Challenges and Realities of Women in India’s Unorganised Sector

When we discuss India’s economy, headlines often focus on tech parks, factory output, or the latest unicorn startup. Yet a quieter, far larger story plays out on construction sites, in narrow lanes where vendors sell vegetables, and in homes where women roll beedis or stitch garments for piece-rate wages. The vast majority of India’s working women earn their living here, in the unorganised sector, often invisible to official statistics and legal protections. Understanding their reality is essential to understanding the Indian economy itself.

Institutionalized versus non-institutionalized sectors
What the Shram Shakti Report revealed
Where women actually work
Home-based work
Petty vendors and street sellers
Manual and casual labour
Employment trends and the absence of social security
Gender-based wage disparities
Job insecurity and the double burden
The struggle to unionise
Policy responses and gaps
Why this matters for the economy

Institutionalized versus non-institutionalized sectors

The Indian workforce is broadly split into two categories. The institutionalized or organised sector covers enterprises that are registered, follow labour laws, deduct provident fund, issue appointment letters, and provide measurable job security. Government offices, banks, large factories, and most multinational corporations fall here. The non-institutionalized or unorganised sector, by contrast, includes work that is neither registered nor regulated. It encompasses home-based labour, street vending, domestic work, agricultural labour, construction, small workshops, and a wide range of self-employment activities.

The scale of this divide is staggering. According to the final report of India’s National Commission for Enterprises in the Unorganised Sector, workers in the informal sector constitute more than 93 percent of the total workforce, and they do so without job security, income security, or social security. For women, this concentration is even sharper.

What the Shram Shakti Report revealed

The most influential document on this subject remains the Shramshakti Report of 1988, prepared by the National Commission on Self-Employed Women and Women in the Informal Sector under the chairpersonship of Ela R. Bhatt. The Commission travelled across the country, holding public hearings and visiting worksites to document women’s working lives. It found that the overwhelming majority of women workers were concentrated in the unorganised sector with very low bargaining power and almost no institutional backing. The report is widely cited for establishing that around 94% of women workers in India belong to the unorganised sector, while only a small fraction work in organised establishments.

The Commission did more than tabulate numbers. Its members recorded testimonies of women earning as little as a few paise per piece, working long hours in poor conditions, often without identity as “workers” at all. The report pushed the country to formally recognise self-employed and home-based women as part of the labour force, a recognition that had long been denied in official policy.

Where women actually work

The unorganised sector is not a single workplace but a patchwork of occupations. Understanding the specific kinds of work women do helps explain why their challenges are so layered.

Home-based work

Home-based work is one of the largest categories. Women roll beedis, stitch garments, assemble incense sticks, pack spices, peel cashews, do embroidery, and produce countless other goods from their homes, usually on piece-rate wages set by middlemen. A recent analysis estimates that around 17.19 million women in India are engaged in home-based work, with about 12.48 million in non-agricultural activities. The same study notes that women in this segment earn roughly Rs. 24 per hour, while men earn around Rs. 48 per hour, with both figures often falling below the recommended minimum wage. Because the work happens inside the household, it is frequently treated as an extension of domestic chores rather than as economic production.

Petty vendors and street sellers

Street vending is another major employer. Women sell vegetables, flowers, fish, snacks, and household goods from baskets, carts, or temporary stalls. Their incomes depend on daily footfall, weather, and the goodwill of municipal authorities. As one analysis points out, a street vendor can lose her selling spot during municipal raids without warning, and a domestic worker can be dismissed instantly without notice or severance pay. There is no contract to fall back on, no notice period, no grievance mechanism.

Manual and casual labour

Construction sites across Indian cities employ millions of women as head-load carriers, brick-makers, and unskilled helpers. In rural areas, women work as agricultural labourers during sowing, weeding, and harvesting. Domestic work is yet another huge segment; data from the E-Shram portal shows that women hold roughly 96 percent of domestic and household work registrations, while men account for around 4 percent. Across all these jobs, the common thread is daily wage payments, no written contract, and no protection against arbitrary dismissal.

Several patterns recur across the informal economy. The first is the sheer disparity in earnings. An IMF working paper on women in the Indian labour market reports that the daily wage for women in formal jobs is over four times as high as for women in informal jobs. The same paper notes that the unorganised sector accounts for roughly 90 percent of manufacturing establishments in India, indicating how thinly formal protections actually reach the manufacturing workforce.

The second pattern is the near-total absence of social security. Most labour laws apply only to establishments with a minimum number of employees, leaving home-based workers, street vendors, and domestic helpers outside their coverage. Maternity benefits, for example, apply to establishments with more than ten employees, which means that child-bearing leads to wage loss for most informal sector workers since they are not protected by maternity benefit laws. Provident fund, pension, paid leave, and health insurance are similarly out of reach.

The third pattern is high vulnerability to shocks. During the COVID-19 lockdowns, informal women workers were among the worst affected. Reports tracking the period show that more than 52 percent of women workers lost wages due to non-payment in the initial lockdown phases, leading to depleted savings, reduced food intake, and new household debt. With no employer-provided cushion and no easy access to government relief, the costs of any crisis fell directly on individual families.

Gender-based wage disparities

Even within the informal economy, women earn less than men for comparable work. The Self-Employed Women’s Association has documented this gap repeatedly; one widely cited estimate places the average wage of women workers at around Rs. 1,815 compared to Rs. 3,842 for men. Several factors drive this disparity. Women are clustered in lower-paid occupations such as domestic work, home-based piecework, and care work, which the labour market consistently undervalues. Wages are often set per piece rather than per hour, and the rates have changed little over years despite inflation.

The urban-rural divide deepens the gap. As one industry-focused review notes, over 60% of rural women work in informal sectors, facing weak enforcement of wage laws and minimal benefits. Discrimination on the basis of caste and community further compounds the disadvantage, with Dalit and Adivasi women often pushed into the lowest-paying and most physically demanding occupations.

Job insecurity and the double burden

Job security in the unorganised sector is essentially non-existent. Work is contractual at best, casual at worst, and arrangements can end with a single sentence from an employer or contractor. On top of paid work, women carry the unpaid load of cooking, cleaning, child care, and elder care at home. Researchers describe this as the double burden: socially productive labour outside the home and reproductive labour within it. The pressure is constant, and time-use surveys consistently show women working longer total hours than men once unpaid work is counted.

The struggle to unionise

Trade unions have historically been built around the organised sector, where workers gather in a single workplace, hold formal employment contracts, and identify common employers. Informal women workers fit none of these patterns. A home-based beedi roller, a domestic worker travelling between three households, and a street vendor in a daily market do not share an employer, a workplace, or even a fixed schedule.

This fragmentation makes collective bargaining extremely difficult. Studies note that the workplace itself is scattered and fragmented, leaving women without training, without channels to negotiate, and often without awareness of the laws meant to protect them. Initiatives like the Self-Employed Women’s Association in Gujarat have shown that informal women workers can organise effectively when offered the right structures, combining union functions with cooperative banking, child care, and skill training. Still, such organisations cover only a fraction of the total female informal workforce.

Policy responses and gaps

The Government of India has tried to extend some protections to unorganised workers through legislation like the Unorganised Workers’ Social Security Act of 2008 and, more recently, the Code on Social Security of 2020. The new Code recognises and registers unorganised, home-based, self-employed, gig, and platform workers, expanding the definition of “worker” to include these groups for the first time in a unified framework. The E-Shram portal has been launched to register unorganised workers and link them to welfare schemes.

Implementation, however, remains uneven. Identification, awareness, and actual delivery of benefits are still significant hurdles. An estimated 92.1% of women are engaged in informal employment, with rural women at around 93.1%, which gives a sense of how far policy still has to travel to reach the women it claims to serve. Without strong wage enforcement, accessible registration, and recognition of unpaid care work, formal recognition risks remaining on paper.

Why this matters for the economy

Women in the unorganised sector are not a marginal labour pool. They cook food sold by roadside vendors, sort waste that feeds the recycling chain, stitch garments exported across the world, and supply the daily labour that keeps cities running. Their work cross-subsidises the formal economy, which relies on cheap goods, cheap services, and cheap care. Recognising their economic contribution is not only a question of fairness but of accurate national accounting. As long as their wages, conditions, and security remain invisible, both economic policy and social policy will continue to miss the people who do the most work for the least reward.

What do you think? If 94 percent of women workers are in the unorganised sector, what would it really take to make labour law, social security, and minimum wages reach them in practice? And how should the unpaid care work women do at home be counted when we measure the size of the economy?

References

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Challenges and Realities of Women in India’s Unorganised Sector

Table of Contents

Institutionalized versus non-institutionalized sectors 🔗

What the Shram Shakti Report revealed 🔗

Where women actually work 🔗

Home-based work 🔗

Petty vendors and street sellers 🔗

Manual and casual labour 🔗

Employment trends and the absence of social security 🔗

Gender-based wage disparities 🔗

Job insecurity and the double burden 🔗

The struggle to unionise 🔗

Policy responses and gaps 🔗

Why this matters for the economy 🔗