India’s over 400 million informal labour market requires a structural shift: ISF

‘Income inequality and rising poverty levels serve as stark reminders of the challenges we face.’

Updated - May 25, 2024 12:03 am IST

Published - May 24, 2024 08:16 pm IST - Bengaluru

Formalisation of the workforce is needed to ensure equitable opportunities and sustainable livelihoods for all, say experts.

Formalisation of the workforce is needed to ensure equitable opportunities and sustainable livelihoods for all, say experts. | Photo Credit: Reuters

India with almost 85% informal labour, generating more than half of the country’s GDP, requires a structural shift towards structured and formal employment, said The Indian Staffing Federation (ISF), the apex body representing the country’s contract staffing industry,

Suchita Dutta, Executive Director, Indian Staffing Federation observed, ‘‘The plight of lower-income and semi-skilled workers underscores the pressing need for concerted action. Income inequality and rising poverty levels serve as stark reminders of the challenges we face.’‘

With 85% of India’s workforce operating in the informal sector, it was imperative to initiate a structural shift towards formalisation to ensure equitable opportunities and sustainable livelihoods for all, she added.

In a vision paper released ISF stressed the need of formalising the country’s informal workforce of over 400 million and anticipated organised staffing companies would be able to contribute to this exercise. The apex body also unveiled “India@Work: Vision Next Decade,” a blueprint for formalisation of informal workforce and implementation of labour codes in the country.

As per the document, while the government is trying to address issues for the migrant workers, ISF was going beyond stop-gap solutions, inviting inclusion through formalisation in the labour market. A noticeable distinction was seen during the pandemic, where the formal workforce, comprising less than 15%, had access to their social security, which aided them in overcoming the challenges, it said.

Some of the recommendations made by ISF included removing employment bottlenecks, urgent implementation of the four labour codes in India, policy changes and encouraging schemes, consideration of employment services as ‘merit services’, with lower GST slab tax rates at 5% with ICT benefits instead of the current 18% and linking of skilling initiatives to employment.

The apex body would be looking majorly into three crucial aspects to address the challenges posed: increasing the social security ambit; improving the concept of in-hand wage, implementation of labour codes; to minimise any obstacle to a favourable working condition, according to Lohit Bhatia, President, Indian Staffing Federation.

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