A STUDY ON WORKERS IN ORGANIZED AND UNORGANIZED SECTORS IN AUTOMOBILE INDUSTRY: A REVIEW OF LITERATURE

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1 International Journal of Mechanical Engineering and Technology (IJMET) Volume 9, Issue 5, May 2018, pp , Article ID: IJMET_09_05_052 Available online at ISSN Print: and ISSN Online: IAEME Publication Scopus Indexed A STUDY ON WORKERS IN ORGANIZED AND UNORGANIZED SECTORS IN AUTOMOBILE INDUSTRY: A REVIEW OF LITERATURE Dr. Ipseeta Satpathy Professor, School of management, KIIT University, Bhubaneswar, Odisha, India Dr. B.C.M. Patnaik Associate Professor, School of management, KIIT University, Bhubaneswar, Odisha, India Sri. Narayan Tripathy Deputy Chief Labour Commissioner, Odisha and Research scholar, School of management, KIIT University, Bhubaneswar, Odisha, India ABSTRACT Labour is one of the factors of production. The importance of labour cannot be undermine for the development of the economy. The present paper tries to understand how the labour plays a role in the automobile sector and other sectors also. The review of literature has been made in three different parameters. They are socio economic aspect, working environment aspect and education and skill development context. The objective of the study is to understand the existing scenario of workers in automobile industry both in organized and unorganized sector and to undertake an empirical study on the same. Secondary data has been considered for the purpose of the study. The key findings which need to be addressed are basic education and skill, social security, need for self-help group for collective bargaining, improved wages and working conditions etc. Keywords: formal, informal, workers and automobile industry. Cite this Article: Dr. Ipseeta Satpathy, Dr. B.C.M. Patnaik and Sri. Narayan Tripathy, A Study on workers in organized and unorganized sectors in Automobile Industry: A Review of Literature, International Journal of Mechanical Engineering and Technology, 9(5), 2018, pp INTRODUCTION Organized and unorganized sectors play a significant role towards the development of an economy. Country s growth mainly depends on these two sectors and out of these unorganized sectors contribution seems to be more in terms of participation of workforce. Like any other country, India has also witnessed the growth of these two sectors. These two editor@iaeme.com

2 A Study on workers in organized and unorganized sectors in Automobile Industry: A Review of Literature sectors have its own rules and regulations and thus make it unique. These sectors have its advantages and disadvantages. Movement of the workforce also varies and it has a direct link with the skills that the workers acquire through various sources. Traditionally, unskilled workers are moving towards unorganized sectors and skilled workers are moving towards organized sectors. Various organizations in automobile sector also become part of unorganized sector to bypass the stringent rules and regulations that they have to comply with. The history of automobile industry started about 4000 years ago when the first wheel was used for transportation. Indian automobile industry has come long way since the first car ran on the street in Mumbai Before independence India was considered as market for imported vehicles. The assembling of cars manufactured by General Motors and other leading brands was order of the day. This as the background it is important to judge the conditions of the workers in automobile industry with reference formal and informal sector. The present research is also focusing on the issue of the workers as, effective utilization of workforce and their socio economic aspect became an important issue for the economic growth of the country. Since, a mass workforce is working in these sectors, prior importance should be given so as to improve the conditions of the workforce. But before going into the details of the study it is important to analyze the existing body of research that may have been conducted by various researchers in the same field. This introduces the review of literature concept. 2. OBJECTIVES OF THE STUDY To understand existing scenario f workers in automobile industry To undertake study on working and living conditions of workers working in organized and unorganized sector of automobile sector. 3. METHODOLOGY For the purpose of study secondary data was considered Review of Literature from the Context of Socio Economic Aspects of the Workers in both the Sectors Mundle (2017) The authors focused on the living condition of the workers in formal and informal sector of the automobile sector. It was found that education and training plays an important role for the productivity. The social factors cannot be ignored. It should be addressed for improving the standard of living of the employees Kumar etal (2009) Social protection is a major issue for the employees working in formal and informal sector. Especially in the informal sector this is a major factor. In India more than 70% of workers engaged in the informal sector. The government should address the social security issues in automobile sector as well. In our country the rules and policies are made but these does not reach to the needy editor@iaeme.com

3 Dr. Ipseeta Satpathy, Dr. B.C.M. Patnaik and Sri. Narayan Tripathy Ray etal (2011) The informal sector plays an important role in the economic development of the country. Especially the street vendors contribute a lot to the urban population. These unorganised workers are being manipulated by the money lenders. There is a need for a group like SHG to help each other in case of financial need Ahmed etal (2014) This paper s main focus was on working condition and environment at work place. Most of the time unorganized sector have unhygienic working environment which leads to various medical needs and there is a decrease in productivity. There is a need for proper co-ordination between the employer and employee to improve the working environment Review of Literature from the Context of Working Environment Provided to the Workers in both the Sectors: Bhattacharya (2014) In this paper authors tries to give role played by the urban informal automobile sector workers in the urban politics. The workers living in the urban area having their own importance in the urban political economy in India. Sometimes they are targeted as vote bank by the various political parties. But when the question of basic need arises they do not get their right. These urban migrated workers being adjusted to this political environment Majumder (2014) In this paper the author tried to address the importance of informal sector. The growth of the country depends on the growth of this sector. When this informal sector which consists of majority of work force is being ignored then the development process will be affected. So it is important to understand the basic needs of this underprivileged section of the society Rajsekhar etal (2006) In this paper the authors tried to understand the security issues in formal and informal sectors of different sector including automobile sector. The majority of people feel that security means continuity of jobs. This is being misinterpreted by the workers in both formal and informal sector. They are not aware about the real benefits which they deserve under social security scheme Naik (2009) In this paper the authors tried to understand how the workers in informal sector leads total population in the under developed states and leads to poverty in that state. As these states are not able to provide adequate job opportunity that leads to these problem. The policy makers should take initiative to address this issue for resolving the problem Mbaye (2014) The major objective was how the informal sector can improve their quality of job, collection of taxes and foreign investment. There was focus on the informal sector to improve the cross border trade. There is need for simplicity in regulations for attracting the foreign disinvestments editor@iaeme.com

4 A Study on workers in organized and unorganized sectors in Automobile Industry: A Review of Literature 3.3. Review of Literature from the Context of Education and Skill Development Provided to the Workers in both the Sectors: Muwonge etal (2007) Has described the enhancing contributions of informal sector to the National development of Uganda in this working paper. This study also has examined the linkages between informal and formal economy of Uganda and also has depicted the size, contributions, and constraints of informal sector. According to the paper Uganda s formal sector is small in size compare to the informal sector and the linkages between formal and informal sector are very low in nature. In view of the authors there is a need to strengthen the linkages by means of the improvement of financial status of informal sector. Generally the businessmen of formal sector are very reluctant to enter business negotiations with the informal sector due to lack of educated people and lack of upgraded information of technology of informal economy. Rising poverty is the most important issue of the economy of Uganda. Clear policy and regulations are also absent. It can be seen that in Uganda informal economy is the main source of employment to a significant proportion of population. The contributions of informal economy can be enhanced through regular micro finance support, skill development and good infrastructure. There should be clear policy from the side of the government Raveendran (2015) There is a need for specific training program for the requirement of the workers in the informal sector and more specifically in the automobile sector. The government should take initiatives according to the training needs of the sector. This will strengthen the informal sector Unni (2005) In this article have discussed wages and income conditions of both formal and informal sectors of automobile sector in India and also depicted that how skill education is important to improve the condition of both the sectors. We can find out from the paper that formal sectors represent as a licensed organization and this sector is liable to pay taxes. It consists of all jobs with specific working hours and regular wages and the worker s job is assured. The workers are employed by the government, state or private sector enterprises. On the contrary, informal or unorganized sectors are the ones where the employees or the workers do not have regular working hours and wages and the workers are exempted from taxes. There have been some attempts to study the earnings differences between self and wage employment and within wage employed and self-employment. Informal sectors are considered as low with low production value. It has less remunerative, unlike the formal sectors which provides incentives such as bonuses, paid leave and fixed working hours. The issue of skills development in the informal sector needs to be tackled. It s the high time to introduce skills development in the informal sector to protect the bigger issues like unemployment, poverty etcetera Das etal (2015) In the working paper of IMF have discussed about the participation of women workers in the context of Indian economy. It has been stated that India has one of the lowest female labor force participation comparing with the other developing countries. In this case the gender in equality plays an important role in economic development and women participation in the work force. The MGNREGA program has included pro-women provisions as it seeks to ensure that at least 33 per cent of participating workers are women, and demand equal wages editor@iaeme.com

5 Dr. Ipseeta Satpathy, Dr. B.C.M. Patnaik and Sri. Narayan Tripathy for men and women. There is a large gap in the labor force participation rates of men and women in India. This gender gap should be narrowed to fully tie together India s demographic condition. A number of policy initiatives could be used to tackle this gender gap in Indian labor force participation. More and more women participation is needed for the development of the economy and for which vocational training is an important way to improve the skills of the women workers Ghani etal (2015) Have examined the employment growth of the informal sector in the context of Indian manufacturing sector. This paper has also find out the connections of the growth of manufacturing sector to rising women labour force participation. This paper has documented and analysed two interesting and under-appreciated facts about India s manufacturing growth such as manufacturing industry is more tradable industry and this sector provides more employment growth. It has been suggested that these features are most closely concurrent to the urbanization of informal Indian manufacturing sector. Rising female participation also appear to play notable roles, but the link to these is less strong than to urbanization. There is a need of effective Government participation to encourage women labour force. Education and basic skills are very much needed in this context Mannila (2015) In this chapter author has discussed about the informal market and its vulnerability in less developed market situations. Less developed market is referred to the markets of developing countries. The division of formal and informal employment is one kind of form of labour market segmentation. The vulnerabilities generally can be seen in less developed market and in the informal economy. Informal sector generally consist more population rather than informal sector in terms of job availability. But the formal sector is much more structured in terms of social security and condition of work place. Lack of education among the workers is a key differentiate factor between formal and informal sector. Vocational training is an important way to improve the skills of the workers. The key solution to the problem of informal employment is that informal workers should be registered, recognized and protected and they need to be educated National Human Development Report (2016) Has submitted a report regarding informal economy and the issues and challenges of automobile sector. Informal employment is a widespread phenomenon that characterizes not only underdeveloped countries with incompetent institutions and a lack of trust in the government. More than 60% of the total number of employed people globally is employed in the informal economy. Skills development in the informal sector is an issue of enormous importance. Rural and urban informal activities are rarely visualized within the same single economy. To improve the socio economic conditions of the informal economy the education system need to be changed and it needs to be exhaustive in nature. Health care should be more accessible, labour legislation should be more flexible and the regulatory framework should inspire towards formalization editor@iaeme.com

6 A Study on workers in organized and unorganized sectors in Automobile Industry: A Review of Literature 4. CONCLUDING OBSERVATION Through the present paper is was found that even though the automobile industry able to employ major part of employment but some basic problems needs to be addressed irrespective of formal and informal sector. These includes basic education, skill training, need for selfhelp group for collective bargaining, improved wages and working conditions, need for further strength for informal sector, need for change in education system, accessibility of health care system, long working hours and inadequate safety measures etc. REFERENCES [1] Sudipto Mundle (2017); Employment, Education and the State, NIPFP Working paper series, Working paper No. 188, National Institute of Public Finance and Policy, New Delhi, [2] Sunil Kumar & Bingguin Li (2009); Urban labour market changes and social protection for urban informal workers: challenges for China and India, Originally published in Wu, Fulong, (ed.) China's emerging cities: the making of new urbanism, Contemporary China series. Routledge, London, UK, 2007, pp , [3] Nazneen Ahmed & Nazneen Ahmed (2014); Improving wages and working conditions in the Bangladeshi garment sector: the role of horizontal and vertical relations, Working Paper 40, Capturing the Gains 2014, ISBN: [4] Rajesh Bhattacharya (2014); The Informal Sector: The Role Of Urban Commons, YOJANA October 2014, ISSN , Vol 58, pp [5] Ashima Majumdar (2014); Concept and Nature of Informal Sector, YOJANA October 2014, ISSN , Vol 58, pp [6] D.Rajasekhar and Suchitra J.Y (2006); Employment Security for the Unorganised Sector Workers in Karnataka, Institute for Social and Economic Change. [7] Ajaya Kumar Naik (2006); Informal Sector and Informal Workers in India, Session Number: Session 5a (Parallel), Paper Prepared for the Special IARIW-SAIM Conference on Measuring the Informal Economy in Developing Countries, Kathmandu, Nepal, September 23-26, [8] Abdu Muwonge, Dr Marios Obwona, Victoria Nambawaayo (2007); Enhancing Contributions of the Informal Sector to National Development: The case of Uganda, Occassional Paper no 33, Economic Policy Research Centre. [9] G.Raveendran (2015); Mapping National Definitions of Informal Employment to International Statistical Standards, WIEGO. [10] Jeemol Unni (2005); Wages and Incomes in Formal and Informal Sectors in India, the Indian Journal of Labour Economics, Vol. 48, No. 2, [11] Sonali Das, Sonali Jain-Chandra, Kalpana Kochhar, and Naresh Kumar (2015); Women Workers in India: Why So Few Among So Many? International Monetary Fund, IMF Working Paper, Asia and Pacific Department, WP/15/55 [12] Ejaz Ghani, William R. Kerr, Alex Segura (2015); Informal Tradable and the Employment Growth of Indian Manufacturing, Policy Research Working Paper, 7206, Macroeconomics and Fiscal Management Global Practice Group [13] Simo Mannila (2015); Informal Employment and Vulnerability in Less Developed Markets, Chapter 2, National Institute for Health and Welfare, Centre for International Affairs, Helsinki, Finland, Springer Science, Business Media Dordrecht 2015, DOI / _2 [14] National Human Development Report (2016); Informal Work: From Challenges to Solutions, Podgorica, 2016, ISBN , COBISS.CG-ID editor@iaeme.com

7 Dr. Ipseeta Satpathy, Dr. B.C.M. Patnaik and Sri. Narayan Tripathy [15] Swati Vijay. A study of Economical impact of Entry of organized retailers on unorganized retailers with special reference to Maharashtra state. International Journal of Management, 7(4), 2016, pp [16] Prof. Anantkumar D. Gadre and Dr. Rajiv M. Jadhao. A Study of Profession Related Problems Faced by Professionals in Informal (Unorganized) Sector of Nagpur District. International Journal of Management, 6(11), 2015, pp [17] Vijay.R.Kulkarni, A Study of the Impact of Retail Front Line Sales Personnel Behavior on Customer Buying Experience in Convenience Stores in Organized Retail in India, International Journal of Advanced Research in Management (IJARM), Volume 4, Issue 1, January- April 2013, pp [18] Vijay.R.Kulkarni, A Study of Impact of Merchandise Variety and Assostment on Shopping Experience of Customer Sin Convenience Stores in Organized Retail in India, International Journal of Management (IJM), Volume 4, Issue 1, January- February (2013), pp editor@iaeme.com