day, but we never discuss the work that keeps our daily
indefinite function and work. In almost every sub-sector of Indian industrial economy, the
unorganised sector is the source of work and livelihood for workers. They have gained great
interest in their working conditions, income and social security problems in the recent past,
without much action (NCEUS, 2008). We know the reasons for this. Unorganized jobs
belong to the uncovered market without access to job security insurance, and they are more
vulnerable, both in global and domestic economic conditions, to negative financial shocks.

The National Commission for Enterprises in the Unorganised Sector (NCEUS) in its report
defined the unorganised sector as “The unorganised 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”. The report went on to define unorganised workers as “Unorganised workers consist
of those working in the unorganised enterprises or households, excluding regular workers
with social security benefits, and the workers in the formal sector without any employment/
social security benefits provided by the employers”. Employees of informal employment do
not in general enjoy job security (no safeguards against unfair dismissal), safety at the
workplaces (no health and maternity insurance, pensions, etc.) and social security, so either
one or more of these features may be utilized in defining informal work.

One of the key features of the labour market scenario in India is the predominance of
informal jobs. While the industry contributes approximately half of the county's GDP, its
domination of the job front has led to the informal economy accounting for more than 90% of
the total labour force. The most recent estimate by NCEUS is that the unorganised industry's
contribution to GDP is approximately 50 per cent. The NCEUS Sub- Committee's (NCEUS
2008). In most prominent countries in the world, this trend in the national level of informal
workers with a workforce of about 90% is more or less similar. The workers of an organised
and unorganised sector have some marked variations. Regular employees in the organised
sector have comparatively more safety at work, vacation and medical insurance, pension
benefit, and fair salaries, of course. Unorganized workers clearly have not only been deprived
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of these advantages, but also work much longer hours, lose jobs quickly or get erratic work
and do not cover absence, sickness or old age. The unorganised sector makes significant
contributions to the gross domestic product of India, despite these significant differences.

The government has taken measures over the past year to simplify India's complex patchwork
of labour legislation into four codes. The Wages Code 2019, which was approved by the
President on 8 August, is the first of the codes to be implemented. This Wages Code is
expressly designed to simplify the Indian minimum wage law and aims to place all jobs in
both the organised and unorganised sectors under its competence. The importance of this
creation can hardly be undermined. Most Indian workers are in the unorganised sector, and it
is important that these workers are protected by a structured social security network. This
paper attempts to examine the salaries that unorganised industries in India earn. The emphasis
of this analysis is on labour jobs in terms of salaries and social security. The development of
a developing economy undergoing a phase of structural changes is shaped by small and
informal businesses.

SOCIAL SECURITY

Social security is linked to the high values of the dignity of humans and social justice. It is
the safety that the society offers its members, especially the weaker, so that even under
adverse circumstances, one can lead a normal and decent life. One of the goals of this paper
is to research and evaluate the different social protection systems in India. The unorganised
industry is vast and comprises the main workforce of the country. They are the people who
desperately need social security and the government has therefore established some plans for
this sector only. As in other developed countries, current social security systems (e.g. health,
injuries, death and old age) for contingencies and eventualities in India have legal support
only for those in a formal economic sector which is approximately 8% of the total workforce.
While some social security programmes for informal workers are State-assisted and/or
encouraged, the coverage is not more than 6% of the total. In this context and also in the
growth of the informal sector, the Government of India has set up a NECUS to examine a
range of issues, including the Social Security Agenda. In May 2006, the first study from the
NCEUS to the government was on a comprehensive system for social security. In 2005,
NCEUS reported that 423 million informal jobs, 395 million of whom were members of the
informal sector, existed in India.

WAGES
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In 1948, both the government and government dominated the fixing of salaries, as stated by
the Minimum Wages Act. The governments set their own planned jobs and release minimum
wage rates along with VDA (Variable Dearness Allowance). Wage panels are set up at
certain times to revise and set minimum wages. The wage rates for scheduled work vary
between states, industries, skills, regions, and jobs because of numerous factors.
Consequently, the nation does not have a single universal minimum wage rate and each state
varies in the revision period. The minimal salary law has been introduced to ensure that
employers do not hire insufficiently paid workers. The Act applies to all businesses,
warehouses, market places and forms of industry. Unorganized sectors are usually exempt,
but during a revision period a State may add a minimum salary for a job or specify for a
sector.  Unorganized sector casual jobs are usually the least covered and secure the lowest
level of wages. The salaries for the enormous informal sector cannot be determined by
interplaying market forces. The pay system is not uniform in different states or union district.
This also applies to other jobs which, because of the applicability of the act, do not include all
employees. Thus, the Minimum Wages act does not protect all employment in this sector,
should a government fail to include a particular worker within that industry.

OBJECTIVES OF THE STUDY

 To study the wages and social security schemes available to the workers in the
unorganised sector in India.

 To study the effect of the new labour codes implemented by the government and
their bearing on the lower-level workers and enterprises operating in the
unorganised sector of India.

 To study the effect of the Covid-19 pandemic and the resultant lockdown phase on
the workers and enterprises operating in the unorganised sector in India.

SCOPE OF THE STUDY

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This paper entails the study of the wages and social security aspect of the people working in
the unorganised sector in India. This subject has been studied in reference to the
advancements that have taken place over the years with respect to the general upliftment of
the people working in this class as a whole. As it is widely known, the life of a worker
serving in the unorganised sector is full of hardships and poverty. The policies and laws that
are brought up to help the labourers and the lower-level workers are not implemented in a
proper manner and even if they are, the workers in the unorganised sector are hardly the
beneficiaries of those. Although, most of the research done pertains to the current condition
of the workers and their standard of living, some parts of the study encompass the analysis of
the legal provisions available in this area. This refers broadly to the new labour codes that
were passed by the Indian government in 2020 and are awaiting implementation.

The number of respondents has been limited to 50 as during a pandemic, it was difficult to
approach more people owing to travelling and social distancing constraints. The
questionnaire was filled through personal interviews with the people as most of the
respondents for this study were daily wage workers and labourers who won’t have any means
to fill out or understand an online questionnaire. An online questionnaire was sent to the
respondents who were competent enough to fill out one. The study is based in Dehradun as
the researcher didn’t have means to travel or collect responses pan India in the time of a
pandemic. The data received from this survey is dynamic in the sense that it has responses
from not only the people working as labourers or daily wage earners, but self -employed
freelance workers such as electricians, plumbers, carpenters, etc. These too are people who
operate at a lower-level and are deprived of legal employee status and hence cannot make
minimum wages and are left with no social security schemes.

Hence, the respondents make up a very diverse group and gives the study more accuracy and
acts as a salient feature. The respondents consist of daily wage workers such as construction
labourers, cobblers, hawkers, peddlers, etc.

The main aim of this study is to analyse the wages that these workers earn and how they fare
against the statutory laws on minimum wages in the state. Other important aspect of this
study is to analyse the social security benefits such as healthcare, pension, insurance, etc that
are available to the workers in the unorganised sector and how these benefits fare against the
code on social security implemented by the centre. It is a well-known fact that the ongoing
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pandemic devastated the livelihood of these workers and forced a mass migration. Therefore,
this study will also try to scrutinize the effects that the Covid-19 pandemic had on these
workers under the unorganised sector by examining the first-hand collected primary data
from the respondents.

The researcher has tried to gauge a sense of what the workers under the unorganised sector
are going through and what benefits and basic necessities they are missing out on due to not
having the legal status of an employee. The questions asked in the questionnaire are basic in
nature keeping in mind that the respondents might not be able to respond to questions that are
technical in nature or have any mention of legal provisions or statutes. The researcher has
also asked the respondents as to what sort of approach they would welcome with regards to
the benefits that are provided to them keeping in mind that they are not legally employees and
work in the unorganised sector.

The time period during which this study was conducted was February - April 2021, during
which time the questionnaire was floated and physical surveys were conducted in the various
parts of the aforementioned city. Owing to lack of available resources, the scope of the study
is limited in nature.

SIGNIFICANCE OF THE STUDY

To make any research paper valuable there need to be certain aspects of the study that are
distinguishable or vary from those researches that have been conducted regarding this area of
research study in the past. This research study has identified various areas of research that
need to be studied more in detail. Also, there are various aspects of this study that makes it
relevant to the ongoing shift in the labour laws in the country and the continuous growing
focus on the workers under the unorganised sector.

This study is significant in the sense that it analyses the wages and social security benefits
that are available to the workers in the unorganised using primary data. Also, the researcher
analyses the effect that the Covid-19 pandemic had on the workers in this class. This would
provide the researcher with accurate results as to what the current situation is, with regards to
the standard of living and basic living necessities of the workers in the unorganised sector.
Another aspect of this study which makes it significant is the fact that the researcher has to
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some extent analysed the effect of the new labour reforms in the country and what change
would they bring about in the condition of workers in the unorganised sector. The present
legislations surrounding these workers and the practices and provisions in place currently
have also been researched upon in the study. All these different variables make this study
dynamic and relevant. The fact that there haven’t been plenty of research studies in the recent
times regarding all these variables together adds to the significance of the study.

There are some pre-existing empirical studies about the wages and social security of the
workers in this sector, but they stand outdated and are not very relatable during the ongoing
pandemic and what lies ahead for the workers in the informal sectors getting no relief from
either the government or their enterprises. Another gap that exists in this field is that most
researchers have only followed the old statutes and acts regarding the welfare and wages of
the workers in the unorganised sector. Therefore, in this study the author tries to analyse the
implications and effectiveness of the four new labour codes implemented by the government
of India and how they would affect the workers in the unorganised sector of the country.

The Indian job market is dominated by informal or unorganised industry workers

representing about 93 percent of total Indian workers. India's unorganised industry is one of
the biggest in the post-industrial world, if not the largest. Informal jobs which characterise the
non-organized industry include both informal (small or unregistered) self-employment and
wage work done in informal and formal sector firms without specific employment contracts.
As mentioned earlier, unorganized sector workers in India make up approximately 93% of the
country’s total workforce. Hence in the Indian economy, the unorganized sector plays a key
role and requires particular attention. In this chapter, an attempt was therefore made to
explore the problems and challenges that workers in the unorganised sector face to eliminate
barriers in the unorganized sector to provide employees with at least a minimum basic social
security.

Unorganized workers make approximately 50 percent of the contribution to GDP. But the

legislation has helped the organised population in an overwhelming manner through social
security services. Social security measures should then protect all unorganised jobs, so that
the country develops fully, as of now only 6% of the non-organised workers are covered by
social security measures. This is also a way to recognise true benevolent employees who can
be persuaded to report by the Government. Therefore, attempts have been made by the
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researcher in this study to understand how the new labour reforms might help the unorganised
sector.

This study will be significant to-

 Policy-makers who need to reinvent the laws governing social security and wages
of the workers in the unorganised sector and bringing them up to date with the
requirements of this decade and the coming ones.
 This study will also be of significance to academicians, scholars, and economics
students interested in studying this area of research as it provides a systematic and
detailed study into the current situation of the workers in the informal or
unorganised sector of the country.

 The study will finally benefit the general public gain insight into what and how
much the workers in the unorganised sector contribute to this country’s GDP and
what steps is the government taking for their safeguarding.

HYPOTHESIS

HYPOTHESIS 1

 Null Hypothesis (H10): There is no significant relationship between wages and

the condition of unorganised sector workers in India
 Alternative Hypothesis (H1A): there is a significant relationship between wages
and the condition of unorganised sector workers in India

HYPOTHESIS 2

 Null Hypothesis (H20): There is no significant relationship between social

security and the condition of unorganised sector workers in India.
 Alternative Hypothesis (H2A): there is a significant relationship between social
security and the condition of unorganised sector workers in India.

REVIEW OF LITERATURE
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 CHAITANYA (1991): This paper gives insight into how change has been made in
our country in the enforcement of the Minimum Wage Act of 1948. The unorganized
sector has not yet benefited from the act. This suggests that while the state
administration had agreed, in 1948, to expand the scope of the Minimum Wages Act
to a number of other occupations, it is curious that this act was poorly implemented.
The standards for setting minimum wages have not been established.

 VARKKEY, MEHTA (2007): This paper gives the above article a more current
view. Although the law on minimum wage security for employees in the organized
sector was generally successful, this was not the case for unorganized workers, who
are largely outside the jurisdiction of the laws on minimum wages with regular
review. This paper outlines the questions and problems of the Indian Minimum Loan
Act of 1948. This research also helps to provide the objective of this study with a
wider range of results.

 SRIJA (2014): The present paper gives a case study of the enforcement of the
Minimum Wages Act of 1948, which was one of Independence's earliest employment
laws in India. It reveals that a substantial part of the population is not covered by the
Minimum Wages Act today. This document examines the steps the Government of
India has made since the Act was adopted to increase the importance of minimum
wages, the effect of the Act on the removal of employees from poverty line, the
ongoing problems and the road forward.

 RAMANI (2013): This article is about 12 December 2013, when almost a lakh of
mostly unorganized employees marched in Parliament demanding minimum living
salaries, social security arrangements and job regularization. The author says that the
call was made across the political spectrum by labor unions and participants came
from all parts of the world. But the mainstream and the mass newspapers were
indifferent and, as usual, skipped the protest.
 RAJESHA, T. (2017): The author analyzes the patterns in jobs, pay and social
security for the unorganized workforce in India in this report. Furthermore, in this
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research the existence and scale of deficits in respectable working conditions and the
issues associated with the application of labor protection laws and programmes, on
the one hand, are also identified and analyzed.

 SAKTHIVEL, JODDAR (2006): This paper discusses the number of unorganized

employees working in India, with almost the entire agricultural sector coming under
the informal class, which accounts for nearly 92%. Only one fifth of all non-farm
workers in this organized segment. The last four five-year rounds of employment-
unemployment for national sample surveys are being used in the analysis, using
residual as well as direct approaches. The study looks at formal and informal industry
development and structure in major Indian states through single-digit industries.

 KULSHRESHTHA (2011): This paper looks at the issue of unorganized industry

measurement and discusses the Indian Central Statistical Office's solution. In terms of
the jobs it provides and its relation to value added, the size of the informal industry is
analyzed. A large proportion of our population is employed by the unorganized
segment and is labour intensive. The unorganized section of the economy is closely
aligned with the informal sector ICLS definition in India and in other developing
countries in Asia and the Pacific.

 KRISHNAN (2020): This specific article discusses the latest implementation of the
pay code by the government. It illustrates how about 40 national and central
legislation currently regulate various facets of labor, including trade dispute
settlement, job conditions in factories, and wage and benefit payments. Any scholars
have over the years proposed consolidation of these laws to facilitate enforcement. As
existing regulations differ, they will also have better coverage for consolidation. In
this context, the author aims to clarify the existing legislation, core provisions of the
Code and some topics.

 SATYAM (2018): This paper touches on issues from job insecurity to dangerous
working environments. The aims are to address the word 'informal economy' and the
plight of unorganized jobs and government measures for the welfare of workers.
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 CHATTERJEE, (2016): The Author points out that many informal workers are not
able to meet their daily needs, the greatest number of working women are consistently
victims of low wages if in contrast to men, the laws for the safety of labor are
numerous, but these laws are regularly implemented in organized sectors, but are
currently not used in unorganized ways. The author has therefore sought to
concentrate here on numerous unorganized problems of work and the solutions
needed.

 HODA, RAI (2017): This paper discusses the different work regulations which the
government has adopted to strengthen the social security of Indian workers. The
present paper reviews and analyzes current Indian regulations that include reverse
mechanisms and assesses how they respond to regimes in selected comparator
countries and test against the minimum requirements prescribed by different ILO
Conventions. The regulations are relevant not only in terms of the social security, but
also in terms of the workforce's productivity. The study shows significant weaknesses
in the laws and programs on social security in the country insofar as they refer to
unorganized jobs.

 JADHAV (2021): In this article the author writes about the covid-19 induced
lockdown and the subsequent effect it had on the workers. The author reports that the
wage loss of formal workers was ₹5,326 crore and informal workers ₹81,122 crore.
The casualty of informal workforce was proportionately greater than that of formal
employees, meaning that informal workers lost 22.62% of salaries compared to 3.66%
for formal workers. The study adds that postponed pay rises or frozen wages have
occurred at the local or sectoral level in many countries, including India as a result of
the Covid 19 crisis.
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RESEARCH GAP

Research gap is a research question or problem which has not been answered
appropriately or at all in a given field of study. It essentially draws the attention of the
readers towards the unexplored or under-explored areas of the existing research
respectively.

A wide range of literature could be found on the enterprises and the labourers working in
the unorganised sector in India. Studies have been done from the composition aspect to
the significance of the unorganised sector of the country, the author also found a lot of
credible literature which established the importance and the contribution of this sector. It
will suffice therefore to point out that extensive research has been done on the topic from
a composition point of view. The gap that really exists in the topic under question is that
no thorough research has been done on it from the social security and the welfare
perspective of the labourers at the grassroot level. There are some pre-existing empirical
studies about the wages and social security of the workers in this sector, but they stand
outdated and are not very relatable during the ongoing pandemic and what lies ahead for
the workers in the informal sectors getting no relief from either the government or their
enterprises. Another gap that exists in this field is that most researchers have only
followed the old statutes and acts regarding the welfare and wages of the workers in the
unorganised sector. Therefore, in this study the author tries to analyse the implications
and effectiveness of the four new labour codes implemented by the government of India
and how they would affect the workers in the unorganised sector of the country.

This study therefore is unique in the sense that it tries to analyse the problems of the
workers and enterprises of the unorganised sector at the grassroot level and how the
recent Covid-19 affected them. The new labour codes as mentioned before would also be
analysed and their effectiveness would be tested from the view point of the workers in the
unorganised sector of India.
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RESEARCH METHODOLOGY AND DATA

This section of the study pertains to the analysis and definition of the manner in which the
research for this project was conducted. Some of the important aspects of this section are
research design, sources of data collection, period in which the data was collected, scaling
technique, sample design, and other related facets of the research. In other words, this part of
the project aims to explain in detail the intricate details about the research itself. Further, this
section gives a brief account of the sample population to the study.

RESEARCH DESIGN

The research design is the blueprint of the research conducted on a particular study. It
provides an account of the various tools and techniques used while conducting the research.
Most importantly, it helps the researcher in integrating the various different aspects and
components of the research process.

TYPES OF RESEARCH DESIGNS USED IN THIS STUDY

In this particular study, both exploratory as well as descriptive research designs have been put
to use by the researcher. Both of these research designs have been used to study the scenario
of wages and social security schemes offered to the workers in the unorganised sector and the
new labour codes that have been passed by the parliament.

EXPLORATORY RESEARCH DESIGN

Exploratory research is used in problem identification, and as the name suggests, in exploring
the possible causes of the same. It is via exploratory research, that the research variables are
formulated and hypothesis is established. In this study, the researcher has studied the scenario
around the condition of the workers in the unorganised sector in India and has reviewed
literature on the same. Literature review involves a study of various journals, articles, papers,
newspaper articles, etc. This literature review helped in the formulation of research variables,
which, in turn, helped in the formulation of the hypothesis.
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DESCRIPTIVE RESEARCH DESIGN

As the name suggests, the descriptive research design is used to describe the various aspects
of the research, such as the population, problem, circumstances, and other research related
details. In this particular study, descriptive design has been studied to describe the current
scenario of unorganised sector and its workers in India using variables such as wages, social
security schemes, the new labour codes and the Covid-19 pandemic.

The type of descriptive research design used for the purpose of this study is survey, as
respondents from various small enterprises and labourers operating in the unorganised sectors
have been contacted for gathering information.

SOURCES OF DATA COLLECTION

PRIMARY DATA

Primary Data has been collected via only questionnaires. The said questionnaires were filled
through online as well as offline mode as most of the respondents were labourers and workers
with limited access and knowledge of the online sources.

SECONDARY DATA

Secondary Data has been collected via conventional mediums. These include books, journals,
articles, publications, newspaper editorials, conference and seminar entries, etc.

PERIOD OF DATA COLLECTION

The data for this study was collected during the months of January 2021 to March 2021.

SCALING TECHNIQUE

Two types of scaling techniques have been used in the present study, namely Interval scaling
and Nominal scaling. The basic demographic characteristics have been studied on the
nominal scale. These include age, education, gender, marital status, employment status,
income, etc.
 P a g e | 21

The questionnaire has been prepared using only closed ended questions. These close ended
questions providing the respondents with multiple choices provide a much more precise data
base.

SAMPLE DESIGN

POPULATION

Population is the total aggregate of all the elements which are consulted for the purpose of a
research study. It comprises the total universe for a particular study. It includes various sets
and elements which define the respondents based on various factors such as locality, age, etc.
In other words, population is the total pool of data populace from whom data is garnered.

The population for the current study includes people from different cities of India. Thus, this
study tends to have a wider population base.

SAMPLE

Sample is a sub group selected from the total population for the purpose of preciseness and
conciseness. In this study workers in the unorganised sector working in the lower levels are
our sample.

SAMPLING UNIT

Sampling units are the basic units which consist all of the research universe/ population. The
data for this particular study has been collected from the respondents from the unorganised
sector.

SAMPLE SIZE

Sample size is the number of samples chosen from the total population. The population/
universe for this study comprises of 50 respondents working in different areas in the
unorganised sectors.

SAMPLING TECHNIQUE

For the purpose of this study, three types of sampling techniques have been used. They are
purposive, multi-state, and convenience. All these techniques have been used specifically due
to the nature of the study.

STATISTICAL TOOLS USED

 P a g e | 22

The data garnered from the respondents has been interpreted in order to suit the needs of the
study. For this purpose, simple percentage method has been used.

DATA ANALYSIS

PRIMARY DATA

Data analysis has been classified into Descriptive analysis & Inferential Analysis. For doing
the descriptive analysis, the simple percentage method has been used to calculate the
frequencies and generate the summary tables. Inferential analysis has been used to derive the
logical conclusions of the samples.Although an attempt has been made to have respondent
base which is similar to the universe, however, due to paucity of time and lack of resources, it
may not be the case here.

PART A – DEMOGRAPHIC PROFILE

1. GENDER

GENDER

FEMALE
20%

MALE
80%

MALE FEMALE OTHER

INFERENCE
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The above table is a representation of the Genders of the respondents wherein 80% (40) of
the respondents are male whereas 20% (10) of the respondents are females. From the above
data it can be inferred that a significantly greater number of Males have filled the
questionnaire as compared to the number of females and hence there is a possibility of the
responses being more male centric.

2. AGE

AGE
50< 18-24
14% 14%

40-50
20% 24-30
24%

30-40
28%

18-24 24-30 30-40 40-50 50<

INFERENCE

From the chart it can be seen that the age group of the respondents is very diverse in nature.
The researcher has collected responses from workers of different age groups which adds
more utility to the study. As shown, the maximum respondents were from the age of 30-40 at
28% (14). There were 14% (7) respondents within the age bracket of 18-24 and 24% (12)
within the age bracket 24-30. The older respondents belonging to the age group of 40-50
were 20% (10) and there were 14% (7) respondents who were above the age of 50. India as
we know has the highest percentage of youth and employable workforce in the world. This
trend can again be noticed in the present research as almost 66% of the respondents were
below the age of 40.

3. AVERAGE DAILY WAGES

 P a g e | 24

AVERAGE DAILY WAGES

10% 4%

14% 24%

48%

200 200-400 400-600 600-800

800-1000 1000<

INFERENCE

Majority of the respondents i.e. 48% (24) fell within the 400-600 wage-bracket. The next
major bracket was of 200-400 at 24% (12). There were 14% (7) respondents who were
earning between 600-800 rupees per day. 10% (5) of the respondents showed earnings of
800-1000. There were respondents who could not even make wages close to 200 with 4% (2)
of them falling in that category. None of the workers responded to the >1000 bracket
however. This shows that most of the workers in the unorganized sector are unable to make
wages to afford a decent standard of living. Most of them might not be able to afford food or
housing as 76% of the respondents were not able to make more than 600 rupees per day on
average. This data is more relevant if it is analyzed along with factors such as number of
dependents in the family or the number of bread earners in the family. This would help make
a proper structure of the average family income and the expenses incurred by family. It is
important to note that the workers even in the unorganized sectors have families that they
need to support and the daily wages they earn must be analyzed keeping the size and basic
needs of their families in mind. The researcher has therefore, has asked all the above-
mentioned questions such as the number of dependents and number of earners in the family
that would make this data relevant and more accurate.
 P a g e | 25

4. NUMBER OF EARNING MEMBERS IN THE FAMILY

NUMBER OF EARNERS IN THE FAMILY

16%

36%

20%

28%

SOLE 2 OR 3 3 OR 4 5 OR MORE

INFERENCE

It can be seen from the above data that the majority of the respondents i.e. 36% (18) said that
they were the sole earners in the family. 28% (14) of the respondents were reported to have
two to three people working in their family. There were 20% (10) such respondents who had
three or four people working and earning wages back home. The remaining 16% (8)
respondents were people who had five or more family members working at the same time.
This forms for a very interesting and important inference for this study. As per the data
received it can be noticed that there are many workers who are the sole bread earners of their
families. We could see from the previous data that most of the workers failed to make decent
wages. Both of these stats clubbed together would mean that most people work single
handedly and are unable to support their families. There is another important inference from
this data, there are many respondents who have multiple members of their families working
simultaneously to afford a living. This means that the cost of living is so high that a single
person earning cannot make do alone. This also conforms to the norm that the people
working in the unorganized sectors working unskilled jobs engage in labor work hereditarily
and start working early.
 P a g e | 26

5. NUMBER OF DEPENDENTS IN FAMILY

NUMBER OF DEPENDANTS IN YOUR FAMILY

16% 20%

24%

40%

NONE 1--2 2--4 4--6 MORE THAN 6

INFERENCE

Majority of the respondents had 2-4 dependents in their families with 40% (20) of the people
responding to this category. There were 20% (10) respondents who had lesser dependents in
their families with each having only 1 or 2. 24% (12) of the respondents had around 4-6
dependents in their family. 16% (8) of the respondents had more than 6 dependents in their
family. It could therefore be inferred that all the respondents had people back home whose
needs they had to cater to. This is an underlying problem with the unorganized sector and the
subsequent surge in population. People who work in this sector are unable to make even the
minimum wages and are also devoid of any social security and welfare benefits such as
healthcare, insurance or pension schemes.

6. ARE YOU A FREELANCE DAILY WAGE WORKER

 P a g e | 27

ARE YOU A FREELANCE DAILY WAGE

WORKER

NO
40%
YES
60%

YES NO

INFERENCE

60% (30) respondents said yes when asked if they worked as a freelance daily wage worker.
40% (20) of the respondents said no when asked the question. The ministry of labor and
employment says- “The unorganized sector is made up of every unorganized private
company owned by individuals and households engaged in the sale and production, with
fewer than 10 employees, of products and services conducted in a proprietary or collaboration
manner.” Therefore, apart from people working as laborers there are many people working in
small enterprises which are not registered. According to the data of this survey, there is a
majority of the people in freelance work, be it construction labors, domestic workers,
vendors, etc.

7. ARE YOU EMPLOYED IN ANY ORGANIZATION DEFINED UNDER THE

UNORGANIZED SECTOR
 P a g e | 28

ARE YOU EMPLOYED IN ANY ORGANISATION

DEFINED UNDER THE UNORGANISED SECTOR

YES
40%

NO
60%

YES NO

INFERENCE

60% (30) respondents were not employed at any organization, be it registered or unregistered.
The remaining 40% (20) respondents were employed in some or the other small-scale
enterprise which was unregistered, hence falling under the unorganized sector.

PART B – BINARY CHOICE QUESTIONS

1. ARE YOU AWARE OF THE EXISTING MINIMUM WAGES IN YOUR STATE

ARE YOU AWARE OF THE EXISTING MINIMUM

WAGES IN YOUR STATE
YES
12%

NO
88%

YES NO
 P a g e | 29

INFERENCE

As it can be seen from the above chart, 88% (44) of the respondents had no idea about the
existing minimum wages that are implemented by the government in their case. As the data
has been collected from just one city that is Dehradun, the existing minimum wages in the
state of Uttarakhand are being talked about. The remaining 12% (6) respondents said that
they knew the existing minimum wages in their state. The main inference to be derived from
this data is the fact that people in the unorganized sector are largely unaware of the fact that
there exists a minimum wages act or some similar legislation that could help protect their
rights and provide them with decent standard of living. Upon individual analysis of the data
and feedback provided by each of the respondent, the author found out that the people had no
idea about the grievance redressal mechanisms that the government had provided the people
the people of the unorganized sector with. This can be largely attributed to the lack of
education among these workers as the unskilled labors are not required to have any formal
education in the unorganized sector.

2. ARE YOU A BENEFICIARY OF ANY SORT OF SOCIAL SECURITY SCHEME

UNDER THE GOVERNMENT

ARE YOU A BENEFICIARY OF ANY SOCIAL

SECURITY SCHEMES UNDER THE GOVERNMENT
YES
10%

NO
90%

YES NO
 P a g e | 30

INFERENCE

It is clear from the above data that the workers in the unorganized sector have little to no
benefits when it comes to social security and welfare. A significant number of respondents
that is 90% (45) said that they had not received any benefits from the government when it
came to social security and welfare. 10% (5) of the respondents however, said that they
received some sort of help from the government regarding healthcare and finance or some
other welfare scheme. The inference from this data is clearly points out the failure of the
government to reach out to the people in the unorganized sector. This data also runs in
alignment with the data provided by the NCEUS in its report. The report clearly mentioned
that 93% of the people in India worked in the unorganized sector at some level or the other.
The government even after brining in repeated legislation and policies failed to reach out to
people of this sector. Approximately 500 million people work in the unorganized sector and
out of this huge number, only 6% of the people receive social security benefits and public
welfare schemes. The sample size of the present research is small in nature, but runs in
conformity with this NCEUS report. This goes to show that the average worker in the
unorganized sector is devoid of any social security benefits from the government.

3. ARE YOU PROVIDED ANY SORT OF SOCIAL SECURITY BY YOUR

EMPLOYER

ARE YOU PROVIDED WITH ANY SORT OF

SOCIAL SECURITY BENEFITS BY YOUR
EMPLOYER
YES
14%

NO
86%

YES NO

INFERENCE
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The stats in this chart are only slightly different from the previous one. Here 86% (43) of the
respondents said that they did not receive any social security benefit from their private
employer. 14% (7) of the respondents said that they received something of that sort. This data
goes to show that the private sector employers are slightly better off in providing social
security benefits to their employees than the government.

4. ARE YOU AWARE OF THE BENEFITS OF HAVING A “LEGAL EMPLOYEE”

STATUS

ARE YOU AWARE OF THE BENEFITS OF HAVING

A "LEGAL EMPLOYEE" STATUS
YES
4%

NO
96%

YES NO

INFERENCE

The above data suggests that 96% (48) of the respondents had no idea what a legal or
registered employee is and what benefits he might enjoy. A mere 4% (2) respondents knew
what being an employee meant in legal terms. This again points out the lack of awareness and
education in the unorganized sector. An employee is an individual who has entered into or
works (or worked) under the terms of a contract of employment. The people working in the
unorganized sector have no such contract of employment. An employee is eligible for proper
wages, social security benefits and earned leaves. The people in the unorganized sector are
deprived of all such benefits and work at a much lower wage as the government hasn’t been
able to bring parts of the unorganized sector into the organized or the formal sector.

5. ARE YOU AWARE OF THE NEW LABOR CODES PASSED BY THE

GOVERNMENT
 P a g e | 32

ARE YOU AWARE OF THE NEW LABOUR CODES

PASSED BY THE GOVERNMENT
YES
4%

NO
96%

YES NO

INFERENCE

Out of the total sample, 96% (48) of the respondents were unaware of the fact that the central
government had passed four new labor codes. Only 4% (2) of the respondents knew about the
transition in labor laws in the country and how it might affect them. Under the new plan, 44
central laws will be subsumed into four broad codes on wages; industrial relations;
occupational safety, health and working conditions (OSH) and social security. These laws
have been passed by both the houses of the parliament and are awaiting implementation. The
government has enacted these laws for the upliftment of the unorganised sector in an attempt
to bring it at par with the organised sector. The data however suggests that the workers in the
unorganised sector are largely unaware of these reforms.

6. DID YOU LOSE YOUR JOB DURING THE COVID-19 LOCKDOWN

 P a g e | 33

DID YOU LOSE YOUR JOB DURING THE COVID-

19 LOCKDOWN
NO
12%

YES
88%

YES NO

INFERENCE

Majority of the respondents, that is 88% (44) lost their job during the lockdown last year
caused by the Covid-19 pandemic. Only a mere 12% (6) of the respondents said that they got
to keep or got to return to their job after the lockdown got over. The workers in the
unorganised sector are not bound to any formal agreement or do not have any terms of
employment. This is the fact that led to a massive loss in jobs in the unorganised sector. Lack
of proper funds and capital prevented the enterprises in the unorganised sector from retaining
their employees. As the lockdown progressed, 80% of workers in the informal sector lost
their jobs. These include, for different reasons, daily wage labour, street vendors, small
companies and retails. Much of their income depends on face-to-face customer interactions,
which under the previous preventive constraints were not permitted and remained difficult
even after lockdown was lifted. As most informal workers have low incomes in developing
economies, they have no way to easily adopt alternative working methods. Also, the fact that
these workers are not beneficiaries to social security schemes like provident funds, insurance
or healthcare made matters worse. The data shows how workers who were already living and
working in subpar conditions lost their jobs and their only source of livelihood due to the
lockdown caused by the covid-19 pandemic.

7. WERE YOU FORCED TO MIGRATE DUE TO THE COVID-19 LOCKDOWN

 P a g e | 34

WERE YOU FORCED TO MIGRATE DUE TO THE

COVID-19 LOCKDOWN

NO
30%

YES
70%

YES NO

INFERENCE

As discussed above, majority of the workers in the unorganised sector lost their jobs during
the lockdown phase. This resulted in a survival crisis for many of the workers and forced
them to migrate back to their native towns. 70% (35) of the total respondents said that they
were forced to go back to their hometown while the remaining 30% (15) said that they
persisted. According to the World Economic Forum, there are approximately 139 million
migrants in the country. Due to the pandemic and the lockdown, around 400 million workers
were expected to be poorer according to the International Labour Organization (ILO). Most
migrants are from Uttar Pradesh and Bihar, Rajasthan and Madhya Pradesh. The workers had
nothing to fall back to and no social security or welfare schemes to rely upon. This caused a
mass exodus of migrant workers.

PART C – OPINION BASED MULTIPLE CHOICE QUESTIONS

1. I FEEL THAT I AM PAID EQUIVALENT TO THE NUMBER OF HOURS I PUT

INTO WORK
 P a g e | 35

14
13
12
11
10
9
8
7
6
STR ONG L Y AG R EE 5 0%
AG R EE 4 0%
NEU TR AL 3 20%
D I S AG R EE 2 20%
S T R O N G L Y D I S A G R E E 1 60%

INFERENCE

Most of the respondents in the unorganised sector strongly disagreed with the statement that
they are compensated fairly for the work they do. The people strongly disagreeing were 60%
(30) of the total respondents. There were 20% (10) respondents that also disagreed with the
statement. The remaining 20% (10) respondents were neutral to this statement. This data is a
clear indicator to the fact that the workers in the unorganised sector are not content with the
wages that are being provided to them. Following the threshold of the minimum wages or
not, the money that the workers in this sector make is not in alignment with the volume of
work they put in. It is understood that most of the workers are unskilled in this sector,
anyhow the fact that they are overlooked while providing the social security benefits and the
wages that they earn are not enough makes them believe that they are working too hard for
too little. The above data is testament to this fact as most of the respondents strongly
disagreed with the statement.

2. I FEEL THAT THE GOVERNMENT HAS TAKEN ADEQUATE STEPS TO

UPLIFT THE WAGES AND SOCIAL SECURITY CONDITION OF THE WORKERS
IN THE UNORGANISED SECTOR.
 P a g e | 36

12
11
10
9
8
7
6
STR ONG L Y AG R EE 5 0%
AG R EE 4 10%
NEU TR AL 3 10%
D I S AG R EE 2 28%
STR ONG L Y D I SAG R EE 1 52%

INFERENCE

Most of the respondents negated the statement that the government had taken adequate steps
to improve the conditions prevailing in the unorganised sector of the country. A significant
number of respondents, that is 52% (26) strongly disagreed with this statement with another
28% (14) respondents disagreeing with it. 10% (5) of the total however, were in agreement
with the fact that the government had indeed taken actions towards their welfare and overall
upliftment of the unorganised sector. The remaining 10% (5) people chose to respond
neutrally to the statement. The data gives us a clear picture of what the workers in the
unorganised sector thinks about the efforts of the government. A massive 80% of the total
respondents were convinced that the government had not done enough for them and that they
are not getting the benefits they ought to receive. A number of new policies and legislations
have been implemented by the government to reform the unorganised sector in the recent
times. However, the people working at the grassroot level seem to disagree with this and hold
the government accountable for not doing enough for them.

3. I FEEL THAT THE NEW LABOUR CODES ARE A STEP IN THE RIGHT
DIRECTION FOR THE UPLIFTMENT OF THE UNORGANISED SECTOR
WORKERS.
 P a g e | 37

12
11
10
9
8
7
6
STR ONG L Y AG R EE 5 4%
AG R EE 4 20%
NEU TR AL 3 50%
D I S AG R EE 2 20%
STR ONG L Y D I SAG R EE 1 6%

INFERENCE

the new labour codes are part of the effort of the current government to make reforms in the
existing labour sector of the country. These reforms come in the form of policies and
legislations which are passed by the parliament and made at the highest levels of the
government. The above data shows that a majority of the respondents, that is 50% (25) have
chosen to stay neutral. The rest however, are divided in their opinions with both supporting
either sides almost equally. 20% (10) respondents disagreed with the statement while 6% (3)
strongly disagreeing. The remaining 20% (10) and 4% (2) chose to agree and strongly agree
with the statement respectively. The neutral responses might be an indicator to the lack of
awareness to the recent reform. The unorganised sector as we all understand suffers from lack
of proper education. This fact might have prevented them from knowing what these
legislations were really about how it would affect them. The rest of the data for this question
seems to corrupted as well. This is because when the people were earlier asked the question
that whether they knew about the recently passed labour codes, 96% of them said that they
had no idea whatsoever about it. Here people have responded in a mixed manner which
suggests that the data might not be entirely accurate in the present case.

4. I FEEL THAT THE EFFECTS OF THE COVID-19 LOCKDOWN ON THE

WORKERS COULD HAVE BEEN MITIGATED, HAD THE GOVERNMENT
TAKEN PRIOR STEPS TO UPLIFT THE UNORGANISED SECTOR.
 P a g e | 38

STR ONG L Y AG R EE 5 44%

AG R EE 4 20%

NEU TR AL 3 18%

D I S AG R EE 2 18%

STR ONG L Y D I SAG R EE 1 0%

INFERENCE

Most of the respondents were in agreement of this statement in one way or the other. There
were 44% (22) respondents who strongly agreed to this statement while 20% (10) who
agreed. The remaining respondents were divided equally as both either strongly disagreed or
just disagreed with 18% (9) on each side. The data suggests that the workers hold the
government accountable for not being able to provide enough security to the workers in the
unorganised sector. The workers in this sector are in a precarious state and this fact was
brought up by the recent covid-19 pandemic. The lockdown phase showed us how fragile the
condition of the workers was with people going out of jobs in no time, having nothing to eat
and forced to migrate back on foot.

SECONDARY DATA

FIGURE 1: NATIONAL FLOOR LEVEL MINIMUM WAGE AS PRESCRIBED BY

THE CENTRE
 P a g e | 39

“The above graph is the indication of the floor level minimum wage that has been prescribed
by the government after going through several changes over the years. In January, a
committee of experts nominated by the Minister of Labour recommended that the
government fix Rs 375 per day for the national minimum wage. This is the minimum amount
needed to meet a worker's family expense, maintain his or her health and maintain them
productive at the job. The government sent the Wages Code Bill to the Parliament seven
months later. The bill specified that, whatever the nature of the worker or the qualifications of
a worker, the Centre must set a national minimum salary – the lowest payable by an
employer. his would be fixed on the basis of the living conditions of workers and the
geographical regions in which they reside and work. But the Bill did not mention a specific
figure. It was questioned why the government did not take into account the wages
recommended by its own committee.” The minimum wages for each sector remain different
in various states. Lack of implementation of a proper plan has increased the gap between the
workers and caused even more migrations.

FIGURE 2: VARIANCE IN MINIMUM WAGES AMONG THE STATES

P a g e | 40
 P a g e | 41

FIGURE 3: GLOBAL PUBLIC SOCIAL SECURITY EXPENDITURE AS A

PERCENTAGE OF GDP

FIGURE 4: SOCIAL SECURITY EXPENDITURE AS PERCENTAGE OF GDP

 P a g e | 42

FIGURE 5: WORKERS FORCED TO MIGRATE BACK DUE TO COVID-19

LOCKDOWN
 P a g e | 43

During the lockdown, many migrant workers from different states attempted to go back

home. The migrants started on foot to enter their home town because of the suspension of the
public transport facilities. The central government, subject to cooperation between States,
was subsequently authorised for buses and special Shramik trains. More than 58 lakh
migrants were transported by specially operated trains between 1st May and 3rd June, 41lakh
were carried by highways, respectively. The mass exodus of workers was triggered by the
unavailability of jobs and unreliable distribution of relief packages. The government was
overwhelmed by the sudden migration of the workers and as a result failed to provide enough
channels for the workers to head back. This also resulted in number of deaths of among these
workers.

FINDINGS

WAGES AND THE SUBSEQUENT IMPACT OF LABOUR CODES

 P a g e | 44

The findings, through the analysis of the primary data in the present research, resonate the
same old notion. Most workers in the unorganised sector were found to be working under the
prescribed minimum wage by the state. Further questions about the dependants and income
suggested that most of the workers had to support multiple dependants while being the sole
earner of the family. The 2019 Wages Code was supposed to be an answer for this problem.
It aimed at universalizing minimum wage requirements and prompt payment for all workers,
this was passed and was adopted by Parliament. It opens the way for universal national
“minimum wages, subsuming four current laws– the Minimum Wages Act (1948), Payment
of Wages Act (1936), Payment of Bonus Act (1965) and Equal Remuneration Act (1976).
There are some worthy aspects of the law. It includes almost 50 crore organised and
unorganised jobs in the sector and protects full-time, part-time and contract” employees
around the nation. The Code calls for the establishment, through employer leaders, trade
union and state governments, of multi-stakeholder boards to address workers' floor wages. It
has provided for gender-neutral equal wages. It will also try to standardise some definitions,
reduce authorities, use the inspection technologies and impose heavier penalties on non-
compliance. “The key concern, however, is the multiplicity of minimum wage rates that the
Code states should be fixed on basis of geographical regions, skills and how hazardous a
vocation may be. A single statutory minimum wage applicable for workers across sectors
which could be indexed for cost of living in specific regions may have been easier to
implement.” There is also no clear reason for fixing the wage floor. A panel of seven labour
ministries had proposed in January, along with a housing allowance of Rs 1.430 for urban
workforce, that "single national value of the national minimum wage for India should be set
at Rs 375/day." However, following the code, a national minimum wage of Rs 178 per day
was indicated by the Ministry, merely a raise of Rs 2 compared with the existing minimum
wage of Rs 176. The problem is that 57 per cent of ordinary workers earn less than Rs 10,000
per month, and almost 60 percent of casual workers earn less than Rs 5,000 per month. The
2019 Wages Code is therefore a welcome first move. In order to substantially enhance Indian
workers' conditions and consequently the broader economy, however, the government will
have to consider how to better balance competing interests in a process that works for all
stakeholders concerned.

CURRENT SCOPE OF SOCIAL SECURITY IN THE UNORGANISED SECTOR

A significant number of respondents that is 90% (45) said that they had not received any
benefits from the government when it came to social security and welfare. 10% (5) of the
 P a g e | 45

respondents however, said that they received some sort of help from the government
regarding healthcare and finance or some other welfare scheme. The inference from this data
is clearly points out the failure of the government to reach out to the people in the
unorganized sector. This data is synonyms to the previous reports of the NCEUS which
suggest that the penetration of government welfare and social security schemes in the
unorganized sector was only 6%. Since the Constitution was adopted in 1951, India has
implemented numerous social protection programs, including detailed pension acts, health
insurance, disability and maternity benefits for its organized sector. Policies such as the
Employees' Provident Fund (EPF) and the ESIC ensure a stable social security system for
both private and public employees. I n theory, both formal and informal (casual or seasonal)
employees should be in purview and should qualify for such policies. In practice, however,
their reach is restricted to formal long-term contract jobs. These employees are those who
have attained legal status. When the respondents were asked about the benefits of being an
employee, 96% of them had no idea as to what the term meant.

Working conditions in the unorganised sector are the cornerstone to adverse effects on health
of employees. Low nutrient intakes due to low incomes, unstinting physical labour leads to
continuous health problems for employees and risks to life too. Lack of healthcare also
causes working poor people to forget about themselves or become indebted. For domestic
workers, several studies have shown health issues, mostly due to respiratory problems caused
by tobacco dust and body wear and tear by inhalation, because of the peculiar position that
needs to be maintained during work. The data in this study also shows that 80% of the
workers said that they were not paid equivalent to the number of hours they put in, skill-set
put aside. Whilst employees in the economically structured sector—formally working in the
government or private sector—will be protected by employer-facilitated social security
policies, the unorganized sector is entirely reliant on public spending. India actually spends a
mere 1.3 percent of its GDP on public social security services that are far below the world
average. In addition to their large health-care spending, successful economies such as
European social democracies spend a minimum of 20 percent of their GDP on welfare
security. In addition, India is one of Asia's lowest spenders.

COVID-19 LOCKDOWN IMPACT ON THE UNORGANIZED SECTOR WORKERS

The data in the present study shows that most of the workers lost their job due to the
lockdown and were forced to migrate back to their hometown. Majority of the respondents,
 P a g e | 46

that is 88% (44) lost their job during the lockdown last year caused by the Covid-19
pandemic while 70% of them were forced to migrate. Researchers at Azim Premji University
used nationally representative data from the Centre for Monitoring of Indian Economy to find
that about 68 percent of men who lost jobs in April 2020 saw a decrease in income between
December 2019 and August 2020. Women were the hardest hit, with 56% still unemployed in
December. Another survey conducted by APU revealed that incomes had halved and food
insecurity increased by zooming in the informal sector in November. During lockdown, 90%
of respondents reported a decrease in food consumption; of them only 30% reported a return
to pre-lockdown levels in November. both of these researches show that the condition of the
workers in the unorganised sector had deteriorated throughout the lockdown, almost
uniformly in the entire country.The Consumer Pyramids Household Survey’s (CPHS) fast-
frequency forecasts were able to provide early indicators of the lockdown's effect on labour.
These also showed the high stress level in April, followed by a steady change since then.
Although the cumulative effect of the lockdown has subsided, 11 million jobs have been lost
as a result of it. While the immediate effect on small traders, hawkers, and daily wage earners
was serious, the salaried workers suffered a longer-term impact. This again resonates with the
present research where 88% of the casual, small scaled workers lost their job during the
lockdown.Informal workers who have incurred debt are at risk of being coerced into bonded
labour, also known as "debt slavery". Millions of informal sector workers are in dire need of
cash and food, making it difficult for them to obtain credit from conventional sources. As a
result, they may have turned to informal moneylenders who give higher-interest loans,
placing them in debt, putting them at risk of abuse, and trapping them in bonded labor.
People buy the most basic goods in limited amounts intended only for everyday consumption
because of rising debt, shrinking savings, rising food inflation, and often absent wages. as a
matter of fact, only 63 percent of the respondents said they were able to eat two meals a day
after the lockdown. This mechanism has most likely trapped India's informal workers.
Reform of the informal economy is critical. COVID-19-related hardships, in particular,
require additional assistance. However, gathering adequate data on informal jobs is difficult
due to the lack of employment contracts, social security, or other benefits. As a consequence,
implementing policies to help or change the sector would be difficult.

CONCLUSION
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A vast majority of employees in the country are from an unorganised sector, including
agriculture, building industry, shops, roads, small-scale service providers, salt pans, domestic
jobs, reprocessing industry, beedi industries and so on. In severe circumstances, unorganised
jobs operate without enough advantages. Security and support for unorganised employees in
the sector are extremely necessary for both economic and social development. Unorganized
jobs contribute nearly 50% of our GDP. Yet the legislation has provided the organised
workers primarily with welfare services (social security). Social protection policies should
also be implemented to cover all the unorganised jobs in order to bring the country to full
growth. This is also a tool for identifying genuine hardworking people who can be prompted
to register by the government. The payment of salaries by the owner, subcontractor, agent
and intermediaries violates the wage rules which cause marginalised workers misery. Sub-
contract employment has evaded the law-specified welfare requirements. Failure to comply
with the labour rules on minimum wage, social security and healthcare has worsened
informal sector miseries. Moreover, lack of skills and schooling, jobs at home, micro-entities
has contributed to unregulated working conditions.

The ongoing pandemic has urgently generated the need to develop resilience in the informal
economy. In order to guarantee job security for employees in the informal sector, the
Government must take action. In addition, social security, food security, health and safety
benefits of migrant workers and of any other member of the informal sector must be provided
by the Government. This must be achieved in such a way that the present recession is not
only managed but the informal economy is immune from the adversities of potential shocks.

The researcher conducted personal interviews for collecting data, which helped gain a sense
as to what benefits don the workers in this sector expect. Unorganized workers in the sector
are merely expecting to receive rainy season pension benefits, maternity leave benefits, relief
from injuries, natural mortality allowance, children's higher educational assistance. Central
and state governments should establish unique programmes to help unorganised employees
respond to their individual needs and demands. Government regulations to protect these
people need to be strictly enforced and people who exploit them should be punished if
genuine growth is to be achieved.

SUGGESTIONS
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India must implement substantial legislative and administrative reforms in order to maximise
the effectiveness of its social security policies and services and to ensure their comprehensive
coverage. The following suggestions might be potentially helpful in doing so.

 The word "social protection" should be included in the Act and should be viewed
as a framework for minimal social security and reasonable working conditions
within the country with a broadly defined expectation and guidelines.

 “Given that over the last decade, only about 30 per cent of the budget proposed by
NCEUS has been allocated for social safety programmes, a dedicated social
security fund should be considered in consultation with trade unions with well-
defined budgets and comprehensive financial planning.”

 To prevent leakage and delay, several social security programmes, which allow
funds to be credited directly into the bank accounts of beneficiaries, have been
included in the Direct Benefit Transfer Scheme (2013). However, this programme
has become unsuccessful as large portions of informal workers, in particular
women in low-income households, do not have individual bank accounts. It is
crucial to provide informal workers with financial awareness through organised
education programmes in order to realise the benefits of direct cash transfers. Due
care must also be taken to make sure bank accounts are used.

 “In order to monitor the progress of the schemes and ensure that all the relevant
information concerning their implementation can be available within the public
domain, the Government must use sophisticated monitoring and performance
assessment techniques.”

LIMITATIONS OF THE STUDY

Despite all efforts of the researcher the findings of this research paper are not absolute and
have some inherent limitations. The first limitation is that substantial amount of review of
 P a g e | 49

literature has been carried out and the research relies very much on the available resource of
internet in the form of primary and secondary data. It might not be able to cover all the
aspects involved with the same hampering the holistic approach to come to a finding. The
study has been restricted to secondary data for some of its aspects, for which research papers,
studies, working papers, official sites, organizational data has been used. There may be
certain personal bias of the researcher, which can influence the results of the study.

The researcher had to rely on primary data which was collected through the respondents, this
data could be affected by the personal bias of the respondents. Since this is a time of
pandemic in the country, there were barriers in collecting data that acted as a limitation to the
scope of this study. Collecting data physically was made even more difficult due to the fact
that the world is going through a pandemic, therefore only a limited number of responses
could be collected. The study was conducted by a college student, therefore there were
constraints of time and money to this study.

It was not possible to collect data from throughout the country. The researcher had to restrict
the collection of data to Dehradun only. Therefore, the sample size for analyzing the data was
small which restricted the scope of the study. Also, the study might have been subjected to
Respondents Fatigue, which is a well-documented phenomenon that is likely to occur when
survey participants become tired of the survey task and the long questionnaire, this leads to
the quality of the data they provide to deteriorate. It occurs mainly when survey participants'
attention and motivation drop toward later sections of a questionnaire. Another constraint in
this aspect might be the technical nature of some questions, the researcher provided the
questions in the simplest way possible but some technical terms could just not be excluded.
Some respondents might not be aware of these terms and still fill in the answer, which would
lead to corrupted data. Another limitation to this study is that it does not take the agricultural
industry into account. The agricultural industry too has a number of workers under the
unorganized sector, but due to the constraints of time and other resources, this data could not
be included. Even after all the constraints that limit the scope of the study, sincere efforts
have been put in by the author to make this study relevant.

SAMPLE QUESTIONNAIRE

PART A (MULTIPLE CHOICE QUESTIONS)

 P a g e | 50

1. Gender – Male/ Female/ other

2. Age- 18-24/ 24-30/ 30-40/ 40-50/ 50+

3. Average daily wages- less than 200/ 200-400/ 400-600/ 600-800/800-1000/more than 1000

4.Number of earning members in the family- sole/ 2-3/ 3-4/ 5 or more

5. Number of dependants in the family- none/ 1-2/ 2-4/ 4-6/ 6 or more

6. Are you a freelance daily wage worker? – yes/ non

7. Are you employed in any organisation under the unorganised sector? – yes/ no

PART B (YES/ NO)

1. Are you aware of the existing minimum wages in your state?

2. Are you a beneficiary of any sort of social security scheme under the government?

3. Are you provided any sort of social security by your employer?

4. Are you aware of the benefits of having a “legal employee” status?

5. Are you aware of the new labour codes passed by the government?

6. Did you lose your job during the covid-19 lockdown?

7. Were you forced to migrate due to the covid-19 lockdown?

PART C (Strongly Disagree/ Disagree/ Neutral/ Agree/ Strongly Agree)

1. I feel that I am paid equivalent to the number of hours of work that I put in.

2.I feel that the government has taken steps to uplift the conditions of the unorganised sector
workers.

3. I feel that the new labour codes are a step in the right direction.

4. I feel that the effect of covid-19 lockdown on the workers could have been mitigated had
the government prior steps to uplift the unorganised sector workers.

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