What are unorganised markets?

Many have asked us over the months, what do we mean by “unorganised markets”. Here are some definitions which will make it clear:

1. “enterprises owned by households, i.e. as a subset of production units which are not constituted as separate legal entities independently of the households or household members who own them, and for which no complete sets of accounts (including balance sheets of assets and liabilities) are available which would permit a clear distinction of the production activities of the enterprises from the other activities of their owners and the identification of any flows of income and capital between the enterprises and the owners.” - Fifteenth International Conference of Labour Statisticians (ICLS). [1]
2. “Unorganized Sector Worker means a person who works for wages or income; directly or through any agency or contractor; or who works on his own or her own account or is self employed; in any place of work including his or her home, field or any public place; and who is not availing of benefits under the ESIC Act and the P.F Act, individual insurance and pension schemes of LIC, private insurance companies, or other benefits as decided by the Authority from time to time.” – Government of India. [2]

Some common queries concerning the unorganised sector have been answered below:

Is unorganised sector restricted to any particular industry?
No, the categorisation - unorganised or organised is based on the way the business is run, rather than what business is run. Almost all industry sectors including agriculture, manufacturing, mining, services, transportation, and construction have both organised and unorganised entities.

So who are we exactly talking about?
We are talking about 93% of the workforce in India. The daily wage labourer who built your house, the painter who painted it, the shopkeeper in your street, the coaching class in your neighbourhood, the auto rickshaw driver on the road, the farmer who produced the grains you ate today - all of them are much likely to belong to the unorganised sector.

Does unorganised sector mean small scale industry?
No.

Does organised sectors mean sectors which have associations and industry bodies?
No. The presence of associations and industry bodies has to do nothing with the sector being organised or unorganised. For example, there are auto rickshaw associations in almost every city. But the rickshaw owners / drivers are primarily unorganised in nature.

Is Chaupaati organising the unorganised sector?
No. Chaupaati aims at providing an easy, affordable and common channel - the mobile for removing information asymmetry in the unorganised sector. For example, if you want to buy a second hand bike, Chaupaati will tell you which shops/individuals in your locality want to sell the bike you want. For you to get this information otherwise would require visiting 8-10 shops with a success of only 1-2 having the bike of your interest. Connecting to individual sellers would only be by chance. Chaupaati will solve this problem for you over a short phone call.