A Comprehensive Profile of Urban Unorganised Labour in India

Walk through any Indian city at dawn and you will see the workforce that keeps it running: vegetable sellers setting up carts, masons heading to construction sites, domestic workers boarding crowded buses, and rickshaw pullers waiting at corners. None of them clock in at a registered office, sign a written contract, or receive a payslip. They belong to the urban unorganised sector, a vast and varied workforce that powers the urban economy while remaining largely invisible to the systems meant to protect it. Understanding who these workers are, what they do, and the conditions they face is essential to making sense of how cities actually function.

What counts as urban unorganised labour 🔗

The unorganised or informal sector broadly refers to workers and enterprises that operate outside formal regulation, without legal recognition, written contracts, or social security. The scale is striking. The International Labour Organization has estimated that around 84 percent of the non-agricultural workforce works under informal conditions, and in urban areas the share of informal workers has risen steadily over the decades. These workers are not a fringe group; they are the majority of the labour force in towns and cities.

The main categories of workers 🔗

Urban unorganised labour is far from uniform. It broadly splits into three groups. The first is the self-employed, including street vendors, rickshaw pullers, and people running tiny home-based units. The second is casual or wage labour, such as daily-wage construction workers and helpers in small workshops. The third is small-scale entrepreneurs who run unregistered enterprises with little capital. A study of urban employment found that the workforce is split almost evenly between the self-employed and wage employed, underlining how mixed this sector really is.

A snapshot of the workforce 🔗

Because cities concentrate schools and colleges, urban workers tend to be more literate than their rural counterparts. Yet literacy has not translated into formal skills. A large part of the urban informal workforce remains unskilled or semi-skilled, learning trades on the job rather than through certified training. This mismatch traps many workers in low-productivity, low-paying jobs even when they can read and write, and it limits their ability to move into better-protected formal employment.

Income and earnings 🔗

The earnings picture is sobering. Government data from the national database of unorganised workers shows that an overwhelming share of those registered report very low monthly incomes. According to figures cited around the rollout of the registration drive, more than 94 percent reported earning ₹10,000 or less a month. Most workers in this sector also belong to historically disadvantaged communities, with a large majority coming from Scheduled Castes, Scheduled Tribes, and Other Backward Classes, which deepens the link between informal work and social inequality.

Diverse occupations across the city 🔗

The unorganised sector covers an enormous spread of jobs, each with its own rhythm and risks.

Street vending 🔗

Vendors selling food, clothes, vegetables, and household goods are among the most visible informal workers. They provide affordable goods to ordinary residents and supply chains to formal businesses, yet they routinely face eviction drives and harassment because their right to occupy public space is contested.

Construction work 🔗

Construction is one of the largest employers of informal labour, and the vast majority of these workers are hired without formal arrangements. Many are migrants moving between sites, paid daily, and exposed to serious physical hazards with little safety equipment or compensation when injured.

Domestic and home-based work 🔗

Domestic work, performed mostly inside private homes, is one of the largest sources of female urban employment. Home-based work, where people produce goods or do piece-rate tasks from their own dwellings, is even larger. Both are hard to regulate precisely because the workplace is a home rather than a factory, which makes oversight and accountability extremely difficult.

Transport and waste work 🔗

Auto and rickshaw drivers, porters, loaders, and waste pickers round out the picture. Waste pickers in particular perform a vital environmental service by sorting and recycling the city’s discards, yet they work in unsafe conditions and are rarely recognised as workers at all.

Women and children at the sharpest edge 🔗

Within an already vulnerable workforce, women and children face the most acute exploitation.

Women workers 🔗

Informal employment is heavily feminised. A large majority of working women are concentrated in informal jobs, and within cities domestic work is among the biggest occupations for them. Women also dominate home-based production, often paid on a piece-rate basis that pushes earnings far below minimum wage levels and frequently below what men earn for comparable work. Their vulnerability is multiplied by the absence of maternity protection, exposure to harassment, and the double burden of unpaid household responsibilities.

Domestic workers illustrate this clearly. Researchers studying the sector during the pandemic documented low wages and a lack of legal protection, unpaid overtime, poor bargaining power, and even physical and sexual violence. Because their dependence on employers can extend to food and shelter, resistance becomes risky, which is why many advocates describe domestic work as standing at the intersection of gender, caste, and class subordination.

Child workers 🔗

Children are pulled into informal work as helpers in eateries, workshops, vending, waste sorting, and home-based units. Their labour is cheap, easily concealed, and almost entirely undocumented. Working long hours in hazardous environments disrupts schooling and damages health, perpetuating a cycle in which poverty forces families to rely on the earnings of their youngest members. The hidden nature of much informal work makes child labour particularly hard to detect and eliminate.

The core challenges 🔗

The problems that define this sector are interlinked and reinforce one another.

Low wages and income insecurity 🔗

Wages are typically low, irregular, and unprotected by minimum wage enforcement. Daily-wage workers can lose income with a single rainy day or a single missed shift, and wage theft, where promised payments are delayed or denied, has become disturbingly common across construction and other trades.

Poor and hazardous working conditions 🔗

Conditions range from uncomfortable to dangerous. Construction workers labour without safety gear, home-based workers spend long hours in cramped and poorly ventilated rooms, and street vendors endure pollution, extreme weather, and the constant threat of eviction. Few have access to healthcare or compensation when work makes them sick or injures them.

Limited social security and credit 🔗

Most informal workers have no provident fund, pension, paid leave, or health insurance through their work. They are also largely shut out of formal credit because they lack collateral, stable income records, or registered businesses. This forces many to borrow from informal moneylenders at high interest, deepening their financial precarity.

The policy and legal response 🔗

Successive governments have tried to extend protection to this workforce, with mixed results. The Unorganised Workers’ Social Security Act, 2008 created a framework for welfare schemes covering life and disability cover, health, maternity, and old-age benefits, and provided for social security boards at the central and state levels. For street vendors specifically, the Street Vendors Act, 2014 sought to protect livelihoods and regulate vending through town vending committees and proper survey and certification of vendors.

More recently, the Code on Social Security, 2020 consolidated earlier laws and again mandated welfare boards for unorganised workers. To make these schemes reach people, the government launched the e-Shram portal, a national database designed to register unorganised workers and link them to benefits, including accident cover. Schemes such as the Pradhan Mantri Shram Yogi Maandhan offer a voluntary pension to low-income informal workers.

The gap, however, lies in implementation. Analysts note that welfare boards created under earlier laws are yet to operate at full capacity, and that registration on a database does not automatically translate into delivered benefits. Domestic workers in particular are mentioned in policy but lack detailed enforcement frameworks, a point repeatedly raised in policy analysis on the sector. Laws exist on paper; reaching the worker on the street remains the hard part.

What do you think? If the urban unorganised workforce produces such a large share of economic value yet receives so little protection, where should reform begin: stronger enforcement of existing laws, or entirely new structures built around how informal work actually happens? And what responsibility, if any, do the rest of us, as employers of domestic workers or customers of street vendors, carry in changing these conditions?

References

1. https://www.bsg.ox.ac.uk/sites/default/files/2018-05/BSG-WP015.pdf
2. https://www.wiego.org/wp-content/uploads/2019/09/Chen-Urban-Employment-India-WIEGO-WP7.pdf
3. https://idronline.org/article/rights/do-indias-labour-codes-address-informal-workers-needs/
4. https://yipinstitute.org/capstone/invisible-labor-women-india-home-work
5. https://journals.sagepub.com/doi/10.1177/00194662211023845
6. https://www.indiacode.nic.in/handle/123456789/2100?locale=en
7. https://www.indiacode.nic.in/handle/123456789/2124?locale=en
8. https://eshram.gov.in/act-and-rules
9. https://www.orfonline.org/expert-speak/empowering-domestic-workers-in-urban-india