Informal Sector As an Instrument of Job Creation

The Paper examines the structural functional characteristics of the Informal Sector in India with special reference to Handicrafts in Orissa, Construction Workers in Delhi and Rag-pickers and Recycling Industries in Poona. It analyses the size, capital outlay, mechanization, skill levels, borrowings and labour structure of the Informal Sector in the selected areas of enquiry. It focuses the spotlight on certain inherent weaknesses in the Sector and seeks to discover ways and means of overcoming them. It also examines the kind of infrastructure and institutional support services which the Government, academic & technical institutions, banks and advisory organisations can play in strengthening this sector. It also seeks to take advantage of the inherent resilience of this sector and its low overhead expenses with a view to exploring opportunities for its economic growth. Further, it examines carefully the possible threats to micro-enterprises in the Informal Sector from competition posed by enterprises in the organised sector and seeks to carve out niche areas where these micro-enterprises can have a competitive edge. In this manner, the Paper adopts an integrated approach towards converting a sector with a high incidence of morbidity and mortality amongst its micro-enterprises into a sector which creates “decent jobs” and has the potential of entering the organised sector. The paper attaches critical significance to Appropriate Technology which does not displace labour but reduces drudgery in informal sector enterprises while at the same time enhancing their productivity. The Paper also dwells on possible linkages between the formal and informal sectors which are symbiotic rather than exploitative. In a nutshell, the Paper seeks to make a contribution towards the international debate on job creation.