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Thursday, January 21, 2021

Investing in informal workforce

Informal sector holds the key to Indian economy’s revival post-Covid. Government must have plans in place to help them prosper

Written by Shakti Sinha , Madhav Pai | June 29, 2020 11:20:00 pm
A health worker removes her PPE Kit while people wait in queue for a Covid-19 test, in New Delhi. (Express Photo: Praveen Khanna)

With the novel coronavirus infection numbers rising uncontrollably, and the economy in the doldrums following the extended lockdown, India’s path to recovery seems daunting. Global reports in May estimated a contraction of at least 5-7 per cent in India’s economy in 2020-2021, and predicted nearly 135 million job losses, pushing about 120 million people into poverty.

This predicament has been intensified by the reverse migration of lakhs of workers, who formed the spine of India’s workforce. In the face of a spreading contagion and a lockdown that rendered them jobless, homeless and hungry, their desperate measures to return from their cities of employment to their villages homes, led not just to a humanitarian crisis but also unanticipated economic insecurity.

To date, the lack of estimates of the informal workforce means a vacuum in understanding the depth, complexity and distribution of migrant workers in urban India, as well as our dependence on them. Data has been varied and often conflicting. The Chief Labour Commissioner had estimated that 26 lakh migrants were stranded across the country, of whom 10 per cent were in relief camps, 43 per cent on worksites and 46 per cent in other clusters. However, the Solicitor General informed the Supreme Court that 97 lakh people were transported back home.

Now, as the “new normal” sets in, and the people are faced with the prospect of earning a living in a battered economy, while simultaneously fighting a life-threatening pandemic, cities will become even more important for their livelihoods. A dearth in employment opportunities and the lack of alternatives will force the rural population to return to cities, even if working conditions are sub-par and dwelling, dismal.

On the other side of the spectrum, the reality that the living standards of millions of affluent urban residents are dependent on these informal workers who take up jobs at our homes, and act as essential service providers, has just dawned upon us. Not just households, the benefits of their services are reaped by commercial businesses, factories, real-estate, institutions and almost every sector that contributes to the economic growth of the nation. Ironically, the livelihoods of these workers themselves are uncertain at the best of times. To revive and revitalise the economy, policy-makers must factor in the livelihoods of this informal workforce, who play a major role in urban renewal and growth strategies. They should be duly covered by a safety net that provides them security, dignity and the quality of life needed to conduct their work productively.

Incidentally, despite the dependence of the affluent people on the working class, their attitudes about informal settlements being an “eyesore” that must be “removed” or “redeveloped” has long dominated the urban narrative. This “eyesore” offering dismal living conditions to its inhabitants, however, is an essential part of the urban landscape.

For one, their location near residential areas always meant easy access to essential services, like house help, drivers, plumbers, electricians and vegetable vendors. For the settlement-dweller, it is an opportunity to seek flexible employment — for example, a house help, who takes up multiple jobs in a building complex, or a dhobi (ironing man) who services an entire residential locality. Other services from the informal economy that we rely on every day include the garbage and rag pickers, whose labour is largely manual. With dumping grounds declared a health hazard in most cities today, one can imagine our situation if waste pickers did not diligently collect household wastes and sieve through them, removing everything that is reusable.

Considering these informal workers’ role in keeping our homes and cities clean, it is important for us to appreciate their contribution and establish protocols to support their growth potential by offering safe housing, job security, ensuring their health and enhancing wellbeing.

Informal workers in India fall under five categories: Household, waste, construction and transport workers, and small-scale manufacturers and vendors. Together, they create huge economic value for cities. For example, the economic output of Mumbai’s Dharavi township is an estimated $1 billion. Without such contributions, urban India’s economic growth, already buckling under the stress from COVID-19, will be irretrievably impacted.

Incidentally, city planning in India has systematically ignored the informal sector so far. Our land-use norms, building rights, street design norms must be made flexible. More creative localised solutions must be developed for street vending — like community kitchens for cooking and only point-of-sale on streets etc. Affordable housing units could be designed more flexibly with 14-feet ceiling heights and mezzanines to allow them to function as “live-work units”, where one can combine workspace with living quarters.

It is time that Indian cities accepted the reality of their informal economies, and adopted flexible, mixed land-uses to support them. In this context, clearer rules can be developed with distinguishing norms for polluting and non-polluting activities.

Employing contract labourers to circumvent formal employment has lately become a practice in the service sector. This could offer win-win solutions to the employers and the employees, provided labour rules are strengthened.

Finally, government policies and urbanisation strategies must be made stronger and quicker to implement, considering that cities and towns are engines of growth. Putting in place a strong post-lockdown protocol and initiating a strategic review of the existing policies and mission plans, could provide the Ministry of Housing and Urban Affairs (MoHUA) a unique opportunity to retrofit and regenerate urban areas. With strategic planning, we could facilitate better quality jobs as well as decent housing to the people. Programmes like the Deendayal Antyodaya Yojana — National Urban Livelihoods Mission (DAY-NULM), Swachh Bharath Mission and Housing for All can also be effectively recast with a people-first vision.

A 2018 NITI Aayog report estimated that 85 per cent of India’s workforce is employed in the informal sector. The nation’s services-driven economy will continue to have large informal employment and we need to devise better ways to build a database as well as create and maintain up-to-date information about this population. Unless we are able to establish information, there is no way we can build platforms like welfare boards, insurance policies, housing systems, etc to improve their lives and make them feel truly welcome in our cities.

Sinha is Senior Fellow, World Resources Institute India. He is a 1979-batch IAS officer and was personal secretary to former Prime Minister Atal Bihari Vajpayee. Pai is director, WRI India Ross Center for Sustainable Cities. Views are personal

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