Lack of credible data may render e-Shram portal ineffective

MGNREGS, unemployment
There is little correlation between MGNREGS and unemployment -- the former is a scheme for unskilled workers, while unemployment affects educated youth.

By Kaibalyapati Mishra

The e-Shram portal, a national database for unorganised sector, was launched on August 26, 2021. This, definitely, is a welcome step, but lack of employment data makes it less effective. So far, 2.47 lakhs of applicants have registered on the portal. The government claims these are unorganised workers. The national gazette defines unorganised labour as a home-based or self-employed worker or workers in the organized sector who are not covered under any Act ensuring their social security as mentioned in Schedule II of the Unorganised Workers’ Social Security Act, 2008.

A simple scrutiny of the data shows that not everyone who registers with the e-Shram portal is unorganised labour. By highlighting the Unorganised Workers’ Social Security Act, 2009, the portal aims at reaching out to people to bring them under the social security umbrella and provide them with financial assistance through direct benefit transfer. Though there is a separate clause for skilling, it’s a moral hazard that government skilling is seen as a fiscal remuneration towards an incapability to which everyone wishes to become a free rider.

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In the absence of valid scrutinisation of claims for e-Shram cards, the government efforts will boil down to hoardings, lumpy numbers and false narratives. The portal (e-Shram) uses only a bottom-up approach to filter out the unorganised sector. But this approach doesn’t seem to become successful because of some obvious reasons, like the absence of jobs to absorb these registered applicants, imparting skills that are not worthy fetching jobs on their own and the greed of getting the government social security cover. This article discusses some possible ways to address the issues faced by the unorganised sector as a whole.

Understand, reason and react

It is important to understand that the Indian unorganised sector reflects the diversity of the nation. This segment of the workforce can be categorised effectively into segments, based on their dependence on inheritance, culture, geography and tradition that they belong to. No doubt, there are region and genre-specific schemes at a place to promote such diversity, but it is difficult to reach the man on the last mile with such flagship schemes. The crude understanding of the reality is that the social sector research to understand such ground realities is absent and the available knowhow doesn’t get to see a policy face for several reasons.

Instead of spending money on portals, the government needs to spend research in the sphere of understanding the unorganised sector better. The reason behind the US, UK and the other developed countries are growing in terms of human resources is not because of government schemes, rather the encouragement given to the research community to understand and device mechanisms to deal with situation-specific issues. Thus, a bottom-up approach guided by top-down research findings can solve the problem in a better way.

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Model to modify e-Shram portal

It might sound silly to urge economists / social scientists to come up with models for the growth of all the aforementioned classifications of unorganised sector, but this shall certainly bring in the expertise to see the ground-level issues. A model that represents the sector of craftmanship will be different from that of the sector of bidi manufacturing. Though diversity is the beauty of the nation, it also demands separate ways to deal with different segments of the economy.

Making the market for goods and services produced in the unorganised sector efficient by bringing in thickness (huge number of potential buyers and sellers) and thereby congestion shall require specific framing of policies based on the nature and characteristics of the sector under study. A thorough study of the segments of the unorganised sector will leave it no more unorganised. We call it unorganised because we don’t understand its organisation.

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Accounting for repugnance

Indian economy is rightly identified as God’s economy clusters around the norms of religion and beliefs. Removing God from the economy won’t make it a less God one, a significant part of the unorganised sector would rather collapse. A larger portion of seasonal unemployment is chained up with religion, faith and festivities. But the problem arises when an exchange between two creates negative spillovers for others, or in a simple sense, others don’t want such transaction to take place. These are termed repugnant transactions.

Violence in the name of cow protection is an example of the same. There are other examples of repugnant transactions such as surrogacy, prostitution and many others where people still suffer from the very nature of the work they do. To account for such markets and issues, a thorough understanding of the public motive is crucial which the government doesn’t seem to take into its knowledge in any form.

The art of discovering opportunities

Imparting the skill that can make unorganised labourers join the routine workforce can be done only through educating them. The uneducated mass will give no results as there will be already an excess supply of labour for the jobs demanding the same skills. Moreover, research and innovation play an important role here too. Technological developments to make the production process labour friendly and innovation of new products can create scope for employment of this chunk of the labour force.

The government should promote ideas that can bring a large chunk of low-skilled unemployed mass under healthy employment contracts. An excellent example of the same is food delivery services. Thus the individuals should not be molded into predetermined categories of skills, rather they should be encouraged to come up with ideas that can ensure income and better living. Unorganised sector unemployment is an issue that will not disappear anytime soon. Thus public policy needs to be backed by systematic and scientific observations and research.

(Kaibalyapati Mishra is a research student at the Centre for Economic Studies & Policy, Institute for Social & Economic Change, Bengaluru.)