Keeping in view the informal sector's share in the total workforce of the country, critically examine the relevant inclusive measures initiated by the Government of India and their effectiveness.

Significance of the Informal Sector

The informal sector plays a crucial role in the Indian economy:

• Employment Generation: It provides livelihood to a vast majority of the population, particularly vulnerable groups like women, Scheduled Castes, and Scheduled Tribes.
• Economic Contribution: Contributes significantly to the national GDP, though its exact share is difficult to ascertain due to data limitations.
• Entrepreneurship: Fosters self-employment and small-scale entrepreneurship, driving local economic growth.
• Flexibility & Resilience: Offers flexibility in labor markets and acts as a buffer during economic downturns.

Inclusive Measures Initiated by the Government

1. Social Security Measures

The government has launched several schemes to provide social security to informal sector workers:

• Pradhan Mantri Shram Yogi Maan-dhan (PMSYM) (2019): A pension scheme for unorganized workers with a monthly income of Rs. 15,000 or less.
• National Pension Scheme (NPS) for Self-Employed: Allows individuals working in the informal sector to contribute to a pension fund.
• Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PM-JAY) (2018): Provides health insurance coverage to vulnerable families, including those employed in the informal sector.

2. Financial Inclusion Measures

Efforts to enhance financial inclusion have been crucial for the informal sector:

• Pradhan Mantri Jan Dhan Yojana (PMJDY) (2014): Aimed at providing access to banking services, credit, insurance, and pensions. As of Feb 2024, over 51.8 crore accounts have been opened under PMJDY.
• Micro Units Development & Refinance Agency (MUDRA) (2015): Provides refinance support to microfinance institutions (MFIs) and Non-Banking Financial Companies (NBFCs) to lend to small businesses in the informal sector.
• Stand-Up India Scheme (2016): Promotes entrepreneurship among women and Scheduled Castes/Tribes by facilitating bank loans.

3. Skill Development & Livelihood Programs

The government has focused on enhancing the skills and employability of informal sector workers:

• Pradhan Mantri Kaushal Vikas Yojana (PMKVY): A flagship scheme for skill development, offering short-term training courses.
• National Rural Livelihoods Mission (NRLM) – Aajeevika: Focuses on organizing the rural poor, particularly women, into Self-Help Groups (SHGs) and providing them with livelihood opportunities.
• Deendayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM): Aims to provide livelihood support to urban poor.

Effectiveness and Challenges

While these measures represent significant steps towards inclusion, their effectiveness is hampered by several challenges:

• Low Awareness: Many informal sector workers are unaware of the available schemes and their benefits.
• Complex Procedures: Application processes and documentation requirements can be cumbersome for those with limited literacy and access to information.
• Implementation Gaps: Effective implementation at the grassroots level remains a challenge, with issues related to corruption and lack of coordination.
• Data Deficiencies: Lack of reliable data on the informal sector hinders targeted policy interventions.
• Sectoral Specificity: A ‘one-size-fits-all’ approach doesn’t address the diverse needs of different sub-sectors within the informal economy.

Scheme	Strengths	Weaknesses
PMJDY	Increased financial inclusion, access to banking services	High number of dormant accounts, limited credit access
MUDRA	Facilitated access to credit for micro-enterprises	High Non-Performing Assets (NPAs), concerns about loan recovery
PMKVY	Skill development, enhanced employability	Quality of training, placement rates, relevance to market demand