The unorganised sector workforce is growing with the process of restructuring of the Indian economy.  Labour market flexibility is being gradually adopted by the employers. Contractualisation, casualisation, de-regularisation and outsourcing of various jobs make the unorganised sector more prominent and it requires to be protected.  The government after consultations with various interest groups has prepared a draft umbrella legislation.  However, the proposed law to protect the interests of the unorganised workforce is not getting through. It is true that trade unions, NGOs, intellectuals and even employers have raised theoretical and political questions and objections.  But this is not the cause of delay.  The reality remains behind the curtain. 

A Reluctant Ministry

The Ministry of Labour proposes the legislation but it is the Finance Ministry, which does not want to approve it for the reason that the proposed law will cost around Rs 25,000 crore. The Finance Ministry considers this expenditure as economically unproductive.  Such a huge expenditure does not find acceptance with the economic planning of the government.  The state governments are also reluctant to incur such huge expenditure for social security and welfare of unorganised sector workers. 

The hidden reluctance of Finance Ministry of the central government and also the state governments is the main cause of delay in enacting an umbrella legislation for unorganised workers.  The government has adopted unethical tactics by referring the proposed legislation from one committee to the other. The government wants various interest groups to continuously clash among themselves and raise objections. This would make it easy for the government to postpone the legislation. 

Bill Referred Again

The Bill is again referred to a committee, this time the National Commission for Enterprises in the Unorganised Sector. The terms of reference of the Commission include review of the status of unorganised or informal sector in India including the nature of enterprises, their size, spread and scope and magnitude of employment, and identifying constraints faced by small enterprises with regard to freedom of carrying out the enterprise, access to raw materials, finance, skills, entrepreneurship development, infrastructure, technology and markets besides suggesting measures to provide institutional support and linkages to facilitate easy access to them.

The Commission has also been asked to suggest the legal and policy environment that should govern the informal/unorganised sector for growth, employment, exports and promotion besides examining the range of existing programmes that relate to employment generation in the sector while suggesting improvement for their redesign. Identifying innovative legal and financial instruments to promote the growth of the informal sector and reviewing the existing arrangements for estimating employment and unemployment in the informal sector and examining why the rate of growth in employment has stagnated in the 1990s are also in its purview. It will also suggest elements of an employment strategy focussing on the informal sector, review Indian labour laws, consistent with labour rights and with the requirements of expanding growth of industry and services, particularly in the informal sector. Reviewing the social security system available for labour in the informal sector and making recommendations for expanding their coverage are also part of the Commission’s job.

The inappropriate action of the government smacks of foul play. The reference relating to workers in the informal sector by the Ministry of Small Scale Industry is without propriety. Only the Labour Ministry can make such a reference. It is a move, which is only intended to delay the much-awaited law.