Why Subscribe ?

Popularise CC

Join News Letter


Face Book

Editor's Picks

Press Releases

Action Alert

Feed Burner

Read CC In Your
Own Language

India Burning

Mumbai Terror

Financial Crisis


AfPak War

Peak Oil

Alternative Energy

Climate Change

US Imperialism

US Elections


Latin America










Book Review

Gujarat Pogrom



India Elections



Submission Policy

About CC


Fair Use Notice

Contact Us

Search Our Archive


Our Site


Subscribe To Our
News Letter

Name: E-mail:

Printer Friendly Version

Unorganised Sector In Globalisation Phase

By T.Venkateshwarlu

24 June, 2010

In India 90% of the workers are engaged in the unorganized sector which doesn't provide social security and other benefits of organized sector. Most of them are engaged in agriculture in rural areas and contract, sub-contract, daily labour and migrated agriculture labour in urban areas. Casual, temporary and contract workers in the public sector those who hired through the mediation labour contractor or agency also come into unorganized sector. Construction workers and other unorganized workers in agriculture and segments like street vending, rice mill, forest, handloom and power loom, fishing, gem-cutting and sugarcane-cutting face unprotected work with no guarantee of employment. They work for low wages without medical and any other benefits. Unorganized sector also referred as informal sector. The situation of unorganized workers has not improved since Independence.

In the unorganized sector there are no health and safety conditions, proper working hours, basic amenities like toilets and creches for children's. Violating their rights is very common thing. In work place dangers are very familiar to the workers. Most of the accidents are the result of the owners profit motive rather than concern on workers life. Particularly these types of tragedies are increasing in the globalization era. In this sector usually factory Acts did not implement and the governments did take serious measures to punish the culprit owners and helped the victimized workers families. The rulers of the government called to the people to sacrifice for the country development in the time of New Economic Policies initiation. So rulers may keep salient on workers deaths and their hazard conditions in work place for sake of the country development and GDP growth rate.

Table-1: Estimates of Employment in Informal Sector

SI. No.


Estimated Number of Workers (Million)







































All India













NSS 55th round survey (July 1999 to June 2000)

In the phase of globalization of capital most of the labour legislation are deliberately excluding. For example Factory Act 1948 which covers working conditions, health and safety, basic amenities like toilet, prohibition of child labour and night work for women and much more does not apply to the unorganized workers. Similarly the Employees State Insurance Act 1948 which is providing accident compensation, sickness and maternity benefits are not applying in the work places twenty workers without power. With this provision the owner splitting up an establishment into the small units which supposedly independent of each other and creating artificial breaks in employment to escape workers permanent issue.

Most of the companies including government departments employing large number of contract workers (on site) who are deemed to employees of the labour contractors or agencies and therefore they do not appear on the payroll of the company or sub contracting the production to the smaller work places. The Payment of Bonus Act, 1965, Employees Provident Fund and Miscellaneous Act 1972 and Payment of Gratuity Act 1972 are not applying in the unorganized sector or informal sector. The Trade Union Act, 1926 and Minimum Wages Act, 1948 are in principle applicable to the all workers but the worker of the unorganized did not accessing that constitutional rights. The courts are also proactively intervening and making judgments s on labours rights and safeguarding the interests of the capitalists. This is the new phenomena which emerged in the era of globalization.

The unorganized workers have no employment status at any second they can be dismissed without cause. The worker employment simply depend the wish and will of the owners and organizing and demanding the stable livelihoods leads to their dismissal. In some cases they punished to death. In 1994 Dalits in Jahanabad District of Bihar tried organize and till the surplus lands and government lands the upper caste landlords formed Ranavir Sena and killed 68 Dalit agriculture labours. In the case of Shankar Guha Niyogi who is the one of the great creative leader in India who build the workers movement on struggle and construct basis only in a democratic method. He is the first trade union leader come forward to take responsibilities along with workers rights in the industries and create good people institutions. He was murdered by company owners hired killer gangs in 1991 when he tried to organize workers in the new industrial areas of the Raipur District.

The new economic policies cause to the collapse of the rural economies which provide employment to the 70% of the population in the country. Agriculture got in serious crisis and it becoming burden to the small and middle farmers because of rapid industrialisation, decreasing subsidies and lifting protection measures the same caused to death blow to the artisan's activities. Crores of the agriculture labours and artisans are migrating from the villages for searching livelihoods in the urban areas. The present Mahatma Gandhi Rural Employment Guarantee Scheme (MREGS) is partially compensating on temporarily.

The globalization causes to the many hazards, closures and large-scale retrenchments are taking place. Contract and apprentice systems of employment have also increased in the organized sector. Machines for digging ponds, ready mix concrete for roof, machines for laying and even sweeping of roads, foreign vessels in trawling, transplanting and harvesting machines in agriculture have led to a drastic decrease in rural and urban employment in the unorganized sector. The life and livelihood become central issue for not only to the organized sector workers but more so with unorganized workers, since the retrenchments are invisible and no compensation is providing. In the era of globalization the rate of growth in employment drastically declined drastically from 2.04% to per year in the period 1983 -1994 to 0.98% in 1994 to 2000.

The collapse of the rural and urban small and medium scale economies the workers are losing the old and traditional livelihoods and in the same speed they are not getting new opportunities which require new type of skills and also formal education. Lack of this they are not getting jobs. Livelihoods opportunities are less but job seekers are in huge number. Competition is growing rapidly the owners are using this opportunity for their profit motto. They are giving very less wages and without any benefits. Because of this situation most of the people are depending on small scale business which required very low investment and gives less and uncertain income to them. These entrepreneurs are facing lot of problems. Bank loans or various self employment schemes are not accessible to them so inevitably they are depending on money lenders for their investments. Recognized portion of their income is appropriating by the money lenders.

The globalization and the New Economic Policies (NEP) have completed its 2 decades journey. In the name of NEP the rulers implementing liberalizing the restrictions on capital flow to every sector, privatizing the public sector organizations for capitalists and participating in the process of globalization. In the beginning of the phase the rulers proclaimed that this process gives lot of employment opportunities, quality services and nation development. Recent financial crisis proved again that liberalizing market or capital from restrictions create lot of problems. Due to the recent crisis lakhs of crores lost and crores people lost their livelihoods. This not the peculiar thing to the capitalist system it is the inbuilt logic of capital. Surplus created by collectively by workers but the whole surplus appropriation done by individual capitalists. The capitalists are always tries to increase more and more profit; in this process they never consider human values like justice, equality, concern towards the human beings and equity even they tries violet or escape from the regulations. It always leads to continuous crises as long as the capitalist system exists in the universe.

Rulers painted a beautiful picture about the new economic policies and globalization and also declared that it is the only one way to lead the nation towards the development. It is not true in the people side but it 100% true in industrialist side. The process increased lot of wealth in the 2 decades. But in actual the results are not satisfactory. In one side new opportunities are growing in private sector at a small scale but other sides crores of people are losing their employment opportunities with the collapse of the rural economies and above 3 lakhs industries closing by the new economic policies. In the process of the globalization the economic reforms may given boost to the industrial productivity and brought in capital intensive areas but the boom has not created jobs. World top 200 MNCs accumulated wealth is bigger than world largest 9 countries GDP but its employment generation is 1% in total global work force. The reforms are diluting the standards of the workers and assaulting on workers' rights.

The services availability increased at very large scale. New sector rapidly emerged and production increased at several times but these services are accessible to the people those who only who pay money rest of the people have no chance to get the services. Basic needs like health and education are not accessible to the people because of new economic policies. In the history the cruel kings also fell shamed to privatize water resources but the present are very concern in privatizing all sectors including water. Before NEP implementation the government did services to the people by providing employment opportunities, making various services accessible to the people but after the implementation of NEP the government role drastically changed. Now the government is very busy in providing all support to the industrialists, collecting taxes from people and suppressing people's movements which waged against injustices and rights violations. The government just becomes commission agent to the industrialists.

The trade unions are unable to resist the unprecedented flow of NEP implementation and also not capable or concern to save and develop the public sectors to access to the people in giving good quality and timely services. The trade unions success in waging struggles against the anti people policies so the rulers are decreasing the speed of policies implementation. Mostly these trade unions neglect to organize the workers of unorganized sector those who are receiving major attacks of the NEP. Most of the time the unions are opposing the policies but they are not able to build the models at small scale which they are projecting. They have no redesign and re articulated project which has to evolve from emerging new conditions at national and international level in 21 st century and experiences of history of movements.

The workers collectives should be built on the basis of equality, justice and equity which ensure common welfare to the workers. Workers from rural or urban have to learn new skills. It is the essential thing to their livelihoods. The workers collectives have to focus on this issue. The government has to take up this responsibility to train them and provide employment opportunities. These collectives are most essential and important thing along waging continuous struggles against New Economic Policies and globalization. Working class have got no single right without hundreds of struggles in history, workers particularly unorganized workers have to organize themselves and wage prolonged struggles along in participating model building. This is the only one way to the workers of the unorganized sector to protect their rights, life and livelihoods.


Baghlingamplly, Hyderabad, AP, India