Unorganized Sector Work in India

The government, in the interim budget has announced Pradhan Mantri Shram-Yogi Maandhan, a pension scheme for workers in the unorganised sector. According to National Sample Survey Organisation (NSSO) survey, 2011- 2012, nearly 90% of the total workforce is in the unorganized sector. 50% of the GDP is accounted for by the unorganised Sector (National Commission for Enterprises in the Unorganized Sector).

The unorganised sector workers suffer from the problems of poverty, low educational status, low productivity , lower wages, poor working conditions, uncertain and seasonal employment, lack of access to sufficient and reliable social security. Under the scheme, an assured monthly pension of Rs. 3000 rupees per month will be provided to workers in the unorganised sector, whose income is up to Rs 15,000 per month, after 60 years of age.

To avail the scheme, workers have to contribute an amount ranging from ₹55 to ₹100 each month, depending on their age, at the time of joining the scheme and equal contribution would be paid by the government. The new pension scheme will run alongside the existing Atal Pension Yojana.



The scheme will be enforced through the Unorganised Workers’ Social Security Act, 2008.

Limitations of the scheme:

1. Targeting beneficiaries is a major challenge as income data to ascertain informal workers earning less than Rs. 15,000 a month is missing.

2. Funds for the scheme would undermine finance for National Social Assistance Programme (NSAP) which is a social security and welfare programme for poor aged persons, widows and disabled persons.

3. Assuring regular monthly worker contribution in the scheme would be a major challenge.

4. Informal sector workers might refrain from voluntarily contributing to the scheme as their salaries are low.

5. The scheme is silent about what happens when an informal sector worker misses a contribution or if an informal sector worker migrates to formal employment.

Conclusion

The Pradhan Mantri Shram-Yogi Maandhan scheme is a proactive step toward alleviating the economic and social insecurities of the largest and most vulnerable section of the economy. Proper effectiveness of the scheme depends on its implementation at grassroots level.