Labour Ministry started registering unorganised workers on the e-SHRAM web portal from 24 August.
Till yesterday (29 November), 98,439,504 workers had been registered. 52.11 per cent women, 61 per cent of all in age group 18-40, 90 per cent registrations with Aadhaar/bank account linkage, and 94.5 per cent registrants reporting income of Rs 10,000 per month or less.
With current run rate of about 15 lakh registrations per day, total registrations are sure to cross 10 crore tomorrow (1 December). A major milestone though about 30 crore more registrations are expected.
Over 80 per cent of total workforce in India earns its livelihood as informal/unorganised workers. Who are these workers? Why does their online registration entail?
Everybody does some work or the other, but here we are concerned with the work done only 'for money'. That would exclude work done for self or family out of love and affection, even if it may involve monetary inducements as added incentive!
The 'workers' may have full-time, part-time or seasonal employment. They may work under a single employer or part-time with multiple employers. They may be freelance workers having no fixed employer or they may be self-employed workers engaged in the value addition chain of producing/selling goods and services.
Workers are categorised as White/Blue/Grey/Pink/Gold collared workforce depending on nature of work. They are also categorised as formal/organised and informal/unorganised workers.
The organised/formal workers typically work for a fixed employer and enjoy the legal protection of working conditions, working hours, workplace safety, leave, medical benefits and social security schemes yielding them lumpsum amount of annuities after they ‘retire’ from work after a certain age. Social security includes government-managed provident fund, pension, Medicare, New Pension Scheme, Employees Provident Fund, Employees Pension Scheme, Employees State Insurance etc.
In Indian context, a formal worker is either a government or governmental autonomous body employee having GPF/CPF/NPS account or a PSU or private employee having an EPFO account.
In October 2014, a 12-digit number Universal Account Number (UAN) was introduced for all EPF subscribers that would remain attached with an individual and not change on change of employer, UAN portability across jobs.
Since EPF system has a large number of multiple EPF account numbers belonging to same individual and also dormant accounts, efforts to de-duplicate the subscriber database based on AADHAAR-UAN linkage are continuing. So exact number of unique EPF subscribers is not known.
The pace of job formalisation can be seen from the following data. During September 2017 – September 2021, as many as 47,124,523 new subscribers joined the Employee Provident Fund (EPF) scheme, 57,005,426 new subscribers joined the Employee State Insurance (ESI) scheme, and 2,954,380 new subscribers joined and contributed in the NPS (New Pension Scheme).
An informal/unorganised worker may be a home-based worker, self-employed worker, or wage worker who doesn’t have GPF/CPF/NPS/EPF/ESIC account, i.e. neither a member of EPFO or ESIC nor a Govt. /semi-Govt. employee.
They have traditionally been substantially left out of financial benefits of social security. Of course, special laws have been enacted for some segments of the informal workers like migrant workers, construction workers, contract workers.
The informal/unorganised workers can be sub-categorised into:
(a) ‘Gig workers’ or ‘platform workers’ who are registered with platforms like taxi drivers with Ola/Uber, delivery boys with food delivery and other e-commerce companies, household services/repairs/sample collection/meter checking staff deployed by companies. These are euphemistically called 'partners'. They are not regular, EPF-subscribing employees of the company.
(b) Self-employed, micro business enterprises run by individual/family, street vendors
(c) Available for hire on casual/seasonal basis like construction workers, agricultural labor, domestic help etc.
Recently, Parliament has enacted 4 Codes on (i) wages (ii) industrial relations (iii) social security and (iv) occupational safety, health and working conditions. These Codes consolidate and supersede 29 central laws. New Codes will enhance the benefits and protections available to informal workers.
Predominance of informal employment has been one of the central features of the labour market scenario in India. A sub-committee of the National Commission for Enterprises in the Unorganised Sector (NCEUS) had estimated the contribution of unorganised sector to GDP to be about 50 per cent (2008) while 92 per cent workforce was informal and 8 per cent formal.
Among the unorganised sector workers, about 65 per cent are engaged in agricultural sector, indicating the prominence of rural segment in the informal economy.
The lack of registration, organisation and protection does not have its origin in the free play of social forces, but it’s the deliberate product of economic interests that benefit from the state of informality in which a wide range of activities in all branches of the economy are kept, systematically and on a large scale, through evasion of labour laws and taxation.
Neo-liberal economic policies have led to widespread informalisation of the formal sector through downsizing, casualisation and contractualisation.
Do we know how many job-seekers are out there? How many employed, unemployed, unemployable, unwilling to be employed? What is the quality of employment? Secure/insecure, casual, seasonal or permanent? Low-paying or well-paying? Full-time/part-time? One employer or multiple employers? How many workers are there? How many informal workers?
In the absence of full enumeration, no one knows exactly how many persons are engaged in work to earn a livelihood. Whatever estimates we have are extrapolated from limited surveys. Economic Survey 2019-20 estimated the number of unorganised workers at about 38 crore.
The challenge before the government in measuring and managing unemployment is enormous. Manual, paper-based data collection is a costly and time-consuming exercise but modern information and communication technology can help cut costs.
Since doing a full census is so very costly and time-consuming, mostly we rely on sample surveys, which may give misleading results, and their sampling design can always be questioned. [Pre-Election Surveys, Opinion Polls and Exit Polls?]
In last 10 years, five surveys have been conducted to gauge the extent of unemployment. Sixty-eighth survey by National Sample Survey Organization (NSSO) during 2011-12, fourth Annual Employment-Unemployment Survey by the Labour Bureau during January 2014 to July 2014, and three Periodic Labour Force Surveys (PLFS) by NSSO during July 2017-June 2018, July 2018-June 2019, July 2019-June 2020.
All the surveyed persons are categorised according to age, educational qualification etc. They are also asked about the number of hours worked and earnings. Notably, the self-employed are included as employed.
For these surveys, some selected households are asked about their principal activity during major part of 365 days preceding the survey; their subsidiary activity on which they spend at least 30 days in 365 days preceding the survey and their activity during last one week.
All those aged 15 years and above and willing to work represents the 'Labour Force'. The level of their engagement in (earning) economic activity is assessed by:
Usual Status (Principal Status) US PS: the economic activity on which they spent relatively long time during 365 days preceding the date of survey.
Usual Status (Subsidiary Status) US-SS: the economic activity on which they spent at least 30 days during preceding one year from the date of survey.
Labour force, or in others words, the ‘economically active’ population, includes both ‘employed’ and ‘unemployed’ persons. Naturally, the ‘employed’ on PS+SS basis includes casual/seasonal workers and self-employed, street vendors etc. This is how ‘unemployment’ has been tracked since 1972-73.
Based on this survey, NSSO has estimated that Labour Force Participation Rate LFPR (percentage of persons either working or seeking or available for work) is 40.1 per cent of total population in July 2019-June 2020. It is up from 37.5 per cent during July 2018-June 2019. Unemployment Rate (the percentage of persons unemployed among the persons in the labour force) is 4.8 per cent, down from 5.8 per cent during July 2018-June 2019.
In simple language, it means that 40.1 per cent of total population was ‘estimated’ to be working or seeking work and out of them 4.8 per cent were unemployed and 95.2 per cent were employed (including self-employed, employed on casual/temporary basis).
So for an estimated population of 130 crore, the Labour force in July 2019-June 2020 would be about 52.1 crore, worker population about 49.6 crore and unemployed population about 2.5 crore.
We may note that 40.1 per cent of total population constituting Labour force [employed or seeking employment] is not an actual count of workers but an extrapolated statistical estimate based on a sample survey. Actual numbers can be different.
We thus see that a precise estimate of number of formal/informal workforce is difficult. We may take 50 crore working with 42 crore in unorganised and 8 crore in organised as a rough estimate.
In this background, we may appreciate that the e-SHRAM portal can be a game changer in making jobs semi-formal and opening new possibilities of growth.
Anyone in the age group 16-59 years who is not covered by EPFO/ESIC or government funded NPS and claims to be an unorganised worker – self-employed or wage employed, full-time, part-time, casual, serving one or more ‘employers’/clients can register on the portal:
A worker can register on the portal using his/her Aadhaar card number and bank account details, apart from filling other necessary details like date of birth, home town, mobile number, and social category.
Registration on e-SHRAM is totally free even at Common Service Centres (CSCs). On registration at e-Shram portal, worker receives a digital e-Shram card. They can get it printed/laminated like AADHAAR card. They can update their profiles through the portal or mobile app. They get a 12 digit unique “Universal Account Number(UAN)” on e-Shram card that will be acceptable across the country.
Every e-SHRAM registered worker is entitled to receive accidental insurance cover - Rs 2 lakh on death or permanent disability and Rs 1 lakh on partial disability during an accident suffered by a registered worker.
They will be able to access the benefits of the various social security schemes through this card anywhere, anytime. They will not be required to register at different places for obtaining social security benefits.
e-SHRAM database is going to be linked to Unnati portal that is another platform to connect job-seekers and employers for blue-collar and grey-collar jobs.
In 2017-18, as per the latest official statistics, India’s informal sector accounted for approximately 52 per cent of its GDP, employing 82 per cent of the total workforce.
Over the last five years, the economy has officially witnessed a significant drive towards formalisation. This push has entailed significant efforts to register firms under relevant laws and obtain PAN/GST registration. However, it is crucial to recognise that firms exist in the informal sector for various reasons and not simply to evade regulations and taxation.
Formalisation is indeed a desirable process both for enterprises and workers in the Indian economy. The final objective of formalisation is to improve the working and living conditions of those in the informal economy.
This is where the policy challenge lies. The ‘formal’ workforce –employees of central and state governments, PSUs, autonomous bodies, private companies – covered by social security like GPF/EPF/NPS/Pension and relatively stronger protection of labour laws on job security is about 15-20 per cent of total workforce. Bulk is ‘informal’ with little security about job continuity and little access to social security.
Governments alone cannot provide jobs in a country of over 130 crore. As on 1 March 1998, there were 3,786,865 central government employees excluding Defence Forces. By 1 March 2019, the number is down to 32,71,113, mainly because of transfer of about 3.5 lakh telecom employees to BSNL. Governments and PSUs have been increasing outsourcing of routine jobs.
The overall effect of technology and business model reorganisation is that there will be job opportunities without long-term assured continuity. Besides outsourcing, there is also a new emerging ‘gig economy’. Digital platforms like Ola/Uber/Zomato/Swiggy/Amazon/Flipkart create additional demand for goods and services and job opportunities for ‘gig workers’.
It is unreal to expect governments to help without proper registration. Let us look for people around us who should have an e-SHRAM card and don’t have one, and help them register online - gig workers, migrant labourers, street vendors, etc.
e-SHRAM offers immense possibilities for informal workers. Government and general public need to focus on:
(a) Fairness of engagement contract through public awareness
(b) Facilitating payment of wages commissions and tips into digital wallets
(c) Spreading a culture of generous tipping for sincere/diligent workers
(d) Reaching out to registered workers during crisis times
(e) e-SHRAM càrds helping in quick registration under various welfare schemes of central and state governments and
(f) Direct Benefit Transfer to AADHAAR linked bank accounts
The harsh reality is that the design and implementation of labour laws have actually deterred employers from offering regular, formal jobs. Hence, it is equally important that government regulations are not too meddlesome and costly and that the job creators retain enough incentives to continue to create more job opportunities.
I would like to sign off with a startling quote from Mahabharata Udyog Parva:
द्वौ अम्भसि निवेष्टव्यौ गले बद्ध्वा दॄढां शिलाम् । धनवन्तम् अदातारम् दरिद्रं च अतपस्विनम् ॥ (The rich who do not donate and the poor who do not want to work should be pushed in deep water with heavy stones tied to their neck) Rather drastic!
This article was originally published as a post on Subhash Pandey's Facebook page and has been reproduced here with permission.
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