Hindu Editorial Analysis : 12-July-2024
The unorganised non-agriculture sector, also known as the informal sector, plays a vital role in India’s economy. This sector includes various activities that operate outside formal regulations, such as street vending, household services, and small-scale manufacturing. Understanding its significance in value creation and employment generation is crucial for recognizing its impact on the economy.
Key Contributions
Economic Value
- Gross Value Added (GVA): In the fiscal year 2022-23, this sector contributed 44.25% of India’s total GVA. This figure highlights its importance in the overall economy.
Employment Generation
- Workforce Participation: Approximately 74.3% of India’s workforce is employed in the unorganised sector. These workers are essential for many economic activities, even if their contributions often go unrecognized.
Trends in the Sector
Shift Towards Services
Over the last decade, India has transitioned from a manufacturing-based economy to a service-oriented one. This shift is evident in the unorganised sector:
- Service Dominance: ‘Other Services’ now represent 38% of establishments, while Trade accounts for 35% and Manufacturing 27%.
Rural Influence
- Establishment Growth: The number of unorganised establishments grew from 6.36 crore in 2015-16 to 6.5 crore in 2022-23.
- Rural Establishments: Rural areas contribute significantly, constituting 55% of total establishments.
Challenges Faced
Lack of Formalisation
- Many workers operate without formal contracts or social security, making them vulnerable to exploitation.
Job Insecurity
- Employment is often precarious, leading to irregular incomes and uncertainty.
Low Productivity
- The sector experiences lower productivity due to outdated technology and limited skills.
Limited Access to Credit
- Small enterprises struggle to obtain financing, hindering growth and modernization.
Gender Disparities
- Women face additional challenges, including unequal pay and balancing household responsibilities.
Health and Safety Risks
- Jobs in this sector often involve hazardous conditions, with inadequate safety measures.
Government Initiatives
To support the unorganised sector, the government has introduced several programs:
- MGNREGA: Provides guaranteed wage employment in rural areas.
- PMSYM: Offers pension benefits to unorganised workers.
- e-Shram Portal: A national database for unorganised workers to access welfare information.
- Expansion of ESI Scheme: Extends health and social security benefits to more workers.
Why In News
The unorganised non-agriculture sector is crucial for understanding its performance in value creation and employment generation, as it significantly influences both the economy and the livelihoods of millions of workers across India.
MCQs about The Unorganised Non-Agriculture Sector in India
- What percentage of India’s total workforce is employed in the unorganised non-agriculture sector?
A. 44.25%
B. 35%
C. 74.3%
D. 55%
- Which segment currently constitutes the largest share of establishments in the unorganised non-agriculture sector?
A. Manufacturing
B. Trade
C. Other Services
D. Agriculture
- What is a major challenge faced by workers in the unorganised non-agriculture sector?
A. High wages
B. Job security
C. Formal employment contracts
D. Access to advanced technology
- Which government initiative aims to provide social security benefits to unorganised workers?
A. MGNREGA
B. e-Shram Portal
C. PMSYM
D. Employees’ State Insurance Scheme
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