The informal sector in India is often described as the backbone of the economy, employing millions and providing essential services. From street vendors to domestic workers, this vast sector plays a crucial role in sustaining livelihoods, particularly for those who lack access to formal employment opportunities.
According to estimates, over 80% of India’s workforce is employed in the informal sector. These workers often operate without job security, benefits, or legal protections, making them vulnerable to economic fluctuations. Despite these challenges, the informal sector has proven to be resilient, adapting to changing market dynamics and consumer preferences.
Street vendors, for example, are an essential part of urban life, providing affordable food and services. Many vendors have innovated by using digital payment platforms to expand their customer base. This shift not only increases their income potential but also enhances convenience for consumers. However, regulatory challenges often hinder their operations, as they face harassment from authorities and lack access to public spaces.
Domestic workers, predominantly women, also constitute a significant portion of the informal workforce. These workers play a crucial role in households, providing childcare, cleaning, and elderly care. However, they often face exploitation, with long working hours and low pay. Efforts to organize domestic workers into unions are gaining momentum, advocating for better wages and working conditions.
The COVID-19 pandemic exposed the vulnerabilities of the informal sector, with many workers losing their livelihoods overnight. In response, various NGOs and community organizations stepped in to provide support. Initiatives offering food relief, financial assistance, and skill development programs helped many workers navigate the crisis.
The government has recognized the importance of the informal sector and is working to extend social security benefits to workers. The Social Security Code aims to provide protections like health insurance and pensions, helping to safeguard the livelihoods of informal workers.
As the informal sector continues to evolve, the focus must remain on promoting fair wages, legal protections, and access to resources. By empowering informal workers, India can harness the full potential of this vital sector while fostering economic growth and social equity.
