Structural Exclusion and Social Protection: A Critical Examination of India’s Urban Informal Workforce

Abstract

The urban informal sector in India maintains a crucial role in facilitating city life involving the formal sector, household jobs, development projects and sustainable living for the urban poor. Approximately 80% of the urban workforce is employed informally, contributing 45% to the GDP. However, these contributions remain unrecognised by legal and social security frameworks. Being unrecorded and excluded from policy frameworks for social protection exposes them to insecurity and exploitation, depriving them of well-deserved options for sustainable livelihood. To recognise and uplift the sector from vulnerabilities, the government introduced the E-Shram Portal, PM-SVANidhi and the Street Vendors Act to ensure financial inclusion and legal visibility. The policies face bureaucratic challenges, exposed to barriers in formalisation deterring small businesses from entering the formal sector and low awareness among the workers, reducing the impact of existing policies. For a country as dynamic and varied as India, a comprehensive and centralised set of policies for the informal urban workers is required to uplift their status while maintaining the essence of their nature of work.