Economic Challenger - - CONTENTS - − S. Thirunavukarasu


The anatomy of In­dian econ­omy is of­ten de­scribed in terms of a vec­tor of sec­tors: pri­vate sec­tor, joint sec­tor, tiny sec­tor so on and so forth. To this list adds one more sec­tor the in­for­mal sec­tor. The in­for­mal sec­tor is a re­spectable des­ig­na­tion used by the econ­o­mists who have their own ways of cov­er­ing up ur­ban poverty by in­vent­ing rather neu­tral phrase­ol­ogy. The in­for­mal sec­tor plays a ma­jor role in In­dian econ­omy which be­gins to dom­i­nate in pro­vid­ing gain­ful em­ploy­ment op­por­tu­nity to mil­lions of peo­ple. It also con­trib­utes sig­nif­i­cant share to the na­tion’s out­put. It is es­ti­mated that two−fifths of Gross Domestic Prod­uct is gen­er­ated from the in­for­mal sec­tor and 90 per cent of the fam­i­lies are de­pend­ing on this sec­tor di­rectly and in­di­rectly for their sur­vival. The study of in­for­mal sec­tor has be­come in­creas­ingly pop­u­lar not only in Eco­nom­ics but also in So­ci­ol­ogy and An­thro­pol­ogy. Heith Hart was the first per­son to in­tro­duce the term "in­for­mal sec­tor". The in­for­mal di­chotomy was also first used by Heith Hart while mak­ing a pre­sen­ta­tion on "in­for­mal in­come op­por­tu­ni­ties and ur­ban em­ploy­ment in Ghana in the In­sti­tute of Devel­op­ment Stud­ies (IDS) at a con­fer­ence (1971) coor­gan­ised by Rita Cruise O’ Brien and Richard Jolly on ur­ban em­ploy­ment in Africa, months be­fore In­ter­na­tional Labour Or­ga­ni­za­tion (ILO) em­ploy­ment mis­sion to Kenya came with its report "Em­ploy­ment, In­comes and Equal­ity".

Sethu­ra­man (1998) ar­gued that such a di­chotomy into for­mal and in­for­mal is but a car­i­ca­ture of real econ­omy, be­cause both for­mal and in­for­mal parts ex­hibit con­sid­er­able di­ver­sity. The ex­is­tence of the in­for­mal econ­omy com­pli­cates anal­y­sis of eco­nomic and so­cial sys­tems. In­for­mal ac­tiv­ity in the de­vel­op­ing world is pri­mar­ily an un­reg­u­lated but pro­duc­tive ac­tiv­ity, gen­er­ally seen as a sur­vival ac­tiv­ity of the poor.

In the devel­oped world, this kind of ac­tiv­ity is rel­a­tively small. An el­e­ment of il­le­gal­ity is usu­ally present in the in­for­mal ac­tiv­ity in devel­oped coun­tries, most of­ten tax eva­sion in pro­duc­tion and distri­bu­tion. The in­for­mal ac­tiv­ity is un­paid house­hold work, which again has en­gaged greater at­ten­tion in devel­oped coun­tries. Ac­cord­ing to Vis­aria (1966), the in­for­mal econ­omy in In­dia em­ploys about 90 per­cent of the coun­try’s work­force and 97 per­cent of its women work­ers. Many of th­ese work­ers are pri­mary earn­ers for their fam­i­lies. Their earn­ings are nec­es­sary for their sheer sur­vival.

In In­dia, ac­cord­ing to the Na­tional Sam­ple Sur­vey 1999−2000, the to­tal work­force is in the or­der of 406 mil­lion, of which only 7 per­cent of work­force is em­ployed in the for­mal or or­ga­nized sec­tor while re­main­ing 93 per­cent of work force is in the in­for­mal or un­or­ga­nized sec­tor. Most of the in­for­mal em­ploy­ment may be sim­i­lar to for­mal em­ploy­ment in terms of work done, with the dif­fer­ence that it is per­formed with­out reg­u­lar con­tracts, gen­er­ally for small and un­reg­is­tered en­ter­prises and within a dif­fer­ent sys­tem of in­cen­tives and con­trols. But, there are cat­e­gories of in­for­mal em­ploy­ment that do not have a coun­ter­part within for­mal sys­tem. Th­ese in­clude self − em­ployed work­ers such as home based work­ers, street ven­dors, dairy­ing, iron­ing, bar­ber, waste col­lec­tors, cob­bler, shoe shiner, rick­shaw pullers and so on.

Char­ac­ter­is­tics of in­for­mal econ­omy

The ab­sence of of­fi­cial pro­tec­tion and recog­ni­tion, cov­er­age of min­i­mum wage leg­is­la­tion and so­cial se­cu­rity sys­tem, pre­dom­i­nance of own−ac­count and self em­ploy­ment work, low, rare and ir­reg­u­lar in­come, lit­tle job se­cu­rity, no fringe ben­e­fits from in­sti­tu­tional sources, work­ing hours are ir­reg­u­lar, there is no per­ma­nent place for their work, ab­sence of re­stric­tive stan­dards and reg­u­la­tions and state aid is al­most nil.

Causes of in­for­mal econ­omy

The devel­op­ment in the Third world dur­ing the sec­ond half of the Twen­ti­eth cen­tury as­sumed un­prece­dented growth of pop­u­la­tion and Labour force notably in large cities. Lewis, Fei, and Rains, in their two sec­tor model for the devel­op­ment of labour force in th­ese over­pop­u­lated de­vel­op­ing coun­tries, ar­gued that the sur­plus labour from the agri­cul­tural sec­tor would be grad­u­ally ab­sorbed in the dy­namic ur­ban econ­omy as in­dus­trial sec­tor ex­pands, con­trary to this as­sump­tion, the rate of em­ploy­ment cre­ation failed to keep pace with the high and ris­ing rates of growth of labour force.

In other words, the labour ab­sorp­tion ca­pac­ity of the in­dus­trial sec­tor be­came more slug­gish than one as­sumed. It is be­cause process of in­dus­tri­al­iza­tion adopted by most of the de­vel­op­ing coun­tries ba­si­cally is cap­i­tal in­ten­sive as is in the case of devel­oped coun­tries. The labour in­ten­sive ac­tiv­i­ties alone could be the ma­jor alternative for a coun­try like In­dia.


Labour­ers in ur­ban in­for­mal sec­tor are not able to pro­tect their in­ter­ests due to lack of or­ga­ni­za­tion. The ba­sic prob­lem is small size of en­ter­prises and scat­tered labour with di­verse in­ter­ests which makes the or­ga­ni­za­tion of labour dif­fi­cult. The ba­sic dif­fi­cul­ties are: " Ab­sence of clear em­ployee em­ployer re­la­tions leaves th­ese work­ers in flex­i­ble struc­tures. The re­la­tion­ship varies from one em­ploy­ment to an­other em­ploy­ment. Fur­ther their work­ing in very small scat­tered units makes the mo­bi­liza­tion and or­ga­ni­za­tion ex­tremely dif­fi­cult.

A large sec­tion of th­ese work­ers has lit­tle ed­u­ca­tion and poor skills. Work­ers are un­able to en­joy ac­cess to in­sti­tu­tional credit and other fa­cil­i­ties. Many of the work­ers, es­pe­cially women work­ers, are ex­ploited with low wages and bad work­ing con­di­tions. Preva­lence of child labour and its ex­ploita­tion. Ab­sence of any type of so­cial se­cu­rity. Poor liv­ing con­di­tions with most of them liv­ing in slums, un­der un­hy­gienic work­ing con­di­tions. Lit­tle ac­cess to for­mal and in­for­mal ed­u­ca­tion. Lack of po­lit­i­cal and so­cial will to in­flu­ence poli­cies and plans. De­pen­dence of kin­ship, caste, re­gional ties for em­ploy­ment and sur­vival. Lack of equal wages for equal work for men and women and low wages for hard work.


Waste col­lec­tion in In­dia goes back to the 17th cen­tury, where bones, rags and pa­per were among the first com­modi­ties to be col­lected. The caste sys­tem in In­dian so­ci­ety, which con­tin­ues to ex­ist, is a de­ter­min­ing fac­tor in the solid waste man­age­ment sys­tem. Waste pick­ing, along with any work re­lated to garbage or the han­dling of car­casses and hu­man exc­reta is tra­di­tion­ally bound with the low­est caste. The his­tor­i­cal ev­i­dence of the im­mi­gra­tion of low caste work­ers to Delhi dur­ing the war was due to short­age of labour to han­dle waste in the city due to which many Bangladeshi mi­grants and their fam­i­lies have also been work­ing in the field of waste. Be­cause of their involvement and filthy work en­vi­ron­ment, the oc­cu­pa­tion of waste pick­ing has tra­di­tion­ally been held in low es­teem by the pop­u­la­tion and by po­lit­i­cal de­ci­sion mak­ers.

There is no other so­cial cat­e­gory which has been pre­pared to start waste pick­ing, even in times of poverty and hard­ship, which of­fers at least some de­gree of guar­an­teed job se­cu­rity to waste col­lec­tors in In­dia.

Mean­ing of waste col­lec­tor

The term waste col­lec­tor is a per­son em­ployed by a pub­lic or pri­vate en­ter­prise to col­lect and re­move from res­i­den­tial, com­mer­cial, in­dus­trial or other col­lec­tion sites for fur­ther pro­cess­ing and dis­posal. Spe­cial­ized waste col­lec­tion ve­hi­cles fea­tur­ing an ar­ray of au­to­mated func­tions are of­ten de­ployed to as­sist waste col­lec­tors in re­duc­ing col­lec­tion and trans­port­ing time.

The term "waste col­lec­tor" com­monly refers to the task of ex­tract­ing re­us­able or recyclable ma­te­ri­als from mixed wastes. Many waste col­lec­tors also sort or seg­re­gate waste and sell it fur­ther up to the re­cy­cling chain.

Ac­cord­ing to Sam­son, the term waste col­lec­tors can be broadly de­fined as peo­ple who re­claim "re­us­able ma­te­ri­als from what oth­ers have cast aside as waste".


Nowa­days the large num­ber of poor peo­ple is as­so­ci­ated with the waste man­age­ment in In­dia. The re­cent study es­ti­mates that about 1 to 2 per­cent of the ur­ban pop­u­la­tion in In­dia is ac­tive in the in­for­mal re­cy­cling sec­tor. The in­for­mal waste sec­tor is so­cially strat­i­fied in a pyra­mid with scrap col­lec­tors at the bot­tom and re−pro­ces­sors at the top.

The in­for­mal waste col­lec­tor sec­tor really con­sti­tutes the hard work­ing poor whose toils are dis­pro­por­tion­ately larger to their earn­ings. The earn­ings of waste col­lec­tors vary form coun­try to coun­try, type of work they do and for women and men. Af­ter a whole day’s hard labour, a worker earns about Rs.40 com­pared to above Rs.160 the wage rate per day pre­vail­ing in the for­mal sec­tor. The in­for­mal waste col­lec­tors are vul­ner­a­ble to ex­ploita­tion by the mid­dle­men who buy re­cov­ered waste ma­te­ri­als from them be­fore sell­ing to in­dus­try. The In­dian waste col­lec­tors can re­ceive as low as 5%of the price, in­dus­try pays for re­cy­clables, mid­dle­men get­ting more gain in this busi­ness. Gen­er­ally waste col­lec­tors have low in­come, lack of drink­ing water, poor san­i­ta­tion and other ba­sic in­fra­struc­ture. As a re­sult of their poor liv­ing con­di­tions and na­ture of work, the waste col­lec­tors face many prob­lems.


The in­for­mal waste col­lec­tors face tremen­dous health and safety risks like ex­treme tem­per­a­tures, wind, rain, sun, fae­cal, an­i­mal car­casses, bro­ken glass, nee­dles, sharp ma­te­rial ob­jects, above all, dis­eases trans­mit­ted by ver­min, flies and masquitoes, back pain and limp pain, skin ir­ri­ta­tion and rashes and spe­cific high risk tu­ber­cu­lo­sis, bron­chi­tis, asthma, pneu­mo­nia, dysen­tery and par­a­sites. It comes as no sur­prise; high in­fant mor­tal­ity rates and low ex­pectan­cies are com­mon prob­lems in the life of waste col­lec­tors. In ad­di­tion, pub­lic au­thor­i­ties of­ten treat them as nui­sances, em­bar­rass­ments, or even crim­i­nals. They tend to have low so­cial sta­tus and face pub­lic scorn, ha­rass­ment and oc­ca­sional vi­o­lence. They are treated as nui­sances by au­thor­i­ties and with dis­dain by the pub­lic and they are ig­nored by pub­lic pol­icy pro­cesses and thus they fre­quently suf­fer men­tally and phys­i­cally.

In re­cent times, pri­va­ti­za­tion of mu­nic­i­pal solid waste man­age­ment ser­vices threat­ens the za­baleen com­mu­nity of waste col­lec­tors in many cities in In­dia. The global re­ces­sion has hit waste col­lec­tors hard and the global ap­proaches to change mit­i­ga­tion, such as fund­ing for in­cin­er­a­tors and waste−to− en­ergy plants that burn ma­te­ri­als which waste col­lec­tors could oth­er­wise re­cy­cle, threaten rather than re­ward waste col­lec­tors.


Mil­lions of peo­ple world­wide make a liv­ing by col­lect­ing, sort­ing and sell­ing ma­te­ri­als that oth­ers have thrown away. They are vi­tal ac­tors of in­for­mal econ­omy. The in­for­mal waste col­lec­tors per­form an es­sen­tial role in the economies and so­ci­eties of de­vel­op­ing coun­tries at large. Waste col­lec­tors pro­vide wide­spread ben­e­fits to their com­mu­ni­ties, mu­nic­i­pal­i­ties and the en­vi­ron­ment.

1. Source of em­ploy­ment and in­come

For many peo­ple in de­vel­op­ing coun­tries, es­pe­cially those with lim­ited ed­u­ca­tion or

op­por­tu­ni­ties, waste col­lec­tion of­fers a liveli­hood. The waste col­lec­tion work is the main source of em­ploy­ment and in­come of the ur­ban poor in In­dia, be­cause they are af­fected by the prob­lem of un­em­ploy­ment. The World Bank es­ti­mates that nearly 1 per­cent of the ur­ban pop­u­la­tion in de­vel­op­ing coun­tries earns a liv­ing through waste col­lec­tion or process of re­cy­cling. A more re­cent study in In­dia es­ti­mates that waste col­lec­tors are num­ber­ing 1.5 mil­lion, pri­mar­ily women and those from so­cially marginal­ized group.

2. Raw ma­te­rial for in­dus­trial sec­tor

The waste col­lec­tions of ma­te­ri­als are im­por­tant raw ma­te­rial for in­dus­trial sec­tor in de­vel­op­ing coun­tries. In­dia is an in­dus­tri­ally de­vel­op­ing coun­try. It im­por­tantly needs more in­vest­ment and raw ma­te­ri­als in low cost. But the main prob­lems of the in­dus­trial sec­tor is non− avail­abil­ity of raw ma­te­ri­als. The waste col­lec­tors pro­vide in­ex­pen­sive re­cy­cled ma­te­ri­als to in­dus­tries; this re­duces the need for ex­pen­sive im­ports. Bot­tles, waste pa­pers, plas­tic dam­aged ma­te­ri­als are the main things in the col­lec­tion of wastes by the ur­ban poor.

3. Mu­nic­i­pal ex­penses are re­duced

The in­for­mal sub­si­diza­tion of solid waste man­age­ment sys­tems has re­duced the mu­nic­i­pal ex­penses. Waste col­lec­tors re­duce the amount of waste that needs to be col­lected, trans­ported and dis­posed of with pub­lic funds and they save each city in In­dia at least Rs.50 lakh per year.

4. En­vi­ron­men­tal sus­tain­abil­ity

Waste col­lec­tors are work­ing for their daily wages, but they are im­prov­ing the en­vi­ron­ment. Most of the ur­ban ar­eas are af­fected by pol­lu­tion; it af­fects the health and san­i­ta­tion of hu­man be­ings. In­for­mal waste col­lec­tors play an im­por­tant role in re­mov­ing wastes and im­prov­ing the wel­fare of the peo­ple.

The waste col­lec­tion work con­trib­utes to en­vi­ron­men­tal sus­tain­abil­ity. In many cities in In­dia, in­for­mal waste col­lec­tion and re­cy­cling is the only kind of re­cy­cling that oc­curs at all. It de­creases the amount of vir­gin ma­te­ri­als used by in­dus­tries, stores, house­holds, ho­tels, mar­kets etc, thereby con­serv­ing nat­u­ral re­sources and en­ergy while re­duc­ing air and water pol­lu­tion. It also re­duces the amount of land that is needed for dumps and land­fills.


The in­for­mal waste col­lec­tors are eco­nom­i­cally, so­cially and po­lit­i­cally poor. Their stan­dard of liv­ing can be im­proved by var­i­ous plans and schemes of the government. The com­mon de­mands of the waste col­lec­tors are large. They are, iden­ti­fi­ca­tion, recog­ni­tion and iden­tity cards, right to work or have ac­cess to waste, pro­vi­sion of sites to sell waste, pro­vi­sion of fa­cil­i­ties for col­lec­tion and sort­ing of waste, san­i­tary and stor­age fa­cil­i­ties, health­care and so­cial se­cu­rity pro­vi­sons, credit or loan fa­cil­i­ties, grant­ing of rights to col­lect scrap for re­cy­cling, pro­vi­sions of drink­ing water, toi­let, creche fa­cil­i­ties at dump­ing grounds and land fill sites, child labour should not be al­lowed, in­sti­tu­tion­al­iz­ing in­for­mal waste col­lec­tors into doorstep or other col­lec­tion, en­cour­age­ment and sup­port for or­ga­ni­za­tions of waste col­lec­tors fi­nan­cial and non fi­nan­cial. They are also de­mand­ing bet­ter en­force­ment of so­cial se­cu­rity

schemes of the state and na­tional poli­cies for pro­mot­ing solid waste man­age­ment.

Or­ga­ni­za­tional de­vel­op­ments for the in­for­mal waste col­lec­tors

Waste col­lec­tors, known for their in­de­pen­dence and in­di­vid­u­al­ism, are in­creas­ingly mo­ti­vat­ing to or­ga­nize and fight for recog­ni­tion within a for­mal waste man­age­ment sys­tem. They are or­ga­niz­ing in many dif­fer­ent ways like co­op­er­a­tives, as­so­ci­a­tions, com­pa­nies, unions, mi­cro−en­ter­prises etc., some are even form­ing " women only" or­ga­ni­za­tions in or­der to bet­ter con­front gen­der in­equal­i­ties. Since 1972, many ef­forts have been made by NGOs to or­ga­nize the waste col­lec­tors, but the re­sults do not yet ex­tend across In­dia, due to the pre­dom­i­nance of women in waste col­lec­tion. Women or­ga­ni­za­tions were the first to cast light on waste col­lec­tors and their in­ter­ests. Th­ese ap­proaches en­cour­aged waste col­lec­tors to change to work which is less de­mean­ing to their dig­nity and less haz­ardous to their health. In 1990 the Project for the Em­pow­er­ment of Waste Col­lec­tors of the Women’s Univer­sity in Pune in West­ern In­dia started or­ga­niz­ing waste col­lec­tors on their work is­sues. In sub­se­quent years waste col­lec­tor or­ga­ni­za­tions were formed in Delhi, Ban­ga­lore and other cities.

All of the or­ga­ni­za­tions un­der­scored the value and the work of in­for­mal sec­tor waste col­lec­tors. The Swavlam­ban So­cial Se­cu­rity Pen­sion Scheme for the in­for­mal work­ers has been en­acted by the cen­tral government on 9th Au­gust 2010 for the wel­fare of the in­for­mal sec­tor work­ers in­clud­ing waste col­lec­tors. The Indira Gandhi Na­tional Old Age Pen­sion Scheme fa­cil­i­tates the Be­low Poverty Line peo­ple aged be­tween 60 to 80 year to get pen­sion of Rs 500 per month. The or­ga­ni­za­tional and the government sup­port in­creases the so­cial sta­tus, self es­teem, in­come, qual­ity of life, work­ing con­di­tions, bet­ter health qual­ity, devel­op­ment of net­works, preven­tion of ha­rass­ment, vi­o­lence and thus elim­i­nates the child labour.


There are mil­lions of waste col­lec­tors world­wide, but lit­tle re­li­able so­cio−eco­nomic or sta­tis­ti­cal in­for­ma­tion ex­ists. Most stud­ies are qual­i­ta­tive and a few quan­ti­ta­tive stud­ies also ex­ist. Since waste col­lec­tors are mo­bile and their pop­u­la­tion can fre­quently fluc­tu­ate by sea­son, es­ti­ma­tion of their to­tal pop­u­la­tion is dif­fi­cult and mak­ing it harder to the re­searchers to col­lect sound data. The growth of pop­u­la­tion, in­dus­tries and changes in the liv­ing style of the peo­ple lead to an in­crease in the waste all over the world. Par­tic­u­larly in In­dia it is also a big­gest prob­lem to the flora and fauna. On the other side it cre­ates more em­ploy­ment op­por­tu­ni­ties for the poor. Hence, the waste col­lec­tors should be en­cour­aged by the government by ful­fill­ing the de­mand of th­ese peo­ple to pro­tect their stan­dard of liv­ing and the en­vi­ron­ment of In­dia.


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2. Adhikari M. (2009), Eco­nomic En­vi­ron­ment of Busi­ness− Sul­tan chand & sons, New Delhi. P−308,

3. Bhat­tacharya K.P. and P.Dey, "Prob­lems of hawk­ers in Cal­cutta: A case study’ the In­dian jour­nal of So­cial Sci­ence, Vol.4, No.2, 1991.

4. Civil Ser­vice Chron­i­cle. (April 2011), p−77, No.5, Vol.22.

5. Babu, G.Ravichan­dra (June 2009), ’So­cio− Eco­nomic Con­di­tions of In­for­mal Work­ers: A study’, South­ern Econ­o­mist, Vol.48, No.3, pp−23−25.

6. Jolly, R. Singer, Hans: (May 2006).The Gen­tle Gi­ant’, Pre­sented as a lec­ture in Geneva in the ILO.

7.­for­mal waste col­lec­tor in In­

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