5-sem, 3-yearSPA Vijayawada

Formal Sector (One-Town)

1. DEFINITION OF FORMAL SECTOR
Organized or formal sector refers to all establishments in public sector, central, state and quasigovernmental establishments and local bodies irrespective of size of employment and nonagricultural establishments including plantations in private sector employing 10 or more persons
(NSSO 1986).
The formal sector comprises employment in:

The government sector, corporate sector, large private sector establishments and the
estate sector
Around one-third of the population in our country are employed in formal sector.(source)
Wage setting takes place through collective bargaining or tripartite wages boards.

2. FORMAL SECTOR IN ONE-TOWN

In One-Town the formal sector
survey has been conducted by
taking the major commercial
streets
into
consideration
(Reconnaissance
survey).The
streets covered are:

Shivalayam street
Park street
Main Bazaar road
Bava Narayan Street

We have Conducted Formal

surveys
through
systematic
sampling covering all the formal
shops. The formal sector in onetown is divided as per the different
activities performed. The formal
shops on different streets in onetown sell different commodities.
Formal shops in one town can be
classified on the basis of activities
performed:
1

Iron and
market

steel

Tobacco traders

Gold shops

Textile

Grocery shops

Bakeries

Stationary Shops

Vegetable Market

Flower Shop

Medical Shops

Electrical Appliance

Home Appliance

Fancy Shops

2.1FORMAL ACTIVITIES WHICH ARE PERFORMED AT LARGE SCALE

In One-Town, the activities can be differentiated on the basis of its scale as activities performed
at large scale and as carried out in small scale. The major activities carried out are:

Iron and steel market: Consists of 70 shops (Hardware). The wholesale shops for the Iron
and steel market are located in Bhavanipuram (in Iron and steel Complex). The average
number of employers in one shop is 3 and totally employs 210 workers.

Tobacco traders: Consists of 16 Shops with an average of 8 workers in each shop. The
tobacco sector hence employs 128 people.

Gold shops: Consists of 55 Shops mostly located in Shivalayam Street. The average
number of employers in each shop is 2 and employs around 110 people.

Textiles: The garment shops are mainly concentrated in KR Market with 335 shops. The
average number of employees in each shop is 3 and employs around 1005 people.

2.2TRADE UNIONS
For every activity in one town they have their trade unions and below are the some of the
trade unions:

Iron and Steel Market: Steel and iron association

Gold Shops: Gold union is the only one union.

Tobacco: Tobacco traders association

Textile: Lal Bahadur Shastri Wholesale Clothes

2.3EXPORTS AND IMPORTS OF GOODS IN ONE TOWN (for selected

activity)
Tobacco products is one of the major activities in one town, the products are imported from
Guntur and Prakasham Districts and these products are exported to Nujivedu, West Godavari and
East Godavari and Mangalgiri. Iron and steel another major activity, this is imported from
Rajasthan, Kerala, Calcutta and west Bengal. Jewelry is manufactured locally by the workers in
shops and localities buy these products. Textile goods are imported from Hyderabad, Bombay,
and Ahmedabad.
Transportation of Materials:
Iron and steel (raw materials and hardware) are transported by rail and trucks.
Cloth materials are transported through rail, LCV, 3-wheelers/ individual vehicles.
Tobacco is transferred through LCVs.
Storage:
Iron and steel market godowns are located in Bhavanipuram in an area of 76 acres and
the capacity of 100 tones and the godowns of textile are in one town itself in a place
called Vastra latha Market and same as tobacco its godowns are present in one town

2.4LOADING AND UNLOADING ACTIVITY IN ONE TOWN

In case of Iron and Steel Market, as it is done in bulks which takes more time , the
loading and unloading is done during night that is from 12:00AM-6:00AM. The process
of loading and unloading takes minimum 4-5 hrs. Manual labour is used for loading and
unloading as only 3 cranes are present. For textile industry loading and unloading is done
from 9:00AM-10:00PM. The loading and unloading time period is different for different
shops. Godowns are located inside Vastra Latha Market. Tobacco is bought to the shops
by the shopkeepers on demand. Godaowns are Located in One-town. Jewellery is bought
by the shopkeepers or agent based on demand.
3

2.5RULES AND REGULATIONS CONCERNED WITH FORMAL SECTOR BY

UNION
The rules and regulations followed by the shops coming under the above mentioned activities are
the given below. These are the rules imposed by the trade unions.

Unions only function for Formal sector activities.

Union will provide insurance to the members for any damage or accident.

To become a member of the association, certain amount is to be payed per year. (eg.
5116/- is to be payed per year for Iron and steel market)

Regular meetings are to be held every month.

Loading and unloading has to be done only at night (in case of Iron and steel market) and
at day for Textiles.

Elections for secretary has to be done every year.

Associations also provides facilities to members. (Hindi school, telugu school, computer
center, reading hall, vijaya steel corporation nursing home, assembly hall, silver jubilee
school, Ganesh steel library, free kalyana mandapam,etc.)

3.PROFILE OF FORMAL SECTOR EMPLOYEE IN ONE TOWN

The Average household size in one town is 4 persons. Most of the employees stay in regions
around 5 km. from one town, while others are from MG road, Autonagar, Krishna Lanka. The
mode of transport which is used by the employees is public buses, IPT and by walk. The working
works of the shops are from 9:00AM to10PM. The peak hour is observed is from Evening: 5: 00
PM to 9:00 PM.

4.ISSUES IN FORMAL SECTOR

On the basis of primary survey carried the major issues concerned with hawkers. Certain issues
observed are as follows:

Major issue is concerned with Hawkers.

Issues concerned with Parking.

Problems in Loading and Unloading due to narrow roads.

Traffic Congestion is one of the major issues.

Problems with Drainage.

Lack of proper street light facility.

Problems with electric wires.

5.INFERENCE
The workers are mostly males and have good educational background. They are mostly from
Vijayawada and the neighboring places. The migrant workers compose only 12% and they are
from Mumbai and Rajasthan. The working hours varies from 10 AM-10 PM with 100% workers
have access to credit in Commercial Bank. Formal sector workers are satisfied with the area. The
problems faced are mainly caused by hawkers who contribute to the congestion and blocking of
pathways. The other problems faced are due to parking, traffic, and poor infrastructure.
Majority of the workers would like to continue in the same area with better shop facilities.
Though they are satisfied with the area, 52% of the workers would not like to involve their
children in this sector.
The workers in formal sector are mostly males and have good educational background. They are
mostly from Vijayawada and the neighboring places. The migrant workers compose only 12%
and they are from Mumbai and Rajasthan. The major reason for establishment of the shops in
One Town is the established market present, the demand present and the old business character
of the place. The major goods sold are household goods and the activities are majorly on local
scale. The consumers are mainly from in and around One Town and the majority of customers
are working males.
Formal sector workers are satisfied with the area. The problems faced are mainly caused by
hawkers who contribute to the congestion and blocking of pathways. The other problems faced
are due to parking, traffic, and poor infrastructure. Majority of the workers would like to
continue in the same area with better shop facilities. Though they are satisfied with the area, 52%
of the workers would not like to involve their children in this sector.
The formal sector workers do not consider the informal people as a threat to their market. They
are only seen as nuisance and hence shows that both the sectors can co-exist in the One-Town
area, if the nuisance factor can be addressed.