Schemes For Unorganized Sector

Similar to the organized sector the unorganized sector also plays an equally important role in the economic growth of the nation. But people working in these unorganized sectors are very often recognized for their work and also don’t get fixed wages. But the GOI is making significant efforts to uplift this sector and help them via different policies. The people engaged in unorganized sectors contributes equally to the development and growth of India. The contribution of the unorganized sector is more than 50% of the total GDP of India. According to an economic survey conducted in 2019, there are around 41.85 crore people working under unorganized sectors in India. There are 7 major unorganized sectors in India among which the agricultural sector is on the top, followed by the manufacturing sector.

What is an Unorganized sector?

An unorganized sector is a sector where employment and wages are not regulated by the government rules. This sector mostly consists of people working in small home-based industries, fishermen, handloom workers, weavers, plantation labourers, toddy tappers, beedi workers (plant leave-based cigarette manufacturers), leather workers, etc. The people working in this sector usually earn a significantly low income and don’t get any kind of social or medical leaves. Also, they aren’t benefited from medical insurance or provident funds.

Some of the Most Popular Policies launched by the GOI for the Unorganized Sector:

• National Pension Scheme

The National Pension Scheme was introduced in 2004 under the Social security act for unorganized workers. The primary motive of this scheme is to provide social security to self-employed people and workers in their old age. Shopkeepers, self-employed people, workers, and traders who are registered under EPFO/ESIC with ages 18 to 40 years are benefitted from this scheme. Under this scheme, beneficiaries get a monthly pension from the government after retirement.

• Aam Aadmi Bima Yojana

The Aam Aadmi Bima Yojana was launched by GOI to support the people below the poverty line or above poverty with a marginal difference. The scheme was launched in 2007 to help vocational groups of people residing in rural areas of India. It includes rickshaw pullers, lady tailors, fishermen, primary milk producers, brick kiln workers, forest workers, etc. The beneficiary falling under this scheme can claim insurance from the respective nodal agency in case of partial or complete impairment, or death in an accident.

• Pradhan Mantri Shram Yogi Maandhan Yojana

The Pradhan Mantri Shram Yogi Maandhan Yojana (PMSMY) was launched by the Ministry of Labour and Employment in 2019 to provide social security to the unorganized workers and traders, which are not eligible taxpayers. People falling under this category must have ages between 18 to 40 years with a salary of not more than INR 15,000 to be eligible for this scheme. Under this scheme, the beneficiaries are awarded an assured pension amount of INR 3,000/Month.

• Central Sector Scheme For Rehabilitation Of Bonded Labourer, 2016

The rehabilitation scheme for bonded laborers was introduced in India in 1975 where both the state and central governments bear 50%-50% amount required for the Rehabilitation Of Bonded Labourer. However, identifying and rescuing the bonded laborers was the duty of the state government. But since then many changes have been made to this scheme and in 2016 it came into existence as the central sector scheme for Rehabilitation of Bonded Labourer. Now the Ministry of labor and employment looks after this scheme and provides 4.5 lacs to each district for rehabilitation purposes. 

• Pradhan Mantri Rojgar Protsahan Yojana

The Government of India launched Pradhan Mantri Rojgar Protsahan Yojana in 2018 intending to uplift unskilled and semi-skilled workers by creating employment opportunities for them. Under this scheme, GOI pays incentives to the employer and thus contributes around 12% to the EPFO of these workers. However, there are some conditions that a worker needs to meet to get eligible under this scheme like the employee must hold a UAN (Universal Account Number). Also, the employee must remain employed by the same employer for at least 3 years.

• Atal Pension Yojana

The GOI launched the Atal Pension Yojana in 2015 intending to provide social security to the people working in the private or unorganized sectors. Anyone who’s working in this sector from age 18 to 40 years can claim the pension after retirement. The beneficiary must hold a bank account linked to the Aadhaar card. The pension amount can be decided by the beneficiary whether he needs it on monthly basis or together after his death. In case the beneficiary opts to get the amount after his death then that amount will be awarded to his nominee. 

• Garib Kalyan Rojgar Yojana

The government of India launched the Garib Kalyan Rojgar Yojana in June 2020, to help the migrant laborers affected due to the COVID-19 pandemic. A fund of INR 50,000 crore was declared to generate employment opportunities for these migrant laborers. Under this policy 25 working areas were selected by the government like goat sheds, cattle sheds, poultry, PM Kusum works, workers on the national highway, etc. Under this scheme, the beneficiaries get employment for 125 days.

• Rashtriya Swasthya Bima Yojana

The Rashtriya Swasthya Bima Yojana was started in 2008 by the government of India to provide socio-economic security to the workers working in unorganized sectors and falling Below Poverty Line (BPL). The beneficiary under this policy can enroll in health insurance along with his 5 family members. 75% of the amount is paid by the central government while 25% is paid by the state government under this policy, and the beneficiary only needs to pay a sum of Rs. 30/annum. The insurance sum is Rs. 30,000/annum for each family member that is enrolled under this policy. The insurance amount covers all medical expenses of current or previous illness.