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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 | 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.

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European Journal of Business &

Social Sciences

Available at https://ejbss.org/

ISSN: 2235-767X

Volume 07 Issue 03

March 2019

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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.