Nano-entrepreneurs, construction workers, domestic helpers, and street vendors, etc, who form the lower 50% of the labour force continue to operate under severe constraints
Updated On – 16 December 2024, 11:14 PM
Representational photo
By Sushiila Ttiwari, D Samarender Reddy
India’s economic trajectory has been both inspiring and challenging. While the country has emerged as one of the fastest-growing economies globally, its informal labour sector, which includes the lower 50% of the labour force, such as nano-entrepreneurs, construction workers, domestic helpers, and street vendors, continues to operate under severe constraints. Despite their substantial contribution, their potential remains untapped due to systemic barriers such as financial exclusion, lack of training, and poor policy support.
As India grapples with GDP growth falling to 5.4%, there is an urgent need to focus on this segment of the workforce. Addressing their challenges and empowering them with better opportunities can be a game changer for economic revival. The insights in this article are drawn significantly from the pioneering research and impactful initiatives of Rajendra Joshi, visionary founder of Saath Charitable Trust.
Unseen Backbone
India’s informal sector employs an estimated 87% of the workforce, encompassing millions of workers and micro-entrepreneurs. Nano-entrepreneurs alone account for a significant share, often operating small businesses with minimal investment. According to the National Sample Survey Office (NSSO), the informal sector’s Gross Value Added (GVA) rose from Rs 8.62 lakh crore in 2022 to Rs 9.99 lakh crore in 2023. This growth underscores the resilience of informal workers despite their limited access to institutional support.
Rajendra Joshi, whose work with the Saath Charitable Trust spans over three decades, has been instrumental in highlighting the critical role of the informal sector in India’s urban economy. His efforts focus on integrating marginalised communities into mainstream development through innovative solutions like nano-enterprise support, financial inclusion and skill-building programmes. Joshi’s book Smart Cities: Breaking the Poverty Barrier provides a comprehensive account of these efforts, offering practical insights into how slums and informal settlements can become hubs for economic growth rather than centres of neglect.
Challenges, Missed Opportunities
The lower 50% of the workforce faces a myriad of challenges that hinder their ability to contribute effectively to the economy. Lack of formal recognition is a major issue. Workers in this sector are often invisible to policymakers, which means they miss out on benefits such as subsidies, skill development programmes, and access to credit. Nano-entrepreneurs, for example, are crucial drivers of local economies but rarely receive the support needed to scale their operations.
According to the National Sample Survey Office (NSSO), the informal sector’s Gross Value Added (GVA) rose from Rs 8.62 lakh crore in 2022 to Rs 9.99 lakh crore in 2023.
Moreover, inadequate education and training exacerbate these issues. Many women in the informal sector, particularly those engaged in domestic work and waste picking, have not completed primary education. Men, too, face significant skill deficits, often finding themselves trapped in low-wage, unskilled labour. These gaps prevent workers from transitioning into higher-paying, stable jobs, thereby limiting their economic mobility.
Health and safety concerns are another pressing issue. Informal work environments often lack basic amenities such as clean drinking water, sanitation and safe working conditions. These deficiencies lead to frequent illnesses, reduced productivity, and financial strain on already vulnerable families. In turn, this cycle of health issues and economic instability reinforces the socio-economic divide.
Unlocking Potential
Financial inclusion is a cornerstone for empowering the lower 50% of the workforce. By providing access to affordable loans, insurance, and savings accounts, workers can invest in their businesses and secure their livelihoods. Programmes like the Saath Savings & Credit Cooperative Society offer a model for success. By extending zero-interest loans and connecting workers to microfinance institutions, these initiatives enable nano-entrepreneurs to scale their businesses and achieve financial stability.
Skill development is equally critical. Training programmes that align with market demands can equip workers with the skills needed to secure better-paying jobs. Organisations like the Saath Charitable Trust have made significant strides in this area, training over 72,000 youths and women in formal and non-traditional livelihood courses. These initiatives not only improve individual earning potential but also contribute to broader economic growth by creating a more skilled and productive labour force.
Market linkages can further amplify these efforts. Connecting nano-entrepreneurs to larger markets ensures they receive fair prices for their products and gain access to a broader customer base. In Ahmedabad, for instance, cooperatives have successfully aggregated resources, enabling micro-entrepreneurs to compete on a larger scale and increase their profitability.
Case Studies
Leadership plays a pivotal role in transforming the lives of marginalised workers. Rajendra Joshi’s work with the Saath Charitable Trust is a shining example of how grassroots initiatives can drive systemic change. With over 1.5 million lives impacted through Saath’s programmes, Joshi’s vision for equitable urban development combines community empowerment with practical solutions like skill-building and financial inclusion.
Similarly, under the chairmanship of V Vidyasagar, Sagar Asia Pvt Ltd has emerged as a leader in empowering workers from underprivileged backgrounds. Vidyasagar’s company, employing over 500 people, specialises in aluminium extrusions and value-added products like ladders, scaffolds, and wind tower components. His focus on skill development and equitable wages, particularly for women, reflects his commitment to creating an inclusive industrial ecosystem.
PV Hariharan, ex-CEO of a polymer products company and founder of Agrobiogenics, has done extensive research all over India in over 1,000 villages, studying India’s potential in terms of Resources, including Human Resources. His agrobiogenics initiative leverages sustainable agricultural practices, emphasising environmental sustainability while creating opportunities for those at the lower rungs of society, demonstrating the interconnectedness of social equity and environmental stewardship.
Targeted Intervention
Studies estimate that targeted interventions in financial inclusion, skill development, and market access could boost GDP growth by 1.5% annually. Training programmes alone could contribute an additional Rs 10,000 crore to the GVA, while improved financial inclusion could unlock billions in latent economic potential.
Moreover, empowering the informal sector aligns with global sustainability goals, including poverty alleviation, gender equality, and decent work for all. By investing in this segment of the workforce, India can address pressing socio-economic issues while achieving sustainable economic growth.
To sum up, the lower 50% of India’s labour force represents a vast reservoir of untapped potential. By prioritising their well-being and potential, India can chart a path toward equitable and sustainable development, ensuring that no one is left behind in its journey toward progress.
(Sushiila Ttiwari is Managing Director and D Samarender Reddy is Director, https://7qube.com/)
