Introduction and transportation, among various other resources. However,

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 IntroductionWorld today, has nolimitations or barriers in the global exchange of goods, services and traderesulting in the integration of political, social and economic influence calledglobalization. Extensively, globalization embraces worldwide exchange of culture,technology, media, sports, communication, health facilities, education andtransportation, among various other resources. However, the initial process ofglobalization began with a need to institute global economic development. Theprocess of globalization originated to strengthen national economies by increasingglobal trade, international investments and capital exchange. However, themajor debate in globalization today is the effect on poverty and inequality,nationally as well as internationally (Perlman, 2007).

   The starting point ofglobalization can be traced back to the 1944 Bretton Woods Conference thatresulted in the formation of organizations such as World Bank, InternationalMonetary Fund (IMF) and the General Agreement on Tariffs and Trade (GATT) whichlater culminated in the establishment of the World Trade Organization (WTO) in1995 (Chandiramani, 2017). While the World Bank and the IMF support globaleconomy, WTO generated policies of trade liberalization. The main aim of theseorganizations was to promote economic cooperation worldwide, eliminateinternational trade and capital barriers, and alleviate poverty andunemployment. Benefitsand Costs of GlobalizationGlobalization led to thecreation of opportunities, especially in the developing countries, inattracting foreign investment and capital as well as generation of newemployment possibilities, on the national as well as international level. Formost of the developed nations, this enhanced possibility of Foreign DirectInvestment (FDI) by establishing franchises for services and industries inother countries. Also, transfer of goods and services across internationalborders helped in stabilizing the economic growth in many developing countriessuch as India, Brazil, Bangladesh and South Africa. The increase in employmentopportunities was also associated with increasing wages and better jobprospects for the informal work sector, in developing countries, thatpreviously relied on unorganized and uncertain employment, usually outside theregulations of government.

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However, the benefits ofglobalization were not equally shared by all sections of the society. Krugman(2007) defines a dark side to globalization due to rising economic inequalityin developing countries like Mexico, India, Bangladesh and Africa, whereimpacts of globalization has had both positive and negative effects to theeconomy. As trends in employment and trade patterns have changed to moreindustrial and service based purposes, there has been a decline in agriculturaland manufacturing related employment. Contrary to the belief in eliminatingpoverty and unemployment, the rise in service-sector employment has resulted ina massive surge of informal workers and labor work-force as well as increasingsocial disparities between different sections of the society.

The most severerepercussion of globalization is experienced by the marginalized groupsespecially in countries like India, Bangladesh and Africa, where agriculture andmanufacturing jobs were the main sources of livelihood for most of the lowerincome groups and improved global trade has had minimal effect on theireconomic growth. With increasing jobs inInformation Technology and other major service sectors, most of the industrialand manufacturing workers faced issues of unemployment as factories shut-downand the lack of skills and knowledge rendered them unable to compete for employmentopportunities in the service sectors. Hence, impact of globalization and tradeliberalization has negatively affected most of the employment opportunities formarginalized groups and resulted in an upsurge of the informal economy (Carrand Chen, 2001) especially in the developing world. Rise in InformalSectorHart (1973) coined theterm informal sector and defined it as urban employment outside the system ofpublic and private organizations and state regulations.

Global trade andliberalization policies cause widespread impact on employment relations andwork arrangement in developing and developed countries (Devi and Rani, n.d.).While some of those who were employed in the informal sector were able to findnew and better job prospects, others lost most of their livelihood. Most of theworkers also experienced decline in wages along with stagnating workingconditions (ibid.

). Although the concept of informal economy was prevailingeven before the beginning of globalization, especially in developing countrieswith most of the work force belonging in agricultural sectors, the rapidincrease of workers in this sector was a response to the decline ofagricultural employment which led to the rural-urban migration, and rise intechnology that reduced reliability on workers which caused profound impact onunemployment levels. As rural population declined, it resulted in the rise ofurban poverty within major cities. Developing countries suchas Africa, India, and Bangladesh, as well as various other South Asiancountries were the most affected due to rural-urban migration and rise ininformal economy. Instead of being the exporters of raw materials, thesecountries became the new market for Western manufacturers (Mezzadri, 2010). Informalizationin IndiaThe year 1991 marked the advancingmomentum of globalization in the Indian economy as an aftermath of a severeeconomic crisis during the 1980s due to monetary and capital disparity.

Indianeconomy before the 1990s lacked a consumer based market with no foreigninvestments or capital and was fundamentally a centralized and governmentcontrolled market. A Structural Adjustment Programme (SAP) was adopted as perthe directives of the World Bank in 1994, according to which the government hadto make amendments by liberalizing economic policies, phasing out governmentrule to more privatized public-sector organizations and reducing import andcustom duties to enable trade and exchange of capital, finance and goods andservices without restrictions (Cherukupalli, 2006) as well as provisions toreform the labor market was implemented. The immediate response of thesepolicy reforms was a boost to the Indian economy in terms of global trade andrising employment opportunities in various service and industrial sectors,thereby increasing social and economic interface with other nations.

Entrepreneurs, Industrialists and the major urban population of India reapedthe most benefits due to this policy transformation. However, it also led to profoundconsequences in the economic as well as social structure between the rich andthe poor. The positive effects of globalization of the Indian economy causednegative impacts on the poorer sections of the society. Withdrawal of governmentsupport from policy regulations and increasing privatization has made marginalizedgroups more vulnerable towards socio-economic rights. Being a democraticcountry, people are provided with the free will to elect their authoritiesbased on the trust that governance will be carried out in the interest of allthe people of the society. With the power structure being privatized, developmentand welfare policies are now controlled by those with wealth and power, thus,excluding and alienating the lower sections of the society (Menon, 2006).

Although,one of the key aims of globalization was to eliminate poverty and reduceunemployment, majority of the marginalized people still suffer from hunger,poverty and unemployment (ibid.). The advent of globalization in theIndian economy caused reforms in workers and labor policies as well. Laborstandards have been eased, tax regulations modified and moderate standards ofsecurity to attract more FDI had been implemented (Shah, 2017). Rise in foreigninvestment caused a change in the employment appointment with increased demandsfor temporary workers and contract labor (Bhosale, 2014) in the Indian informalemployment sector. The nature of these work provided income earningopportunities for the urban poor living in major developing cities of India andin search of employment prospects. UrbanPoor and the Informal EconomyThe Indian liberalization policieslifted license restrictions and industry subsidies, increasing competitivenessbetween firms by minimizing costs and increasing labor flexibility (Agarwala,2009).

The government issued policies that enabled firms to minimize employmentof permanent factory workers and hire more informal work force, which increasedthe number of informal workers among the urban poor in the Indian economy. Althoughthis initiative was taken in order to reduce unemployment and poverty among theurban poor, the government failed to address the prevailing economic and socialdisparity within the society. Since most of the urban poor in India areunregistered citizens, basic citizen rights are therefore not considered forthem.India’s informal economy mainlycomprises of the urban poor who migrated from rural and other peripheral areas,seeking informal work in the urban areas due to lack of employmentopportunities in the agricultural sector of rural villages.

As reported by theNational Statistical Commission in 2012, the informal sector in India accountsfor more than 90 per cent of the total work force of the country (Figure 1) andcontributes to 50 per cent of the national income. Their importance in thesocial and political structure has been continuously neglected. They are forcedto work in poor working conditions for minimum wages with no permanent jobsecurity. Most of these are workers are employed in construction andmanufacturing industries where demand for temporary work force is relativelyhigh. Low income and informal employment are one ofthe predominant characteristic of the urban poor households in India.

The informal sector is generallyassociated with unregulated, poorly skilled, low paid workers as compared toformal sector which comprises of regular and permanent employment with setregulations and provisions. Informal sector in India firstly constitutesemployment in formal work such as factories and manufacturing workshops, andsecondly self-employed workers such as street vendors and hawkers. Theseworkers mostly live in the shanty towns and slums of the urban areas wherebasic provisions like water, sanitation, healthcare and education facilities isnot available to them. Their low income proves to be insufficient in order tosustain their livelihood. Most of the government legislationsexclude informal workers provisions.

The 1948 Factories Act which covers basicsafety and health amenities along with ensuring proper working conditions doesnot apply to the informal workers (Hensman, 2001). Lack of governmentregulations in policy formulation and increasing role of privatizedinstitutions has thus created an imbalance in the provisions for informalworkers. Therefore, these workers are exempt from basic employment benefits andsocial security.

The informal work sector is anelemental part of the Indian streets where most of their entrepreneurial economicactivities take place. The streets are transformed into food joints, stripmall, fruit and vegetable market, garment and utility shops, and handicraftworkshops among many other activities. Apart from this, most of the urban poorare employed predominantly in construction and garment manufacturing industriesas well as in the rickshaw driving industry. Also, most of the urban poor womenfind employment in informal housekeeping for majority of the urban upper class.A dire monetary need and lack of financial stability coupled with noalternative employment opportunities, forces the urban poor to undertake workin the informal sector. Informal Workers in the ConstructionIndustryConstructionsector in India substantially contributes to the economic, infrastructure andurban growth and development of the country (Agarwala, 2009) and employs almost32 million informal workers (Hensman, 2001).

Most of these workers are migrantsfrom rural villages where decline in agriculture forced them to shift to urbanareas to secure their livelihood. These workers are often coerced to workwithout basic safety and health provisions. The workers are employed on contractbasis, wherein, after the completion of the work, their contracts with theemployer will be terminated. The largest employer in the construction industry ismainly the government which then allots private companies in carrying out worksfor roads, buildings and infrastructural facilities (Agarwala, 2009).

The workis carried out not only by men, but often women and children arealso employed. These workers work in deteriorating conditions with no fixedworking hours, lack of provision of safety equipment (Figure 2), disregardtowards their health and unavailability of water and sanitation facilities aswell as neglect of economic and social benefits such as paid leave andholidays. Many of them forego travelling back and forth from their house to theconstruction site so as to save money and create informal shacks near thesurrounding areas. The most common issue faced by them is instability ofemployment (Hensman, 2001).

The workers can be removed at the will of theemployer even during the construction process, therefore, leading touncertainty in the employment process. Labor rights such as the Minimum WageAct and Trade Union Rights do not apply to the workers which leaves themvulnerable. Informal Rickshaw PullersIn spite of significantly developedurban mobility in India, rickshaws are still considered the primary and viablemode of transport by both, the rich and poor. For the urban poor that lackskills required in most industrial and manufacture related jobs, rickshaw pullingis the most dominant informal work sector.

In major urban cities such as Delhi,Ahmedabad and Kolkata, rickshaws are the fastest growing informal labor market.As cities are growing and populationis expanding, rickshaws have also been increasing. However, the increasing numberof rickshaws does not only attribute to the growing demand of urban mobility,but also to the increasing number of urban poor who are facing risks ofunemployment (Samanta, 2016).

Although rickshaw pulling provides a much stableincome as compared to other informal works, the income generated is notsufficient to sustain livelihood. Most of the rickshaw drivers cannot affordbasic housing facilities (Figure 3) and hence use the rickshaws as their dailyabode. The contribution of the rickshaw drivers within theIndian economy is massive with no record of their value by the government(Samanta, 2016). Without basic service provisions for sustenance they arerendered vulnerable. Social security and benefits as well as proper workregulations are disregarded for them.

There are no fixed working hours and noregulated income. Their income is proportional to the number of passengers theycater to. Lack of state regulations has thus caused massive dependency on theinformal work sector.ConclusionThe introduction ofglobalization in the Indian economy caused adverse effects on the plight of theweaker sections of the society. Reforms in the trade and labor policies elevatedissues of poverty and unemployment rather than alleviating them. With the neweconomic reforms, state regulation receded, and the lack of formal andinstitutional regulations resulted in inflation of the informal economy workforce (Mezzadri, 2010). India’s urban poor ismainly employed in the informal sector which is categorized by low wages, poorworking conditions, lack of social security and low productivity (Siggel, 2010).The informal workers are central to the country’s economy and it is thereforenecessary that regulations by the government be implemented so as to promote improvedworking conditions, better employment opportunities, social security, regulatedincomes and basic workers rights.

With the integration of world economies,state authorities are divided between global economics and distribution ofauthority (Stiglitz, 2003). Thus, a system of governance and regulation at thenational level is important to alleviate the negative impacts of globalizationespecially on the urban poor.         ReferencesAgarwala,R. (2009), ‘An Economic Sociology of Informal Work: The Case of India’, In:Bandelj, N. (eds.), Research in the Sociology of Work, Emerald GroupPublishing Limited, BingleyBhosale,B. V.

(2014), ‘Informal Sector: Issues of Work and Livelihood’, Yojana,pp.36-39Carr,M. and Chen, M. A.

(2001), Globalization and the Informal Economy: HowGlobal Trade and Investment Impact on the Working Poor, International LabourOffice, GenevaChandiramani,N. (2017), ‘A Quarter Century of Globalization in India: Impact on Food andMedicines’, Democracy and Security Review, No. 4, pp.103-126Cherukupalli,A. (2006), ‘Impact of globalization on Indian Agriculture’, ARC 22 September,Internet Blog, Available at:

com/blog/2006/09/22/impact-of-globalization-on-indian-agriculture/>Accessed 13 January 2018Devi,U. and Rani, V. (n.d.), Informal Sector and Social Development in theContext of Globalization, online, Available at:

com/article/l154-Informal-Sector-And-Social-Development.html>Accessed 12 January 2018Hart,K. (1973), ‘Informal Income Opportunities and Urban Employment in Ghana’, TheJournal of Modern African Studies, Vol.

11, No. 1, pp.61-89Hensman,R. (2001), The Impact of Globalization on employment in India and responsesfrom the Formal and Informal Sectors, CLARA Working Paper No. 15, Availableat:

pdf>Krugman,P. (2007), ‘Divided Over Trade’, The New York Times, 14 May, online,Available at: <

html>Accessed 12 January 2018Menon,S. (2006) ‘Globalisation, state and disempowerment: study of farmers suicide inWarangal’, Munich Personal RePEc Archive, online, Available at:

net/publication/24112690_Globalisation_state_and_disempowerment_study_of_farmers_suicide_in_Warangal>Accessed 13 January 2018Mezzadri,A. (2010), ‘Globalisation, informalization and the state in the Indian garmentindustry’, International Review of Sociology, Vol. 20, No. 3, pp.491-511Mid-Day(2015), Navi Mumbai Metro, image, Available at: Accessed 13 January 2018NationalStatistical Commission Government of India (2012), Report of the Committeeon Unorganised Sector Statistics, New Delhi, p.1Perlman,J. E.

(2007), Globalization and the Urban Poor, United NationsUniversity-World Institute for Development Economics Research (UNU-WIDER),HelsinkiSamanta,G. (2016), ‘Mobility, Marginality, and the Cycle-Rickshaw in Indian Cities’,In: Dutt, A. K. and others (eds.), Spatial Diversity and Dynamics in Resourcesand Urban Development, Springer Science + Business Media, NetherlandsShah,S. (2017), ‘Impact of Globalisation on the Condition of Labour in India’, SociologyDiscussion, Internet Blog, Available at:

com/globalisation/impact-of-globalisation-on-the-condition-of-labour-in-india/1005>Accessed 12 January 2018Siggel,E. (2010), ‘The Indian informal sector: The impact of globalization and reform’,International Labour Review, Vol. 149, No. 1, pp.93-105Stiglitz,J. (2003), ‘Democratizing the International Monetary Fund and the World Bank:Governance and Accountability’, Governance: An International Journal of Policy,Administration, and Institutions, Vol. 16, No. 1, pp.111-139TheHindu Business Line (2013), The relative size of the informal sector in2009-10, image, Available at: Accessed 13 January 2018TheTimes of India (2017), Rickshaw Puller in Delhi, image, Available at:  Accessed 13 January 2018WorldBank (1994), Nigeria – Structural Adjustment Program: Policies, Implementation,and Impact (English), World Bank, Washington D.C., Available at:

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