Cabinet approves ILO resolution on transiting to formal economy

The cabinet on Wednesday approved the tabling in India's parliament for adoption of the International Labour Organization (ILO)-adopted recommendations "The Transition from the Informal to the Formal Economy (No.204)", a statement said here.

"The International Labour Conference of ILO at its 104th Session held in Geneva in June 2015 adopted the said recommendation. Its adoption was supported by India," a labour ministry statement said.

"The recommendation provides guidance to members (countries) to facilitate the transition of workers and economic units from the informal to the formal economy and promote creation, preservation and sustainability of enterprises and decent jobs in the formal economy and prevent informalisation of formal economy jobs," it added.

A study published in 2013 - "Capitalist Development in India's Informal Economy" - by Italian scholar Elisabetta Basile, showed a significant reduction in employment in the country's informal sector from 77 percent in 2004-05 to 71 percent in 2009-10.

Based on National Sample Survey Organisation (NSSO) data, Basile's study showed 93 percent of workers in rural and urban areas engaged in agricultural work excluding growing of crops (AGECG) in propreitory and partnership (p&p) enterprises.

It also notes that in rural areas, the most informalised sectors are manufacturing, wholesale and retail trade, and hotel and restaurants.