Prime Minister of India - Dr. Manmohan Singh

PM chairs meeting of the National Commission on Enterprises in the Unorganised/Informal Sector

The Prime Minister, Dr. Manmohan Singh, had an intensive interaction with the National Commission on Enterprises in the Unorganized/Informal Sector and its Advisory Board, here today. Pursuant to a commitment by the United Progressive Government in the National Common Minimum Programme, the National Commission was set up in September 2004 to examine the problems facing the enterprises in the unorganized/informal sector and suggest measures for generation of large scale employment opportunities on a sustainable basis. The Commission has also been asked to recommend measures for enhancing the competitiveness of the informal sector in the emerging global environment, and strengthening its linkages with its institutional framework in the areas of credit, raw material, infrastructure, technology upgradation, skill development and marketing.

Dr. Arjun K.Sengupta, Chairman of the Commission, acknowledged the personal contribution of the Prime Minister in the constitution of the Commission. The wide-ranging terms of reference formulated for the Commission reflect the concerns and priorities of the Government in respect of the informal sector of the economy. The Commission has been able to focus on a few significant programmatic interventions, which could be adopted in the immediate term.

The Chairman apprised the Prime Minister of the work done by the Commission so far. The Commission and its Advisory Board have held two meetings and detailed discussions have been held with various stakeholders. In the light of these deliberations, the following priorities have been identified for investigation and action in the immediate term:

* The notion of growth poles for the informal sector in the form of cluster/hubs, where external economies need to be provided to spur employment generation and productivity enhancement and the feasibility of integrating the initiatives and programmes of various Ministries in this domain;

* Skill formation in the informal sector and the potential for public private-partnership in the provision of the required skills;

* Provision of micro finance and related services to informal sector enterprises and strengthening of the institutional framework in this area;

* Issues concerning social security for the workers in the informal sector and instrumentalities for achieving this objective.

In his address to the Commission, the Prime Minister underlined the importance of formulating a new development strategy, in view of the fact that the organised sector has ceased to be a creator of employment opportunities. The growth of productivity and employment generation capacity in the informal sector, which accounts for 90-95% of the employment in the economy, has to keep pace with the rate of increase in the labour force. In this context, the Prime Minister highlighted the concerns, which the Commission would have to address, on priority. In the first place, the problems of production, including the availability of capital, confronting the unorganised sector will have to be taken up. In particular, the imperfections of the market for capital in relation to the informal sector need to be addressed. Measures for facilitating market access for the unorganised sector, which is at a disadvantage compared to the organised sector, also need to be devised. Dr. Manmohan Singh also underlined the importance of identification and adoption of best practices in the field of technology upgradation in the context of an unprecedented increase in the generation of knowledge and technological advancement.

The Prime Minister laid special emphasis on the relevance of the Gandhian model of decentralised development and underlined the need for a comprehensive social security for the informal sector in view of the increasing commercialisation of the society and the weakening of the traditional social fabric. In this context, the relevant legal framework also needs to be reviewed. In conclusion, Dr. Singh exhorted the Commission to come up with a charter of a new deal for the informal sector of the Indian economy.

Following the Prime Minister's address, Members of the Commission and the Advisory Board articulated their views and insights regarding the informal sector. The participants in the discussions included Dr. K.P. Kannan, Member, Shri K.K. Jaswal, Member Secretary, Dr.Bibek Debroy, Director, Rajiv Gandhi Foundation, Dr. B.N. Yugandhar, Member, Planning Commission, Prof. Bhalchandra Mungekar, Member, Planning Commission, Prof. S.Mahendra Dev, Centre for Economic and Social Studies, Hyderabad, Ms. Madhu Kishwar, Editor, Manushi, Shri Joginder Kumar, president, The Federation of Tiny and Small Industries of India, Ms. Mirai Chatterjee, SEWA, Professor Jean Dreze, Delhi School of Economics, Prof. Amit Bhaduri and Shri Anupam Dasgupta, Secretary (SSI).