Page 1 of 10
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 03
March 2019
Availableonline:https://ejbss.org/ P a g e | 907
A Study on Share of Unorganized Sector in Economic Development of India
Parneet Rani
Research Scholar in Department of Economics, Maharishi Dayanand University , Rohtak ,
Haryana
Email: parneetpunia87@gmail.com
Mobile – 9671573457
Address: Village-Barota, Post office- Barota,
District –Karnal , Haryana
Pin code- 132001
ABSTRACT: The study is an attempt to analyze the role of unorganized sector in economic
development of India. India is a leading developing country and near about 90 percent of work
force is engaged in unorganized sector. This study explains the features of unorganized sector,
share of unorganized sector in Gross domestic product and share in providing employment. Also
study issues and challenges faced by workers in unorganized sector. This study is based on
secondary and primary data. Secondary data were collected from Census of India (2011-12),
National Sample Survey Rounds, Directorate of Economics and Statistic and primary data related
to issues and challenges faced by workers were collected from construction and agricultural
workers. Unorganized sector provides work to unskilled and semiskilled workers and helping
them to improve their standard of living.
Key words: Unorganized Sector, Issues and Challenges, employment, unskilled workers, GDP
share.
INTRODUCTION: The unorganized sector plays significant role in the economic development
of a country. In developing countries 1/3rd of the national income comes from informal sector.
Unorganized sector provides employment more than organized sector and helping in reducing
unemployment. Nine out of the ten individuals are engaged in unorganized sector. Some
entrepreneur of this sector earns more than organized employees in our country, like vegetable
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European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 03
March 2019
Availableonline:https://ejbss.org/ P a g e | 908
vendors, brokers, agents etc. most of the people in our country earn a livelihood by working for
an income. They work for one or many employer or as contract workers or as self employed,
home based workers etc. in every sector.
According to ILO Indian Labor Market update (2016) and NSSO data (2011) more than 90
percent of the employment in the agricultural sector and close to 70 percent in the non- agricultural sector falls under the informal sector. This sector may not contribute much to the
national income but it is dominance in employment. Now days this sector shows improvement in
productivity, real wages, employment and capital accumulation. According to a report of
International Journal of Management Studies and Research (IJMSR) the informal sector providing
employment to a large segment of the working force and contributes to the NDP (national
domestic product) over 60%. In a report International Labor Organization published that near
about 81% of all employed persons in India make a living by working in unorganized sector with
only 65% in the organized sector and 0.8 % in the house hold sector. Among the five south Asian
countries, informalisation of workers is highest in India and Nepal (90.7%), with Bangladesh
(48.9%), Sri Lanka (60.6%) and Pakistan (77.6%) doing much better on this front. Formal
employment in Bangladesh is highest in the region at 13.5%. Bangladesh also has high household
employment at 26.7%.94%of the agricultural employment is informal in the Asian pacific region
and it is highest in southern Asia (99.3%) which includes India. This data is followed by
industrial sector (68.8%) and (54.1%) employment is informal in service sector. Globally:
Agriculture is the sector with the highest informal employment (93.6%) around the world
followed by industry sector (57.2%) and service sector (47.2%).Women workers in India: 94% of
total women workers are employed in the unorganized sector, most of them works as agricultural
workers, construction labor and domestic helper. Reason behind women enter in unorganized
sector is: it refers less skill. But there is a lack of recognition of the role of women in both their
home and at work.
Objectives of the study:
I. To analyze importance of unorganized sector in economic development.
Page 3 of 10
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 07 Issue 03
March 2019
Availableonline:https://ejbss.org/ P a g e | 909
II. To study issues and challenges faced by workers in unorganized sector.
RESEARCH METHODOLOGY:
Data is collected form secondary and primary source. First objective is based on secondary data
collected from various census reports, Analytical of Haryana, articles, research papers and various
journals. Data for second objective collected through interview schedule in Karnal district,
Haryana.
REVIEW OF LITRATURE:
This chapter analyzes views and main finding of researchers on the role of unorganized sector in
economic development. The study of related literatures implies reading and evaluating reports of
observation and opinions that are related to the individual’s planned research work.Samir Saran
and Vivan Sharan (2018) conducted a study on the future of the Indian workforce: A new
approach for new economy. According to the researcher most of the Indian workers are young,
under skilled and largely informal. This is a unique thing in itself. They said a new approach is
required to address new challenges related to the future of Indian workforce and improving both
quantitative and qualitative benchmarks by which future “work” itself is measured. A holistic
approach must be adopted by India. Country cannot afford less at this critical stage in its
development path.Indian labor and employment report (2014) showed the working condition of
labor market in India. This report has give a complete analysis of the trends in labor market and
employment since the inception of economic reforms. It explains the dynamics of these changes
through labor market institutions, different types of employment and market policies. According
to report 92% of workforce is engaged in the informal sector and a large majority of them have
earn low wage with limited social protection. In unorganized sector level of education of workers
is very low, they are unskilled or semiskilled.
