FORMALISATION OF THE INFORMAL LABOUR FORCE: CASE OF THE BENGALURU METROPOLITAN REGION

Abstract:

The Indian economy is largely informal based with 15 to 20 percent contribution to the Gross Domestic Product (GDP). Informal sector workers provide crucial support for the smooth functioning of the formal sector. Most of the informal workers face precarious challenges due to non-contractual nature of the job, lack of social security, job dismissals and low wages. The volatility of the economy, along with poor monetary savings, risks their daily survival. Government of India has implemented various schemes to formalise the informal sector and safeguard their interest. It necessitates the need to critically evaluate the process and efforts towards the formalisation of the informal labour force. The chapter aims at analysing the contribution of the informal labour force in the Indian economy. To achieve the aim, the objectives are to comprehend the characteristics of informal workers, assess the contribution of informal workforce in Indian economy, analyze the measures initiated to formalize the informal sector and to recommend strategies for implementation of formalization measures by government. An extensive literature review of documents i.e. magazine (Down to Earth) and news reports from Business Standard, New Indian Express, etc. was carried out. The secondary data sources have been obtained from Census of India, Government of India, the International Labour Organization (ILO), the International Monetary Fund (IMF), Women in Informal Employment: Globalizing and Organizing (WIEGO), etc.  Bengaluru Metropolitan Region (BMR) has been chosen as a case to analyse the contribution of informal labour force in the region. It is the fifth largest metropolitan region in terms of area (8,005 km²) and population (13, 193, 1000).The data reveals that informal sector workers’ contribution has been significant towards the expansion of Information Technology (IT) sector. Despite providing employment to millions of workers in India, its contribution is less in the Indian economy. The significance accorded to informal sector in Bengaluru need to be revisited.Government of India (GoI) has launched multiple schemes such as the e-Shram portal, Udyam portal, etc. These schemes aim to encourage the informal workforce to shift towards the formal sector. The increased registrations of informal workers depict the success of the schemes. There are crucial lessons to learn from the process. It is challenging to formalise the informal sector due to the existence of structural issues. Such issues need to be addressed for the smooth transition of informal sector workers to formal sector. Their skill enhancement is necessary to be an integral part of the formal sector as well as for their shift towards formalisation.