Dynamics of Urban Labour Market and Informality

Informal sector and informal employment have not only persisted over the years, but have also witnessed growth, particularly during the phase of globalisation. The Indian labour market is characterised by the presence of a large informal economy, which provides livelihood to numerous workers accounting for around 90% of the workforce. Evidence of the rise in contractualisation, outsourcing and flexibility of jobs in modern services and industries suggests a process of increasing informalisation of formal sector and deterioration of job quality particularly in urban areas. This paper reveals the existence of poor employment conditions of workers engaged in urban informal sector with precariously low incomes and without social security. The probit regression results indicate that affirmative policy has helped the marginalised group in accessing formal sector employment, particularly highly educated individuals have benefited more than others. Several initiatives have been taken to improve the labour and employment conditions in both formal and informal sector. The Ministry of Labour and Employment has notified four labour codes and is expected to bring informal sector workers under the social security net and will have positive and farreaching effect on workers’ well-being. ‘E-Shramik’ portal has also been launched to create a centralised database of unorganised sector workers which will help to implement the social security services. It is persuasively argued in the paper that the minimum social security and social protection is inevitable to mitigate the hardships of vulnerable urban informal sector workers especially those belonging to lower income groups and with lower educational levels.