The advent of globalization and marketization has resulted in an emergent trend towards the ‘informalisation’ of the labor market. Policymakers have identified the income-generation potential and the significance of the informal sector as a source of jobs in adverse economic crises. However, the phenomena of globalization and the work sphere cannot be disassociated from their gendered power relations. Developing countries like India, with a concomitant rise in informal employment, reveal an increasing number of women joining this sector, but mostly remaining “invisible” as they continue to work in low paid, low-status jobs in the informal sector; jobs which do not have any possibilities of betterment”. Studies suggest that 94% of women are a part of the informal sector, out of which approximately 50% perform functions in addition to their productive roles. These women are further confronted with constraints by their engendered role, wherein they’re additionally burdened with domestic responsibilities. Social connotations like these significantly contribute to the overall conceptualization of economic development. 

Challenges of Women in the Informal Sector of the Economy 

Women in the informal labor force lie at the receiving ends of gendered vulnerabilities, because of the structural discrimination directed towards them, which materially worsens depending upon their converging social identities. Restricted to “gender-stereotyped” occupations that offer negligible mobility, women often find themselves working in labor-intensive small-scale enterprises, like agriculture, construction, domestic work, garments, etc.  

Despite forming a major part of the informal economy, women remain beyond the purview of social security provisions, fair wages, decent working conditions, and protective labor legislation. This lack of recognition of women workers in the informal sector and their overall contribution to the economy manifests in them being vulnerable to a form of “moral injury” that subsequently degrades their sense of self, and negatively decelerates their active participation in the economy. Such challenges highlight the absence or inefficiency of schemes and programs committed to the cause of women empowerment. The pandemic has exposed these limitations existing in the political structure even further, emphasizing the need for social security schemes for women that will not just alleviate poverty, but defeat gendered stereotypes that limit the occupational scope for women.

Current state of Policies 

Currently, there exist various policies in India that address the welfare and social security needs of workers in the economy, ranging from schemes for pensions, maternity benefits, Employee Provident Funds (EPFs). The core problem of the matter is that these policies for the longest time have remained restricted to the organized sector, failing to provide much-needed benefits to the unorganized sector. 

In 2008, the Unorganized Workers’ Social Security Act (UWSSA) was passed to bring the neglected unorganized workers into the mainstream of the Indian economy, by bridging the existing disparity between the organized and the informal sector. The UWSSA was considered a landmark policy as it addressed the needs of the informal sector, characterized by casual employment and verbal agreements. Other policies that have been passed thereafter regarding the informal sector of the economy have been extensions of the same Act or have been its provisions. 

The main criticism of this Act is that the ‘unorganized sector’ has been loosely defined as a place where ten or fewer employees have been engaged in providing a service or manufacturing of goods in exchange for remuneration. Another drawback is that these policies are targeted towards individuals and families earning an income below the poverty line, creating a sort of divide between the workers below the line and those above. The Bill was also critiqued for its exclusionary structure that provided negligible relief to a vast section of the unorganized sector, especially failing to pay due attention to the social security needs of the women in this sector.

These policies have not even begun targeting women working in the informal sector so far. The needs of these women are much greater than what is contained in most social security policies for the unorganized sector. The Indian Maternity Benefit Act, 2017 is a policy that addresses different aspects of the gender gap in employment, but there exist limitations in its definition as well. The law was dismissed by many as a flawed piece of legislation since the provisions within it benefitted only a small percentage of women in the organized sector. Sudeshna Sengupta, an independent researcher, argued that the law, even if fully implemented, will benefit “only 1.8 million women in the organized sector leaving out practically 99% of the country’s women workforce. Additionally, the law seemed to make no mentions of paternity leaves, putting the onus of child care on the mother alone— an idea that has its roots in the patriarchal mindset, thus defeating the cause of gender equality at the workplace.

State Level Policies 

At the State level, we see that each State has a set of Gender Development Policies in addition to policies that generally address the informal sector of the economy. Most of these policies passed by these State Departments address the various facets of reducing the socio-economic inequality that impacts women significantly. Falling in line with the targets laid down by the Central Government under the supervision of the Ministry of Women and Child Development, these policies tackle issues ranging from domestic violence to vocational training of women. These schemes across various States attempt at fighting the same issues under policies of different names and are quite standard. Examples of such policies would be the various programs that the Karnataka and Maharashtra governments have tried to implement, aimed at removing the handicaps under which women work.

Policy Recommendations 

There is no single policy that has the power to address the multitude of difficulties that women in the informal sector face daily. At present, the main issue faced by women in the informal sector is a lack of bargaining power and representation in the economy. It is the employer who holds the upper hand in almost all stages of work, often compelling the employees to work under exploitative conditions. Women, specifically, are affected majorly as they are denied leaves, and offered sub-par income for their labor-intensive work.  

There are two ways to tackle this. Firstly, the government and administrative authorities can intervene to set a minimum wage for employers to comply with. This could be determined based on the occupation or the location of employment, simultaneously supervised by the State Government and their labor departments. Secondly, more self-help groups and the enrolment of these women in trade unions will help in setting specific guidelines and demands that can be communicated to employers and provide them with a voice for redressal.

Another significant suggestion would be to effectively implement the existing policies in place that address the provision of education and daycare services and increase the span of the Integrated Child Development Services (ICDS) and converting Anganwadis into a more comprehensive daycare center that allows women the room to avail work and better economic opportunities. The existence of a policy framework that exclusively caters to occupations composite of mainly women, such as agriculture, construction workers, domestic workers, garment workers, and vendors and provides them with the same benefits that are provided under the other existing social security schemes, will be another positive step in this direction. There is a need to strengthen daycare schemes for children of working women such as the Rajiv Gandhi National Creche Scheme passed in 2006 which currently lacks funding, but if implemented successfully, it could aid the development of women in the informal sector.

An integrated approach to the above recommendations would promote the holistic development of the informal sector of employment for women. In today’s times, we see that our economy has not been able to function without these essential service providers. Therefore, it is time to fight income inequality from the grassroots level and promote a society with equal opportunities and access to resources

By Rahul Kumar, Research Associate, Policy, LQF (erstwhile) and Mahima Sharma, Associate, Content Development, LQF