India’s 400-Million Casual Labour Market Needs a Structural Shift: ISF

India’s 400-Million Casual Labour Market Needs a Structural Shift: ISF

Sub: Economy

Sec: Inflation and Unemployment

Tags: Casual labour 

Overview: India’s informal labour market, comprising approximately 400 million workers, plays a crucial role in the country’s economy.

The Indian Staffing Federation (ISF), representing the contract staffing industry, has emphasized the need for a structural shift towards formal employment to ensure equitable opportunities and sustainable livelihoods.

Current Scenario:

• Informal Labour Force: Almost 85% of India’s workforce is employed in the informal sector.
• Economic Contribution: This segment generates more than half of the country’s GDP.
• Challenges: The informal sector faces significant issues such as income inequality, lack of job security, and rising poverty levels.

ISF’s Perspective:

• Need for Formalization: ISF Executive Director Suchita Dutta highlights the critical need for formalizing the informal labour market. Formal employment can provide better job security, income stability, and access to social benefits.
• Income Inequality: The disparity in income and the associated poverty levels are stark reminders of the systemic challenges faced by the informal workforce.
• Blueprint for Change: ISF has unveiled a blueprint aimed at formalizing the informal workforce and implementing labour codes to protect workers’ rights and improve working conditions.

Key Recommendations:

• Formal Employment Opportunities:
• Transitioning workers from informal to formal employment sectors.
• Providing structured employment opportunities to lower-income and semi-skilled workers.
• Implementation of Labour Codes:
• Ensuring the effective implementation of new labour codes to protect workers’ rights.
• Facilitating better working conditions, social security, and fair wages.
• Inclusive Growth:
• Creating an inclusive labour market that invites participation from all sections of society.
• Ensuring equitable opportunities and sustainable livelihoods.
• Economic and Social Security:
• Enhancing the economic security of workers through stable employment.
• Providing social security benefits like health insurance, pensions, and unemployment benefits.

Benefits of Formalization:

• Economic Stability: Formal employment can lead to more predictable and stable income for workers, contributing to overall economic stability.
• Social Security: Access to social security benefits can significantly improve the quality of life for workers and their families.
• Skill Development: Formal employment often comes with opportunities for skill development and career advancement.
• Government Revenue: Formal employment increases tax revenues for the government, enabling better public services and infrastructure development.

Challenges to Formalization:

• Regulatory Hurdles: Implementing new labour codes and ensuring compliance can be challenging.
• Employer Resistance: Some employers may resist formalizing their workforce due to perceived higher costs.
• Awareness and Education: Workers need to be made aware of the benefits of formal employment and trained to meet the requirements of formal jobs.

Conclusion: The ISF’s call for a structural shift towards formal employment is a significant step towards addressing the challenges faced by India’s informal labour market. By implementing comprehensive labour codes and creating formal employment opportunities, India can ensure equitable opportunities and sustainable livelihoods for all workers. This shift is essential for reducing income inequality, alleviating poverty, and fostering inclusive economic growth.