Once practising her trade in the run-down quarters of Kolkata's Sonagachi, one of Asia's largest red light districts, she is now a proud holder of a policy from India's largest state-owned life insurance company.

"The policy won't change much in our life, but this small step is a giant leap forward in our struggle for legal recognition of sex work," said Dey.

"We live in a no-man's land in India where we are harassed by cops and rowdies," added the 45-year-old.

Prostitution is still illegal in India, although it is a thriving underground industry. Voluntary groups estimate that there are about 2 million female sex workers, most of them trafficked or forced into the work by poverty.

Over the last month around 250 sex workers in the city have been given life insurance policies by the Life Insurance Corporation (LIC) of India. Prostitutes say it is a breakthrough in their efforts to get legal recognition for their work.

Without many official documents, prostitutes are rarely able to open accounts in banks or join the financial mainstream.

Dey is a member of the Durbar Mahila Samanwaya Committee (Indomitable Women's Coordination Committee), a forum of 65,000 sex workers in West Bengal.

The committee was set up in 1995 to campaign for safe sex and the legalisation of prostitution.

Activists say legalisation could help bring prostitutes into the mainstream and help them fight poverty and discrimination.

"We are fighting for legalisation of sex work for over a decade. There are debates and a flurry of misleading promises. But this is the first time that a government company as big as LIC has recognised us as professionals," said Dey.

The policies, which are spreading to sex workers outside Kolkata, are not the only advance for women in the industry. In Mumbai, a bank run by sex workers was set up to help prostitutes escape poverty that keeps them indebted to brothel owners.

Started by a handful of sex workers in Kamathipura, Mumbai's red light district, it now has hundreds of clients.

Mamata Nandy, 35, a sex worker and a policy holder, said recognition by a company like LIC would only strengthen the fight against AIDS and the women's demand for legalisation.

"I had a policy before but that was after hiding my profession," she said.