Can unions become more relevant by serving the unorganized sector?


A Critical Review of what Labour Unions have achieved in India and the limited supports available to the Unorganized Sector

Image by paradiz o from Pixabay 




October 11, 2019:

Labour Unions Today are in danger of becoming irrelevant. They serve only 3 percent of the work force. Unions have fattened themselves on the cream of the workforce but done little for labour  in the 72 years since 1947.

The Economic Survey of India, released by the Government in July 2019 estimates that the informal work force of India adds up to 93 percent. Labour Activist and JNU Professor Achin Vanaik, in mid-2019 estimated that only 3 percent of India’s work force is unionized and 7 percent of India’s workers organized. That leaves 93 percent in the unorganized sector.

An article written by Prasanna Mohanty,* says, The latest Periodic Labour Force Survey of 2017-18 released in May 2019, gives a glimpse of (the pathetic conditions of the informal worker). It says, ""even among the regular wage/salaried workers in the non-agriculture sector (of the informal sector), 71.1% had no written job contract, 54.2% were not eligible for paid leave and 49.6% were not eligible for any social security benefit.

The ILO Wage Report published in 2018** uses 2011-2012 data. Of an estimated 401 million people), 51.4 percent or 206 million people were self-employed. Of the 195 million wage earners, 62 percent (121 million) were employed as casual wage earners. So the 2011-2012 data that the ILO uses in 2018 tells us that according to them, 81.36 percent of the workforce is unorganized.

Its no wonder that the current Government is looking at ways to curb the hold that unions have on the most lucrative parts of the work force and look at more ways to support unorganized workers. Some states like Kerala have done pioneering work in setting up welfare funds and welfare Board for specific groups starting with Toddy Tappers in 2007.

The National Government finally came up with Welfare Board legislation called the “Pradhan Mantri Shram Yogi Maan Daan Yojana (PMSYMDY): in February 2019 but it fell far short of what other well-funded Welfare Boards offered (like the Construction Workers Welfare Boards which were funded through a cess on contractors and builders over a specified project size. The new PMSYMDY offers a monthly pension of Rs 3,000 (and matches their contributions) to unorganized workers who contribute monthly between Rs 55 (at age 18) to  Rs 200 (at age 40), till the age of sixty, to receive Rs 3,000 monthly (or the amount provided at that time) for life.

So a 29 year old contributing Rs 100 per month for 30 years would cough up Rs 36,000, So if after age 60, he lived another 12 months he would get his money back in theory. Only problem is that unless the pension amount is corrected for inflation, his pension is going to be worth a pittance. Also if he had stopped making payments midway he would have lost all the money he paid till date. (Payment regularity is not common among casual workers who are highly likely to discontinue payments.)

This problem presents an opportunity to smaller and later entrants like the Shramik Vikas Sangathan (SVS) affiliated to the Aam Aadmi Party.  New entrants can be bold and different more readily because they have less to lose.

 SVS has already begun conversations in Kerala at the District Department of Labour level and is consulting K. Biju, IAS, (a former State Labour Commissioner) to explore what can be done to increase supports to informal workers.


Written by Pravin J P Arapurakal, National Executive Member, Shramik Vikas Sangathan (SVS), the Labour Welfare Organization founded by Shri Gopal Rai, that is allied to the Aam Aadmi Party.

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