Books
INFORMAL SECTOR IN INDIA: Perspectives and Policies edited by Amitabh Kundu and Alakh N. Sharma. Institute for Human Development, New Delhi, 2001.
THIS volume is a compendium based on papers presented at a seminar on the informal sector organised in Delhi in December 1997 by the Institute for Human Development and the Institute of Applied Manpower Research. Though the contributors are mainly academics the objectives that the editors set themselves extend beyond academic analysis. As stated in the Preface, ‘The volume, in general, attempts to identify areas and avenues that can be pursued to find solutions to the problems confronting this sector, and thus help in developing a policy perspective for its healthy growth.’
In an introductory essay, the editors bring together the findings of the various papers. The papers contained in this volume are of a high standard and many draw upon original research. As a set of essays on different aspects of the informal economy, this book will be of great value to students and others. However, given the objectives of the volume, this review focuses on the degree to which the volume succeeds in conveying clear policy messages.
The translation of research into concrete policy prescriptions can be a difficult task. It is not clear how far the relation can be a ‘linear’ one, with a clear research finding getting translated into a specific programme or policy statement. Presumably, the messages that researchers want to convey to policy-makers can be of two kinds: first, to draw attention to an area, an issue or a concern that has been overlooked or given insufficient attention. Second, if the concern is to make a measurable impact, research can lead to clear suggestions, should programme A be replaced by Programme B? Since most of the contributors to this volume argue for flexibility and plurality in policy-making, no such specific change is being recommended in most of the articles. Ultimately, however, policy impact will be felt only when research findings are linked to the intricacies of law, policy and programme content, as they stand at present and as it is felt they should be modified.
This book is more addressed to the first level of policy dialogue, i.e. the identification of concerns and issues. A second general comment on the book is that in so far as a ‘book’ is to be taken as a single entity, it does need to present one message, albeit in several voices or from different points of departure. In that respect, however, commonality between the contributors is seen only at a very high level of generality. As a policy tract, then, the book does not succeed in presenting any single clear message, or even a set of clear messages. But it may still succeed in injecting new ideas and concerns into the policy discourse.
The first section of the book on Conceptual and Methodological Issues contains two papers, one by S.S. Suryanarayanan and the other by A.C. Kulshreshtha and Gulab Singh. These papers explicate the present status of data on the informal sector, the main sources, and the widening of information availability over the years. Gaps persist, but clearly there has been considerable activity in recent years among official statisticians, both nationally and internationally, to try and capture better the employment and output of the informal sector. What these papers do not tell us is the manner in which policy might change if more and better data were to be made available; what kinds of macro policy measures have been stalled for lack of data, or what directions have not received adequate attention because of non-availability of data?
The next section of the book is titled ‘Trends and Patterns at Macro Level’. The paper by Arup Mitra concludes that there is an inverse relation between urbanisation, industrialisation and the size of the informal sector. The paper ends with what could be the start of a policy discussion, i.e. What specific steps could help develop backward and forward linkages between the formal and informal sectors. The next paper by Amitabh Kundu, N. Lalitha and Sant Lal Arora analyses the interdependencies of informal manufacturing in urban India. The findings seem to confirm a decline in urban informal manufacturing employment in urban areas, although it is suggested that this may partly be a result of sub-contracting to household enterprises. It is argued that different policies would be needed for the low productivity informal sector, while the more dynamic part would gain substantially from better credit facilities, as one important input.
Jeemol Unni’s paper on wages and employment in the unorganised sector raises issues in wage policy. Data reveals that while wages in the organised sector have been maintained over time, those of the unorganised sector have been declining. A meaningful wage policy should include both minimum wages as well as assured employment for a minimum number of days. Next, Darshini Mahadevia examines the informalisation of employment and poverty in Ahmedabad. The manner in which the city government has handled suggests that ‘urban policies are oriented towards gradually passing on the cost of urban basic services to the poor themselves, while initiatives towards developing social security systems are lacking.’
Amita Shah discusses scalar linkages in industries. Her findings suggest that there is an ‘upward shift in the scalar hierarchy’, i.e. the large scale sector is gaining in importance. She makes the interesting suggestion that more productive employment might be found in agriculture than in marginal and low productivity small scale industries. There is a plethora of interesting research findings and ideas in this set of papers.
Part III of the book is concerned with Structure and Dynamics at the Micro Level. Keshab Das reports on the findings of the ceramic ware industry in Gujarat. This study confirms that informality of labour arrangements are deeply entrenched in both the registered and unregistered sectors such that existing mechanisms for formalisation of enterprises do not provide a guarantee of work and income security to workers. G. Swaroopa Rani and S. Galab present a case study of sandal making in Hyderabad. Informal enterprise can be organised in different ways, and one of the important insights of this paper is the finding that workers who are ‘own account’ workers earn more and may be better off than sub-contracted workers. The higher productivity of untied production units is an important finding on the link between production organisation and economic performance.
Manjit Singh discusses the political economy of labour in the context of a case study of the surgical instruments manufacturing industry at Jalandhar, Punjab. In Sialkot, Pakistan, the industry continues to flourish, but in Jalandhar it is rapidly declining. If the state intervenes to make available modern technology and facilities for upgrading skills, the industry could survive and flourish; left to market forces it seems headed for collapse. Supriya Roy Chowdhary’s study of power-looms in silk weaving in Karnataka finds that this example of the rural non-farm sector is characterised by low productivity and profitability. Interventions made by NABARD and cooperatives in the area have been ineffective. The paper concludes that there is need for ‘innovative thinking and effective intervention’.
Nagesh Kumar explores the Indian experience in small information technology services, i.e. of informal IT services. These are mostly geared to domestic, not export needs. They have high potential as regards demand. On the supply side, constraints relating to availability of finance, opening up access to training, and integrating IT into school and college curricula are specific recommendations. Surjit Singh discusses the informal tourism sector in two cities (Jaipur and Agra) and finds little or no links with the formal sector. The way ahead seems to lie with greater formalisation – implementing labour laws, encouraging the inflow of tourists, strengthening hygiene, training taxi/auto drivers and so on.
Each of these case studies is interesting. The policy recommendations have been determined separately for each industry/sector, presumably extending beyond a concern for informal workers and enterprises to include formal enterprises as well, and including concerns of both equity and growth. The paper by Harjit Anand attempts some generic conclusions based on experiences of five sectors (construction, handicrafts, scrap collection and trading, information technology and tourism). These studies confirm that informal workers are especially deprived and have low economic and social mobility. Apart from institutional factors, caste/class disadvantages create substantial barriers. Developing stronger linkages and partnerships between formal and informal sectors is seen as necessary for India to achieve global competitiveness.
The next section contains four papers on women in the informal sector. Jayati Ghosh reviews macro trends in the ’90s for women in urban informal employment. Data suggests that there is greater reliance on subsidiary rather than primary activity and important concerns relating to the quality of employment need to be recognised. These include increased home-based work through sub-contracting, associated with low earnings and a lack of any bargaining power. U. Kalpagam examines the impact of globalisation and liberalisation on women workers, with a special focus on livelihood security, and concludes that there is need to develop a holistic security system and to make the right to work legally enforceable.
Sudha Deshpande reports the findings of a case study of 300 women workers living in three slums in Mumbai. This study confirms that more women were working in the pre-reform period and that real incomes had fallen for over a third of the households. Martin Patrick presents a case study of saleswomen in urban centres in Ernakulum, Kerala, to show the extent and reasons behind gender wage gaps and the need for policy interventions. All four papers on women workers stress the need of finding ways of giving support to poorer, less skilled women in the search for livelihood.
Part V discusses support systems. Rajendra Mamgain and I.C. Awasthi review existing training initiatives and argue that these are inadequate. There is need for more resources and more integrated technology and training support to the informal sector. Tara Nair discusses credit needs of micro enterprises and for links to be developed between the formal and informal sectors to enable a flow of funds between them. Ela Bhatt argues that as far as the informal sector is concerned, policies remain restrictive and limit the scope of entrepreneurship and trade.
The final section of this book discusses social protection and organising. T.S. Sankaran points out that without legal rights and protection, regardless of whether social protection measures are implemented, dependency on the ‘disposition and good sense’ of those in power will continue. Navin Chandra and Surendra Pratap review a few examples of organising unorganised workers.
All in all, this is a valuable reference and guide to anyone seeking to work on the informal sector. It also leaves open a large (research?) agenda: the translation of policy issues into actual programmes and policies, and the ways in which one might try and maximise the likelihood of successful implementation in the social and political context as it exists.
Ratna M. Sudarshan
INDIA’S CHILDREN AND THE UNION BUDGET. HAQ. Centre for Child Rights, Delhi, 2001.
ONE more unfortunate outcome of the 11 September ‘terrorist’ strikes in New York and Washington and the subsequent launch of George W. Bush’s ‘Operation Enduring Freedom’ was the re-scheduling of the U.N. General Assembly meeting for a ten year review on child rights post enforcement of the Convention on the Rights of the Child (CRC). Evidently, minor issues like the fate of the world’s children can be jettisoned when weightier concerns are at stake. It is, of course, ironic that amongst the worst sufferers in the current campaign against global terrorism will be children – as victims of bombing, of land mines and as refugees.
Children, however, are victims not only in times and regions of conflict, but of neglect by both state and societies, including in countries which are signatories to the CRC. This set of five reports prepared by HAQ, a Delhi-based centre for child rights, interrogates the GOIs official country report to the UN General Assembly special session. The claim is that while preparing the draft bill on the National Commission for Children 2001 and the Draft National Children’s Policy and Charter for Children 2001, the government seems to have forgotten the commitments made to the UN as reflected in the investments made in its budgets. The study analyses the commitments and expenditures on children on health, elementary education, child development and protection.
The budget analysis assumes importance not the least because the last decade witnessed both a decline in state support to the social sectors and an encouragement to the greater involvement of the private sector. And while this decade has undoubtedly seen progress – lowering of infant mortality rates, increase in child survival, increase in literacy and fall in school drop-out rates – the thrust towards privatization and globalization has increased the volatility and uncertainty associated with government investments.
The general data about India’s children is well-known and makes for depressing reading: one in 13 children dies before age one; 0.7 million die every year from diarrhoea; close to 40% children are out of school; between 11 and 100 million children are in the labour market with nearly two million in hazardous industries; 11 million children live on the streets; there are half a million child prostitutes; and such statistics can be added to. Worse is the situation of the girl child with the sex ratio in the 0-6 age groups declining from 945 to 927 in the last decade.
It is not as if these issues have not merited attention and India can boast of an impressive number of child centred schemes in addition to having signed all the UN and Commonwealth child right conventions. Equally impressive is the list of constitutional provisions and laws. Nevertheless, as the budget analysis by HAQ makes clear, not only are our budgetary allocations inadequate, the actual expenditure on various heads is often lower than the allocations. Of course, the analysis has only been carried out on central budgets, and that too by focusing on education, child development, health and child protection. A truly national analysis would necessarily have to look at the states, but that is an exercise beyond the ken of a small NGO.
While spending on the social sectors as well as on children has increased in the last decade, it remains marginal with the share of children (0-14 age group) remaining as low as 1.6% in 1998-99. The average for the decade is a measly 1.2% of the Union budget. Every year the revised estimates and actual expenditures fall below the budget estimates, except in the mid-90s when new schemes were introduced. Third, many schemes suffer from underspending. Fourth, while the expenditure on children within the social sector budgets has gone up, form 12% in 1990-91 to 21.3% in 1998-99, the major increase has taken place in elementary education while expenditures on health have actually declined between 1994-95 and 1998-99.
More interesting is the computation of the share of external aid in the sectoral spending on children – the figures for the decade averaging at 49.9% in health, 14.6% in child development and 13.9% in education. This excessive dependence on external aid has often long-term implications on both the design and sustainability of the interventions. In any case, a fair chunk of the foreign aid goes towards high paid consultants and perks more than on the needy children.
There are more interesting nuggets in the reports dealing with specific sectors, but the broad trends remain raising the question as to why our children continue to suffer neglect, or worse, why despite allocations, little effort is made to target scarce resources efficaciously. The fact that children, particularly deprived children, do not form a vocal constituency is recognized. As is the fact that a ‘poor’ country with multiple claims on its resources is unlikely to be able to meet the global rising standards of compliance. Nevertheless, this analysis of unconcern will go a long way in demonstrating the hollowness of our claims as a caring society. Maybe, if the UN meet had actually taken place, our policy makers would have been forced on the back-foot. And the more we can do that, the better.
Seminarist