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How to Protect Workers in the Unorganized Sector?

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The unorganized sector consists of all unregulated private businesses owned by individuals or small firms that sell or produce goods and services on a proprietary or partnership basis and employ few workers. Businesses that are not taxed or regulated by the government and are not included in the government’s Gross National Product (GNP) make up the unorganized sector. The unorganized sector accounts for a large percentage of the economies of emerging nations. Since the 1960s, the unorganized sector has been quickly increasing, providing vital economic possibilities for low-income groups.  

A larger number of migrants can be found in this industry, along with a lower rate of compensation.  As low-wage employees in tea shops, dhabas, small stores, and as personal servants and errand boys children are frequently employed in India’s unorganized sector. The mostly weaker section in the society is exploited in whatever form it may be. The Economic Survey 2018-19 of India shows that 93% of the total workforce in India is from this unorganized sector. According to a current estimate, the total workforce in India is 51 crore and among them, 93 percent i.e. about 47.43 crore people working in the unorganized sector of the country.

Some major steps govt. should take to protect employees of the unorganized sector:

1. Set minimum wages

The goal of minimum wages is to safeguard workers from receiving inequitably low compensation. They help to ensure that everyone gets a fair and equal part of progress’s benefits, as well as a minimum living wage for those who work and need it. Supporting the right to equal compensation for equal work can also be part of a plan to combat poverty and remove inequality, particularly between men and women. Minimum wage laws should not be viewed or executed in isolation. Minimum wage should be understood as a complement to and reinforcement of other social and labor policies to protect labor in the unorganized sector.  

2. Set of working hours and overtime rules:

Because there are no regulations that control working hours in the unorganized sector such as the agriculture industry. Working hours in some unorganized sectors are set between 12 and 15 hours as the majority of workers are uneducated and reliant on the earnings provided by the employer, they are exploited by the employer, who forces them to work longer hours. The working hours should be set according to the working capacity of average labor and if a person works more than 9 hours per day or 48 hours per week, he or she is entitled to get more salary than his or her fixed salary. 

3. Availability of low-cost, low-interest loans:

By offering low-interest loans to workers, which can assist them in starting a small business. If the government gives loans of such small amounts to these laborers at a low-interest rate, then they can earn more wages than their factories where labor was exploited. Having own business, that labor can also employ his family members in that work, due to which some other people who were being exploited can also earn more. This will also increase social welfare because by giving such loans people can start their businesses and also employ people which can reduce unemployment.

4. Maintain a high level of vigilance: 

The Vigilance Agency’s principal goal is to take efforts to prevent corruption and malpractice in every department. The primary function required to do in unorganized factories is that things should be checked whether there is any child labor and also for how long the owner of the factory is getting the labor to work. Complaints with a vigilance perspective against all types of workers are to be investigated.

5. Implementation of strict law enforcement measures: 

Before a large epidemic of sickness, law enforcement should have a plan in place.  Both the central and state governments should take steps to improve the welfare and social security of unorganized sector workers. Increasing public enforcement (such as inspections, penalties, and workers’ access to the courts) can be an effective method for reducing infractions (e.g. increase the number of workers making more than the minimum wage). Enforcement of labor rules can improve efficiency, decreasing market failures, leveling the playing field, lowering work-related injuries, and increasing income distribution.

6. For the lift up their present living conditions: 

India has a population of over one billion people, yet only one-third of them are literate. Some of the country’s most difficult issues are population growth, teacher shortages, book shortages, and basic facility limitations, as well as a lack of public funding to support education expenditures.  

The workers of these uncountable sectors already earn less, so they are unable to spend money on children’s education or nutritious food. In such a situation, if they get free education from the government, then most of these people will be able to study. They should get the basic diet from the government so that they can take essential nutrients, then their health will also be fine. And for these workers, health facilities and medicines should be provided free of cost so that their money can be saved at least from these things.

7. Take action against any Social Discrimination:

The Scheduled Castes and Scheduled Tribes make up around 17% and 9% of India’s population, respectively (according to the 2011 census). Scheduled castes and scheduled tribes are those in the country who are socially, educationally, and economically backward. Due to lack of awareness, sometimes these persons are underpaid in terms of wages. They require special attention to protect their interests and accelerate their socio-economic development. 

Awareness programs should be organized for them by the government so that they can know their rights. The state should pay special attention to the educational and economic needs of the poorer members of society. They should be safeguarded from social injustice and all types of exploitation that they may face in the unorganized field. 


Unorganized employees in India confront a slew of issues, including inadequate salaries, unfair treatment by employers, and terrible living conditions, to name a few. Social security is an essential topic that the government should acknowledge in order to alleviate poverty in the country. Various provisions of the Indian constitution guarantee the rights of unorganized laborers. Unorganized employees should be educated about their health, living conditions, and salaries, and employers should not exploit them in their workplaces.

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Last Updated : 29 Sep, 2021
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