Home 12 Analysis 12 INFORMAL SECTOR NEEDS FOCUSED SUPPORT
INFORMAL SECTOR NEEDS  FOCUSED SUPPORT

INFORMAL SECTOR NEEDS FOCUSED SUPPORT

Vignesh Jha*

There is an urgent need to tackle informality. For hundreds of millions of work­ers, informality means a lack of social protection, rights at work and decent working conditions, and for enterprises it means low productivity and lack of access to finance.

There is an urgent need to tack­le informality. For hundreds of mil­lions of workers, informality means a lack of social protection, rights at work and decent working conditions, and for enterprises it means low productivity and lack of access to finance.

Globally, two billion people – more than 61% of all employed people – work in the informal economy and 93% the world’s informal employ­ment is in emerging and develop­ing countries.

Globally, two billion people – more than 61% of all employed people – work in the informal economy and 93% the world’s informal employment is in emerging and developing countries. Nearly 81% of all employed persons in India make a living by working in the informal sector, with only 6.5% in the formal sector and 0.8% in the household sector, according to a new ILO report “Women and Men in the Informal Economy – A Statistical Picture (Third edition).

There is an urgent need to tackle informality. For hundreds of millions of work­ers, informality means a lack of social protection, rights at work and decent working conditions, and for enterprises it means low productivity and lack of access to finance.

India’s informal economy is shrinking. That’s the striking discovery made by the Economic Survey 2018 & the greatest reason are lack of research & prior arrangements before imposing various unrealistic ideas, i.e. – demonetization, theory of cashless transaction/ Digital India, GST & lot more.

Cashless economy, digital India and informal sector

India has witnessed a great caustic decision of ‘Central Government’ on 8th November 2016, which has been followed by one more similarly damaging move, i.e. – cashless economy/ Digital India. These decisions have ruined spine of ‘Informal Economy in India’. Usually, those citizen, who don’t have educa­tional & fiscal back-up are part of the informal economy in India.

‘Street Vendors, Rickshaw Pullers, Rag Pickers, Domestic Workers, Landless & Homeless Daily Wage Workers like Construction Workers, Coolies’ hardly own any debit card, credit card or Android based mobile phone to make or ac­cept digital payments. Hence, they first diminished their capital in hand or back-up in the shape of currency and later been bound to compromise with reduced earnings or wages and irregular payments in absence of bank ac­count or means of digital transaction.

After spending fifty-two more or less wage fewer days, the obsession of cashless economy either injured or killed their living and turned out to be the origin of shrink in the informal economy, indicated by the ‘Economic Survey 2018’.

Employment in the informal sector may be defined as all jobs in informal sector enterprises or all persons who are employed in a main or secondary job in at least one informal sector unit during a given reference period.

81% of all employed persons in India make a living by working in the informal sector, with only 6.5% in the formal sector and 0.8% in the household sector.

India’s informal economy is shrinking. That’s the striking discov­ery made by the Economic Survey 2018 & the greatest reason is lack of research & prior arrangements before imposing various unrealistic ideas, i.e. – demonetization, the theory of cashless transaction/ Digital In­dia, GST & a lot more…

After two catastrophic steps, Government has taken one more step chasing additional revenue accumulation on midnight of 1st July 2017 called GST Goods & Services Tax) with a 10% increase in previously proposed slabs. On top of it, there has not been any line of investigation behind the process of fix­ing-up categories & slabs. While a well off pays 18% for purchasing a car, a person, born with a silver spoon pays 25% for purchasing an ‘SUV or Luxury Car; a deprived rickshaw puller or unemployed youth pays 28% GST for purchasing an ‘Electric Rickshaw’ for his bread & butter. Additional fiscal encumber & complexities in tax live out are also amongst reasons of downfall in the number of people, who depends on the informal economy for their livelihood.

While informal sector was look­ing for strategic, administrative, technological & structural sup­port to accommodate millions of citizen, ham-fisted moves of decision makers broke it’s back­bone & converted a large num­ber of natives into laid-off yet again.

*Vignesh Jha is the Secretary General, Federation of Rickshaw Pullers’ Associ­ation (of India), New Delhi India, larg­est organization representing cycle rickshaw and e-rickshaw entrepre­neurs in India, with presence across India.

Global SME News Vol. 12 No. 1 & 2

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