Section 2 (l) of the Unorganized Workers Social Security Act, 2008 defines an unorganised sector as a production or service oriented enterprise owned by individuals or self employed workers (one who is not working for an employer and is engaged in an unorgnised sector job earning an income below a threshold or owning land below a notified limit) and if workers are employed, then the total number of workers cannot exceed 10.
It is estimated that the unorganised sector workers, constitute 88% of the total labour force of 47.29 crore, as per the 66th Round of NSSO Survey of 2011-12. Unorganised or informal sector constitutes more than 90 per cent of workforce and about 50 per cent of the national product as per the 2012 Report of the Committee on Unorganised Sector Statistics. This report also highlights the varied ways in which the term unorganised sector appears in various surveys and studies.
At Section 2(f) of the Act, Organised sector is defined as the sector which is not the unorganised sector. It is pertinent to note that organised sector may also have unorganised workers working there.
In general, unorganised sector covers most of the rural labour and a substantial part of urban labour. lt includes activities carried out by small and family enterprises, partly or wholly with family labour. The wage-paid labour is largely non-unionised due to casual and seasonal nature of employment and scattered location of enterprises. This sector is marked by low incomes, unstable and irregular employment, and lack of protection either from legislation or trade unions.
The National Commission for Enterprises in the Unorganized Sector (NCEUS) was set up in 2004 as an advisory body and a watchdog for the informal sector to bring about improvement in the productivity of the unorganized sector enterprises for generation of large scale employment opportunities on a sustainable basis, particularly in the rural areas.