Ishan BhatnagarAIR 5 · CSE 2025 · 384 wordsTheir whole copy
Opening · a figure
The informal sector in India employs ~90% of its labour force (ILO). Owing to high penetrability, low skill barrier counterpaced with precarity, it is a distinct source of resilience and vulnerability.
A. Employment Security
Body · points
(i) resilience
1.> Informal sector employs unskilled, semi-skilled workers with less entry & exit costs (Keith Hart) -> broad based level of employment.
2.> Creates opportunity for low capital enterprises MSMEs (Gurcharan Das) -> entrepreneurial revolution, start-up culture, job creation.
3.> Crisis employment sector since it absorbs formal sector layoffs like in 2008 financial
crisis, Covid-19 etc -
(ii) vulnerability
1> Precariat - [Guy Standing] points out that it is characterized by precarity - hire and fire culture, lack of job security.
2> Right of social security - due to dilution of labour laws, inapplicability to informal sector, leads to less safe environment (Sharat Bhaumick).
3> Deficits in Decent Work - [ILO] points out unsafe work environment, low wage, absence of upskilling opportunities.
4> Globalization -> increasing informality, leading to declining bargaining power of Indian labour.
B. Social inequality
(i) Resilience
1.> Allows for social mobility by providing
caste-delinked urban employment, allowing Dalits to escape oppressive rural structures (Jodhka).
2.> Low up-front costs -> allows Dalits, with less access to capital to set up enterprises -> Dalit entrepreneurs (Chandra Bhan).
3.> Startup culture allows women to set up enterprises.
4.> Gendered workspace - majority of informal sector workers are women -> raising female LFPR ~ 40% (PLFS).
(ii) vulnerability
1.> caste-based divisions with "polluting" work like scavenging, leather industries done by Dalits (Omvedt).
2.> skill deficit -> lower paying jobs susceptible to automation to lower caste (Satish Deshpande).
3.> Gendered Impact Utsa Patnaik points out that women comprise lowest paid workers
in skills Labour intensive industries like textile and yarn -> most impacted by global integration. Eg> Korean yarn impacted female weavers in Bihar.
4.> Absence of labour rights and security (Shorat Bhowmick).
5.> Fragmentation of informal sector and non penetration of trade unions -> miserabilization of voices and demands.
6.> Informal workers as footloose labour -> cyclic migrants with limited social prestige, entitlements, exclusion from welfare (Jan Breman).
Close · a way forward
Hence while the informal sector is a buffer and sponge to absorb excess labour, we must go for upskilling and formalization to ensure access to decent work and a living wage.