wEINNOVATE

Protecting the vulnerable: Providing social welfare to Informal Sector

workers

Problem Statement (Used as a separating slide, do not count)

90 % of India‟s workforce belongs to Informal Sector. It is said that most of them does not have the social protection; it is expected that they

take their own case. They are usually not secured by any social security protection. It is that part of an economy that is not taxed, monitored by

any form of government, or included in any gross national product (GNP), unlike the formal economy.

The challenge is to provide a comprehensive solution to account for the social welfare of the whole unorganized sector contributing more than

half to the total national products.

Scope of the broad problem:

1. Most of the Indian workforce comes under unorganized category. Uplifting them socially may result in a huge increase in the totally

productivity of the nation.

2. The problem of CHILD LABOUR may be eradicated if we work for a comprehensive social welfare scheme for unorganized sector

labour.

3. Providing better social security may result in decreasing number of Industrial hazards and their impacts on the labourers.

4. Increasing incorporation of technology into governance may result in regulation of the whole unorganized sector , thus avoiding the

increasing exploitation in unorganized sector.

5. Unorganized sector acts as basic input source for most of the other sectors. Boost in its output will enhance the Indian markets which in

turn will attract more FII and FDI, and hence, enhance economic growth . This will create a competitive environment in Indian markets,

which is the key necessity for progress.

6. The informal sector is not formally taxed, so usually entrepreneurs who are liable to pay tax usually evade .

Causes of the problem:

1. Illiteracy & Ignorance( lack of awareness).

2. Ample availability of cheap labour and fewer employment sources to match with.

3. Underestimating self-worth because of having no prior training in their field.

4. Small establishments with dominating employers.

5. Absence of any effective regulatory body at grass-root level to monitor their conditions.

Reasons for selecting a specific cause :

1. No or improper regulation of wages, overtime, leaves lead to exploitation without someone to claim their responsibility.

2. No Health Insurance and safety from any accidental or other hazards.

3. Poorly skilled labour force provide low productivity leading to poor competence and not-so-good economic output.

4. Differences in payment and treatment on gender and age basis.

Intellectuals solve problems, geniuses prevent them.

Albert Einstein

(Used as a separating slide, do not count)

PROPOSED SOLUTION (Used as a separating slide, do not count)

We introduce a comprehensive scheme with the concept of SEVAK (as the name suggests TO SERVE). It will be a committee of people at the

tehsil level to look-after the needs of the unorganized sector workers in that particular tehsil. As we move up, there will be subsequent higher

bodies to smoothly supervise the system, like state and national boards.

The main purpose of this composition is that the exam-qualified members (Graduation as

the minimum qualification and knowledge of relevant Computer Course) can deal with

all the paper and other regulatory work, while the other experienced members will ,out of

his experience, assist the committee in understanding the problems of the workers in a

greater depth ,like pay regulation, relation with employers, treatment from employers, etc.

( IN ADDITION TO THIS MIN 30% OF WOMEN CANDIDATES SHOULD BE

THERE AMONGST THOSE TAKEN FROM EXAM.)

Each SEVAK committee will be provided with a set of computers and an Online Network to work on so that all data is electronically recorded

and can be conveniently transferred to the next level and interchanged among various parallel working SEVAK‟s for effective implementation

of proposed schemes . This will not only help in organizing the Informal sector but will also create jobs for many people who tend to enter

unorganized sector as labour or worker in spite of having educational qualification.

The District Collector will have all the rights to take any suitable action against any member of the SEVAK committee , if any complain is filed

against the same and after a fair investigation found guilty.

Each unorganized sector worker will be provided with a „Wage Book‟- VETAN PUSTAK. This will help in maintaining a proper record of the

working and pay-details of all the workers, which will later be stored on a database and thus will get a comprehensive nation-wide data for all

the workers. This will also ensure a regulation in wages, as well as avoid discrepancy based on region, caste, gender or age. Also, it will be the

Population Density of District

SEVAK Composition

More than 800 20 15 + 5

800 > __ > 300 15 11 + 4

Less than 300 10 7 + 3

SEVAK Committee tasks and duties:

-To ensure that every registered unorganized worker under them should be made aware about his rights.

-To ensure that unorganized sector should not be exploited and is provided with proper working conditions.

-To eradicate discrimination on any basis( age, gender, caste, religion).

-To make workers aware about their work quality in such a way that they help the nation and ultimately themselves, to develop by increasing

productivity.

-To arrange TRAINING CAMPS for those sectors which require prior training and knowledge.

-To ensure women empowerment and equality at local levels.

-To make the workers aware of using their „Wage book‟ properly, and report the SEVAK of any problem in the manner prescribed in the

mechanism.

- To ensure that any person related to unorganized sector in not under 14 years of age.

To accomplish these tasks SEVAK will be given some powers like cancellation of CARD or to inform respective bodies to act according to

law.

duty of the worker to regularly maintain his wage-book with authentic entries ,failing of which will not only result in freeing

SEVAK from his responsibility, but also making him liable from registration-cancellation.

The collected data ( by SEVAK) will be stored electronically in the form a nation-wise database, which will be accessible to all the SEVAKS

throughout the country. This will make the system work faster and more efficiently, as well as transfer/Manipulation/ upgradation /retrieval of

data will become easier.

Each member belonging to the unorganized sector will be given a unique CARD .This will enable a systematic recording and tracking of his

records.

SEVAK committee can also assist the Income Tax department to prevent tax evasion in the unorganized sector through its online system of

complaining .This can help us in keeping a track of sources and extent of tax evasion.

These all the problems we have tried to rectify in our mechanism. The foremost of which is setting of the regulatory bodies. Unlike the earlier

law which dealt with Social Security on a stand alone basis, we have integrated it with the other problems like wage regulation, condition of

workers, etc. Proper involvement of the representatives of the unorganized sector at all levels is also intended to be provided.

No contribution in any financial form from workers is required, just their awareness about their rights and duties, and their proper interaction

with SEVAK and proper filling of Wage Book is required.

We have tried to address all the problems mentioned earlier, in our solution, and synthesize a hierarchical mechanism, with

minimal scopes for corruption. The existing provisions have so far has not been very successful in eradicating the problems. The most

recent acts , significantly “Non-Organized Workers Social Security Act, 2008”, consists of several shortcomings, a few of which are

1. The term „ Social security‟ is ambiguous. It is not properly defined in law.

2. The act proposed setting of regulatory bodies at all levels, which was never effectively implemented.

3. Most of the welfare schemes deals with only BPL unorganized sector workers.

4. Act has a provision for the unorganized sector workers to avail benefits on payment of a certain contribution only, which many fail to do.

5. Law does no deal with issues of employment, its regulation, wages, and condition of workers. It deals with Social Security on a stand alone

basis.

6. No involvement of Trade unions.

7. The unorganized sector limit is set up to maximum 10 people working in a firm, and the Factory acts consideration begins with a minimum

19, so between 10 to 19 there are no provisions and thus a confusing state exists.(The unorganised manufacturing survey had covered

many enterprises larger than the widely accepted cut off point of under 10 workers. At the same time, it is known that the Annual Survey of

Industries (ASI), which uses a different sample frame, fails to capture many enterprises, particularly those employing between 10 and 20

workers). [1]

IMPLEMENTATION

(Used as a separating slide, do not count)

Central Government: The main governing body of the country .

National unorganized Sector Welfare Board (NUSWB) : It consists of the following

members:

1. Union Minister for labour and Employment, Chairman

2. Secretary , Ministry for labour and Employment, Secretary

3. Director, Social Security, Ministry for labour and Employment, Member

4. Director, Industrial Safety and Health, Ministry for labour and Employment,

Member

5. 35 intellectual people with good experience in the field, one from each state,

Members

-The selection of these intellectual people will be done by a panel of 5

members, with the Secretary of PM as its chairperson, and 4 SC judges as members.

State unorganized Sector Welfare Board : ( Same as State Social Security Board ,

unorganized Workers Social Security Act, 2008, chapter IV) [2]

Division: The divisional head will monitor the welfare activities in his division. There

will be a few IT professionals working as Data Manipulators, working parallel for

recording the data of the concerned division electronically for further retrieval.

District : The district Collector( IAS) will look into the functioning of „SEVAKS‟ at

Tehsil level, and will have powers to take any suitable action if complained to.

Tehsil : The actual level of action for the social welfare workers-SEVAK.

SEVAK COMMITTEE:

This committee consists of 13 members at the Tehsil level. Members will be called

„SEVAKs‟ .the composition would be:

1. A State Govt. Gazetted Officer to supervise the functioning of the committee,

Chairman.

2. A person with ample experience in the unorganized sector( to be nominated by the

District Collector),Member

3. 11 Members ( recruited by a professional exam on Tehsil level and with minimum

graduation qualification)

NUSWB

SUSWB

Division Head

SEVAK Committee

District Head

Informal Sector

IT Professionals

Our innovation fully leverages the existing governing system. We have introduces some members and systems in the existing hierarchy to

make it more transparent, corruption free, efficient and down to grass root level so that it deeply impacts.

Newly Introduced systems/ already existing system, used profoundly in our system as:

- 35 intellectual member each from state in NUSWB

- SEVAK committee ( Having 20/ 15/ 10 members of 2 type; one with graduation as minimum qualification and knowledge of relevant

Computer Course other having minimum 30 years of experience) in informal sector according to population density of district.

- Wage Book ( VETAN PUSTAK)

- Card for each worker in unorganized Sector ( Later Stages include Electronic cards for employer, employee, and distributor/ salesman)

- Registration of every worker on an ONLLINE NETWORK

- Training camps for sectors which require more skilled workers, especially for newly recruited ones.

- IT professionals to manipulate and store data for improvement, policy making and retrieval in future.

Implementation Process

Starting from SEVAK, which is the key feature for our social welfare mechanism has certain duties and tasks as mentioned in solution.

Steps in Implementation Process:

• All the people related to unorganized sector should have a card (existing UID card can be an option) having its details and a specific no

to entitle his identity.

• An unorganized sector worker/employee should register himself/herself with his local „SEVAK‟ initially or after issuing of card.

Hereafter SEVAK will deal with all the issues concerned with them.

• Registration will provide him a Wage Book- „VETAN PUSTAK‟, where the employer details and salary details will be mentioned.

• There will be two kinds of employees-

i) Workers on a regular monthly basis, who will pen-down their employer details as well as salary details in it, and if quits his

job in between before the end of the month, he will have to note-down the next employer details with the date of joining and

again the salary details.

ii) Daily wage workers, who will ,on a daily basis write their employer and wage details (or whenever he/she receives wage).

• The workers who don‟t maintain their wage-book will not be the mandatory responsibility of SEVAK‟s, and the SEVAK is free to act in

this matter with his conscious.

• Employer MUST ensure that all employees under him have a CARD. If not followed severe action will be taken against him/her.

• VETAN PUSTAK will contain all the wage details of the workers whether on regular or monthly basis this will help not only help in

wage control but also in equality on any basis.

• The SEVAKs will be spread at the Tehsil level, and will closely monitor the Unorganized sector activities in the area.

• Within a limited period of time SEVAK will intimate the government to organize “Training Camps” for quality management and

productivity improvement by providing both technical and social information related to their sector(s).

• ANY person registered under any SEVAK has the right to inform and complain to the District Collector to take suitable and necessary

actions if he/she fails to fulfill his duties or is himself found guilty in violation of rules and regulations.

• All the data collected by SEVAKs, be it wages, no. of workers, child labour cases,, working hours, cases of exploitation, inequality, etc.,

will be given to the IT professionals on a termly basis.

• These IT professionals will manipulate and send a highly organize data from state to the NUSWB where members will interpret the

statistical data and form policies and acts accordingly.

• Earlier, there had been no regulation from the govt. on payment of taxes when it comes to entrepreneurs related to unorganised sector or

any other person. Our system /solution compels them socially to pay tax. The benefits generated will be for the society and the sector

itself, thus hoping to motivate people to pay their due amount of TAXES. The general benefit of the whole society, in form of

development and facilities, when upholded will compel all defaulters to pay what they need to pay and not what they wish to. Any

common person reserves the right to complain online, to SEVAK on any ground about tax-concerns .

PHASES OF IMPLEMENTATION / FUTURE PROSPECTS

NOTE: These phases can be implemented according to the availability of resources and success of the

scheme.

Policy- Every person of Unorganized

sector will be have a CARD and will

be registered under SEVAK. Workers

will have VETAN PUSTAK.

Achievements- Unorganized sector

heading to become Organized, Wage

control ,Equality in pay and treatment.

Policy- To introduce role of Banks in

Unorganized sector for wages.

Achievements- Better control and

watch on wages.

Policy- Introduction of e-card and e-

machines to keep a record of its

employees and their details.

Achievements- Reduce paper work

(substitute for VETAN PUSTAK) and

the working details of all the workers.

INITIAL PHASE SECONDARY PHASE TERTIARY PHASE

Human resources at each level:

TEHSIL LEVEL

DISTRICT LEVEL

NATIONAL LEVEL

STATE LEVEL

DIVISION LEVEL

10/15/20 SEVAKs ( Qualified with a graduation and experienced)

District Collector( to supervise the work of SEVAKs in the district)

Divisional Head ( to supervise the working of various districts) IT professionals

State unorganized Sector Welfare Board (30 members)

National unorganized Sector Welfare Board (NUSWB) (35+4 members)

Finances :

Total No. of districts in India - 640

Total no. of Tehsils in India - 5451

Average Population Density - 374.7/km2

Average no. of SEVAKs / Tehsil -15

Average no. of Tehsils / District - 8.517

Monthly Salary of a SEVAK(avg.) - INR 15,000

Monthly Office fund / Tehsil - INR 10,000

Initial Establishment cost / District - INR 10,00,000

Annual Expenditure / District - INR 2,40,17,940

National Annual Expenditure - INR 15371481600

Initial Establishment Expenditure - INR 640000000

Share of Unorganized Sector in India‟s GDP – about 50%

India‟s GDP - $ 1.873 Trillion [3, 4]

Sources Of Funding : The entire expenditure is to be waived by different bodies of

the govt. so as there is no accumulated burden on anyone.

The funding structure would be something as –

This way, the entire burden an be efficiently

shared among various bodies of the govt.

Also, it is a established fact that the MLA and MP funds

are often under-utilised and lapsed. They can be uilised here.

50%

20%

10%

10%

10% Central Govt.

State Govt.

MLA Treasure

MP sansad nidhi

Local Bodies

IMPACT (Used as a separating slide, do not count)

Unorganized Sector

Better social &

working life with

social equality

Unorganized sector tending

to become organized

Reduction in Child labour

Improved standard & efficiency

giving better health conditions & better output

Organizing result in

regulating all processes

Providing a safer

childhood and

promising a better future

Improve country’s

GDP. Provides a

local alternative to foreign firms

Maximizing country’s hope and

nurturing a more

contributig generation

-Wage Record -Tax Record

-Work History -Regulation and equality

The solution we suggested, as we believe, will help in providing social

welfare to the Unorganised Sector in a far better way than the existing

system. The main outcomes expected out of our system are:

1.There would actually be regulatory bodies to look after the needs and

regulation issues at various levels for the Unorganised Sector. Also incorporating women will not only raise their proportion in working

person‟s nos., but also will ensure a healthy interaction between the

women workers and SEVAK committee.

2.Any discrepancies in regulation of wages may be reported and

henceforth eradicated and proper work conditions for workers can be

ensured.

3.Inequality in treatment and wages based on any of the grounds like

caste, religion, region , etc. may be eradicated.

4.Proper record of all the working members of the Unorganised Sector

will help in a closer watch on their problems , which will result in having

a better solution plan .

5.More employment will be created not only in form of SEVAK but also

as skilled labours.

6. Introduction of SEVAK will help in enforcement of provisions by

centralized schemes which earlier were difficult to administer.

Apart from these, bettering the social status of Unorganised sector

workers will contribute in the following ways too :

1.Better social conditions will ensure better education to their children, so

they can pursue some professional careers and not forced to follow what

their parents do for a living.

2.Better health facilities will be available to them, and so quality of life

will improve.

3.By providing them proper training, we can increase their employability

as well as the overall productivity of the nation.

4.Better pay will result in less no. of malnutrition cases.

5.Making them more aware and concerned will help improve standard of

living in the country.

Thus, it will have a very wide impact on a lot many social issues/ aspects

connected to not only Unorganised Sector workers, but also to the nation

as a whole. Nation’s Progress

Indian Unorganized Sector Workforce- 90%

Contribution to GDP- 50% [3, 4]

BUT The share of informal sector in total GDP reduced by about 5.48 percentage points in aggregate between

1999-2000 and 2004-05.

Where Y- GDP; K- Capital; L- labour force; A (productivity) is the factor for technology, role of institutions

and other relevant forces which measures how productively capital and labour are used in production

F denotes a functional relationship showing how the level of aggregate economic output, Y, changes with variations in an economy's capital (K)

and labour (L) inputs .

We assume that our Solution has capability to affect all these factors positively and provide a breakthrough for existing problems thus making

the coefficients of K and L are positive; thus, increases in either or both will also increase output.

Furthermore increase in this will not only increase employment but surely will increase their Standard Of Living.

As now each worker is doing his work each efficiently and in a more productive manner FII & FDI will also have interest in hiring Indian

workforce, increase in this will not only increase employment but surely will increase their Standard Of Living.

Since K solely depends upon capital investment which in our case is unorganized sector which now will provide positive outcomes helping

the total outcome to increase significantly.

• TAX EVASIONS:

Over Rs 2,150 crore tax evasion detected by finance ministry through a unique initiative of online monitoring system of suspicious

transactions, named 'Virtual Office„. This is the amount known, actual figure would be much larger.

Since most Tax evasions occurs due to lack of compulsions of any type at grass root level, compulsion for society will act as an powerful way

to curb this problem.

Reduction in evasions will not only help in strengthening country‟s economy but also men., as they will take more active participation national

issues.

• Apart from these benefits introducing SEVAK will improve the budget expenditure efficiency and reduce corruption.

Welfare of unorganized sector will make them feel good and it’s said once

When I feel good, I do good. When I feel bad, I do bad. That’s my religion - ABRAHAM LINCOLN

Y = A f(K,L)

Challenges

And

Mitigation Factors (Used as a separating slide, do not count)

Mitigation factors :

• Educating and training the workers by special training programs.

• Awareness campaign to increase participation of the labour.

• Proving higher profits statically to arrange funds from govt.

• Reducing the burden of expenditure by sharing it among various bodies of govt.

• By proving its effect on economy . Govt. Can draw a net positive balance from

this.

CONCEPT RISK

•A vast majority of them do not have

fixed employer and employee

relationship.

• If operational cost goes high it will lead to poor viability. •Govt. may not show interest in funding this scheme

IMPLEMENTATION RISK

• Use of Modern technology is limited as a

large proportion of these workers is poor,

illiterate and isolated.

• Willingness of the workers to contribute

positively towards social security

schemes.

• The costs involved in employing strategies

may outweigh the benefits obtained by them.

I hope that a day will come when our mind is without fear and the head is held high

LET MY COUNTRY AWAKE – Rabindranath Tagore

REFERENCES

[1] - Report of the Committee on Unorganised Sector Statistics, National Statistical Commission Government of India

February 2012

[2] - The Unorganized Workers Social Security Act, 2008; No. 33 of 2008

[3] - censusindia.gov.in

[4] - databank.worldbank.org

[5] - articles.economictimes.indiatimes.com/2013-08-11/news/41295773_1_due-tax-liabilities-dgcei-central-excise-

intelligence