University of Delhi

School of Open Learning

Mixed Economy, Privatization, the impact on

organization & unorganized labour
Unit 2, Lecture 5, Dated: 03/10/2021

Shalini Singh
Features of Mixed Economy

✓ Co-existence of Private and Public Sector

✓ Economic Welfare
✓ Economic Planning
✓ Controlled Development
✓ A mix of socialist & capitalist economy
 Privatization

Denationalization Disinvestment Deregulation

Market Forces Roll back of State Liberalization

 Consequences of the Reforms
▪ Structural Transformation of the economy : decline in Agriculture and
corresponding increase in Industry & Services Sector.
▪ Jobless Growth : Rate of employment is low
▪ Productive Employment requires two-fold transitions: one from Agriculture to
unorganized Industry or services, second from informal employment to
formal employment in the organized sector.
▪ Urban wages are better in the unorganized sector, thus there is a migration in
terms of workplace and change in the profession as well.
▪ According to Periodic Labour Force Survey, 90% working population is a part
of informal sector in India.
 Informal Economy
✓ The unorganized sector is also referred to as the informal economy.
✓ India’s Ministry of Labour classified the unorganized sector into four compartments:
✓ Occupation, nature of employment, specially distressed categories & service
categories.
✓ The informal sector contributes to almost 50% of our GDP.
✓ Lack of reliable statistics on the contribution, share and size of the informal sector as
most workers are outside the ambit of surveys conducted by National Sample Survey
Organisation (NSSO)
✓ Last survey conducted by NSSO in 2004-05 stated it constitutes 86% of employment.
Who is an unorganized Labour?
According to Unorganized
Workers’ Social Security Act
2008, an unorganized worker is
a home-based or self-employed
wage-worker. He/She is not
covered under the acts
mentioned in the Schedule II
Definitions as per the Act:
Employer : A person/association of persons who has directly/indirectly
engaged or employed an unorganized worker for remuneration

Home-based worker: A person engaged in the production of goods or

services for an employer in a place other than the workplace,
irrespective of proper working conditions and equipment.
 Organized Sector
✓ Under the supervision of Government
✓ Adherence to rules & regulations
✓ Security of Employment
✓ Fixed working hours
✓ Leaves are granted as a right
✓ Additional provision of overtime
✓ Medical, housing & pension benefits
Unorganized Sector
✓ Outside the ambit of Government
✓ Flexibility of rules & regulations
✓ No Security of Employment
✓ No fixed working hours
✓ Leaves are not compensated for
✓ Exploitation in the form of overtime
✓ No additional benefits
Who is a wage-worker?
A person employed for
remuneration by employer
or through a contract,
where the person is paid in
either cash or kind for being
a home-based worker,
casual worker or a migrant worker,
with a monthly wage of an amount as prescribed
by the central or state Government.
Eligibility for being registered under the Social Security Benefit Act as an
Unorganized Worker
He/she shall have completed the age of 14 years.
A self-declaration by the worker that he/she is an unorganized labour
Should have an identity card and UIDAI number as prescribed by the
Government

If it is required under the provision, that the unorganized worker has to contribute
a particular amount to avail the benefits of the scheme. He/she is should do so to be
enrolled as a beneficiary.
 Problems with unorganized labour

Debt Bondage
Migrant labourers Child Labour
 Thanks!
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