UNIT 9
INDIAN ECONOMY
Labour in India refers to employment within the economy of India. In 2012, there have been around 487 million workers in India, the second largest after China. Of those over 94 percent add unincorporated, unorganised enterprises starting from pushcart vendors to home-based diamond and gem polishing operations.
The organised sector includes workers employed by the govt , state-owned enterprises and personal sector enterprises. In 2008, the organised sector employed 27.5 million workers, of which 17.3 million worked for state or government owned entities.
The overwhelming majority of labor in India is within the informal sector. These include family owned shops and street vendors. Pictured above may be a child fruit seller in Kolkata.
Workers at a handicraft manufacturing enterprise, Uttar Pradesh
Flooring work on a portico in Hyderabad
Over 94 percent of India's working population is a component of the unorganised sector.
In local terms, organised sector or formal sector in India refers to licensed organisations, that is, those that are registered and pay GST. These include the publicly traded companies, incorporated or formally registered entities, corporations, factories, shopping malls, hotels, and enormous businesses. Unorganised sector, also referred to as own account enterprises, refers to all or any unlicensed, self-employed or unregistered economic activity like owner manned general stores, handicrafts and handloom workers, rural traders, farmers, etc.
India's Ministry of Labour, in its 2008 report, classified the unorganised labour in India into four groups.
This classification categorized India's unorganised labour force by occupation, nature of employment, specially distressed categories and repair categories. The unorganised occupational groups include small and marginal farmers, landless agricultural labourers, sharecroppers, fishermen, those engaged in farming , beedi rolling, labeling and packing, building and construction workers, leather workers, weavers, artisans, salt workers, workers in brick kilns and stone quarries, workers in saw mills, and workers in oil mills.
A separate category supported nature of employment includes attached agricultural labourers, bonded labourers, migrant workers, contract and casual labourers. Another separate category dedicated to distressed unorganised sector includes toddy tappers, scavengers, carriers of head loads, drivers of animal driven vehicles, loaders and unloaders. The last unorganised labour category includes service workers like midwives, domestic workers, barbers, vegetable and fruit vendors, newspaper vendors, pavement vendors, hand cart operators, and therefore the unorganised retail.
The unorganised sector has low productivity and offers lower wages. Albeit it accounted for over 94 percent of workers, India's unorganised sector created just 57 percent of India's national domestic product in 2006, or about 9 fold less per worker than the organised sector.
Consistent with Bhalla, the productivity gap sharply worsens when rural unorganised sector is compared to urban unorganised sector, with gross value added productivity gap spiking a further 2 to 4 fold counting on occupation. a number of lowest income jobs are within the rural unorganised sectors. Poverty rates are reported to be significantly higher in families where all working age members have only worked the unorganised sector throughout their lives.
Agriculture, dairy, horticulture and related occupations alone employ 52 percent of labour in India.
About 30 million workers are migrant workers, most in agriculture, and native stable employment is unavailable for them.
India's National Sample Survey Office in its 67th report found that unorganised manufacturing, unorganised trading/retail and unorganised services employed about 10 percent each of all workers nationwide, as of 2010. It also reported that India had about 58 million unincorporated non-Agriculture enterprises in 2010.
In the organised private sector with quite 10 employees per company, the most important employers in 2008 were manufacturing at 5 million; social services at 2.2 million, which incorporates private schools and hospitals; finance at 1.1 million which incorporates bank, insurance and real estate; and agriculture at 1 million. India had more central and government employees in 2008, than employees altogether private sector companies combined. If state-owned companies and local government employees were included, India had a 1.8:1 ratio between public sector employees and personal sector employees. In terms of gender equality employed , male to female ratio was 5:1 in government and government owned enterprises; private sector fared better at 3:1 ratio. Combined, counting only companies with quite 10 employees per company, the organised public and personal sector employed 5.5 million women and 22 million men.
Given its natural rate of increase and aging characteristics, India is adding about 13 million new workers per annum to its labour pool. India's economy has been adding about 8 million new jobs per annum predominantly in low paying, unorganised sector. The remaining 5 million youth joining the ranks of poorly paid partial employment, casual labour pool for temporary infrastructure and land construction jobs, or in many cases, being unemployed.
About 7 per cent of the 400 million-strong workforce were employed within the formal sector (comprising government and corporates) in 2000 contributing 60 per cent of the nominal GDP of the state . The Trade Unions Act 1926 provided recognition and protection for a nascent Indian labour union movement. The amount of unions grew considerably after independence, but most unions are small and typically active in just one firm.
In 1997, India had about 59,000 trade unions registered with the govt of India.[15] of those only 9,900 unions filed income and expenditure reports and claimed to represent 7.4 million workers. The state of Kerala at 9,800 trade unions had the very best number of registered unions, but only few filed income and expenditure reports with the govt of India. The state of Karnataka had the fastest growth in number of unions between the 1950s to 1990s.
In 1995, India had 10 central federations of trade unions, namely (arranged by number of member unions in 1980): INTUC, CITU, BMS, AITUC, HMS, NLO, UTUC, AIUTUC, NFITU and TUCC. Each federation had numerous local union affiliates, with the littlest TUCC with 65 and INTUC with 1604 affiliated unions. By 1989, BMS had become India's largest federation of unions with 3,117 affiliated unions, while INTUC remained the most important federation by combined number of members at 2.2 million.[15] the most important federation of trade unions, INTUC, represents about 0.5% of India's labour force in organised sector and unorganised sector. In 2010, over 98% of Indian workers didn't belong to any trade unions and weren't covered by any negotiation agreements.
A number of economists (e.g.: Fallon and Lucas, 1989; Besley and Burgess, 2004) have studied the economic relations climate in India, with an outsized number of studies that specialize in state-level differences in India's Industrial Disputes Act. Some studies (e.g.: Besley and Burges, 2004) purport to point out that pro-worker amendments to the economic Disputes Act have had a negative impact on industrial output and employment - also as on poverty. However these studies have faced serious criticism on the grounds that the info used are misinterpreted, which the results aren't robust with reference to standard econometric tests.
Between 1950 and 1970, labour disputes nearly tripled in India, from a mean of 1000 labour disputes per annum , to a mean of 3000 labour disputes per annum . The amount of labour relations issues within a year peaked in 1973 at 3,370 labour disputes. The amount of workers who joined labour disputes within an equivalent year, and stopped work, peaked in 1979, at 2.9 million workers. The amount of lost man-days from labour relation issues peaked in 1982 at 74.6 million lost man-days, or about 2.7% of total man-days in organised sector.[15] While the 1970s experienced a spike in labour unions and disputes, a sudden reduction in labour disputes was observed during 1975–1977, when Gandhi , then prime minister, declared an emergency and amongst other things suspended many civil rights including the worker's right to strike.[19]
This is a table showing trend of organised Labour Force.[20]
Year Public Sector
(in millions) Private Sector
(in millions) Live (Unemployment) Register
(in millions)
1975 13.63 6.79 9.78
1980 15.48 7.40 17.84]45 40.17
Union membership is concentrated within the organised sector, and within the early 1990s total membership was about 9 million. Many unions are affiliated with regional or national federations, the foremost important of which are the Indian National union Congress, the All India union Congress, the Centre of Indian Trade Unions, the Hind Mazdoor Sabha, and therefore the Bharatiya Mazdoor Sangh. Politicians have often been union leaders, and a few analysts believe that strikes and other labour protests are called primarily to further the interests of political parties instead of to market the interests of the manpower .
The government recorded 1,825 strikes and lockouts in 1990. As a result, 24.1 million workdays were lost, 10.6 million to strikes and 13.5 million to lockouts. Quite 1.3 million workers were involved in these labour disputes. The amount and seriousness of strikes and lockouts have varied from year to year. However, the figures for 1990 and preliminary data from 1991 indicate declines from levels reached within the 1980s, when between 33 and 75 million workdays per annum were lost due to labour disputes. In 1999, the govt of India recorded about 927 strikes and lockouts, or about half those for 1990. The amount of lost man-days were about an equivalent for 1999 and 1991, albeit Indian economic output and number of workers had grown significantly over the 1990s.
Between 2004 and 2011, India has experienced a decline in unionised labour. The amount of labour disputes has dropped to 400 annually over an equivalent period, compared with over 1,000 within the 1990s. The annual number of man-days lost to labour disputes in early 1990s averaged around 27 million; by 2010, while Indian economy has grown significantly and Indian labour force has expanded, the typical number of man-days lost has dropped by about 30%. The downward trend continues both in terms of number of disputes and lost man-days per dispute. For instance , India experienced 249 disputes within the first 5 months of 2010, and 101 disputes in 2012 over an equivalent period.
Many issues plague unorganised labour. India's Ministry of Labour has identified significant issues with migrant, home or bondage labourers and child labour.
Migrant skilled and unskilled labourers of India constitute about 40 to 85 percent of low wage working population in many parts of the center East. They're credited to having built many of the notable buildings within the Arab countries, including the Burj Khalifa in Dubai (above). Various claims of poor living conditions and labour abuse are reported.
India has two broad groups of migrant labourers - one that migrates to temporarily work overseas, and another that migrates domestically on a seasonal and work available basis.
About 4 million Indian-origin labourers are migrant workers within the Middle East alone. They're credited to possess been the bulk of workers who built many of Dubai, Bahrain, Qatar and Persian Gulf modern architecture, including the Burj Khalifa, the tallest building in world's history which opened in January 2010. These migrant workers are attracted by better salaries (typically US$2 to five per hour), possibility of earning overtime pay, and opportunity to remit funds to support their families in India. The center East-based migrant workers from India remitted about US$20 billion in 2009. Once the projects are over, they're required to return at their own expenses, with no unemployment or Social Security benefits. In some cases, labour abuses like unpaid salaries, unsafe work conditions and poor living conditions are claimed.
Domestic migrant workers are estimated to be about 4.2 million - (Domestic workers, not domestic migrant workers). These workers range from full-time to part-time workers, temporary or permanent workers. They're typically employed for remuneration in cash or kind, in any household through any agency or directly, to try to to the household work, but don't include any member of the family of an employer. a number of these work exclusively for one employer, while others work for quite one employer. Some are live-in workers, while some are seasonal. The utilization of those migrant workers is usually at the desire of the employer and therefore the worker, and compensation varies.
Bonded labour may be a forced relationship between an employer and an employee, where the compulsion springs from outstanding debt. Often the interest accrues at a rate that's so high that the bonded labour lasts a really long periods of your time , or indefinitely. Sometimes, the worker has no options for employment within the organised or unorganised sectors of India, and prefers the safety of any employment including one offered in bonded labour form. While illegal, bonded labour relationships could also be reinforced by force, or they'll continue from custom. Once an employee enters into a bonded relationships, they're characterised by asymmetry of data , opportunity, no time to look for alternative jobs and high exit costs.
Estimates of bonded labour in India vary widely, counting on survey methods, assumptions and sources. Official Indian government estimates claim a couple of hundred thousand labourers are bonded labourers; while a 1978 estimate placed bonded labour in India to be 2.62 million.
The 32nd National Sample Survey Organisation survey in India estimated 343,000 bonded labourers in 16 major states, of which 285,379 were located and freed by 1996.
The main employment sectors for debt bonded labour include: agriculture, stone quarries, brick kilns, religious and temple workmen, pottery, rural weaving, fishing, forestry, betel and bidi workers, carpet, illegal mining and fireworks. Child labour has been found in family debt bonded situations. In each survey, debt bonded labourers are found in unorganised, unincorporated sector.
India enacted Bonded Labour System Abolition Act (1976) to ban any and every one sorts of bonded labour practice, to guard the bonded labour, and to criminalize individuals and entities that hire, keep or seek bonded labour.
According to 2001 Census, India had 12.6 million children, aged 5–14, who work either part-time or full-time. Of those over 60 percent add unorganised agriculture sector, and therefore the rest in other unorganised labour markets.[30] Poverty, lack of faculties , poor education infrastructure and growth of unorganised economy are considered because the most vital causes of kid labour in India.
A 2009-2010 nationwide survey found child labour prevalence had reduced to 4.98 million children (or but 2% of youngsters in 5-14 age group).
Article 24 of India's constitution prohibits child labour, but only in factories, mines or hazardous employment. The Indian legal code , the Juvenile Justice (care and protection) of youngsters Act-2000, and therefore the Child Labour (Prohibition and Abolition) Act-1986 provide a basis in law to spot , prosecute and stop child labour in India.[36] Nevertheless, child labour is observed in most unorganised, small scale, informal sectors of the Indian economy.
Scholars suggest inflexibility and structure of India's labour market, size of informal economy, legal hurdles preventing industries from scaling up and lack of recent manufacturing technologies are major macroeconomic factors encouraging demand for and acceptability of kid labour.
Growth of Trade Unions:
The trade-union may be a phenomenon of the fashionable industrialized society. It's a gaggle of workers engaged during a particular trade for the needs of securing better wages, shorter hours of labor and improved conditions of labour. Within the modern capitalistic society the worker may be a hired employee with little attachment to the factory or office aside from to his wages.
The early trade unions were small organisations of working men seeking some means of mitigating their weakness against the employer. They had, however, to face the hostility of state . Both in England and on the Continent the workers were prevented from exercising the proper of uniting for self defense.
Thus, in 1729 Irish Parliament passed a statute whereby combinations of any trade were prohibited. British Act of 1799 was a really strong measure penalizing the workers unions. ‘The operatives’ combinations”, wrote Weber, “were considered being within the nature of a mutiny against their employers and masters; destructive of the discipline necessary to the expansion of trade; and interfering with the proper of the employer to try to to what he liked together with his own capital” However, little by little the reality began to dawn on many minds that the workers had a right to unite so as to be capable of defending themselves against the capitalists and their pressure upon the govt .
Thus in times the trade unions aren't merely tolerated but also recognized as essential within the economic structure of the country. Their size and number have greatly increased and now they play a big role within the determination of wages, working hours and conditions.
Aims of a Trade Union:
The union in India is primarily an economic organization organized for economic struggle. Its essential function is to strengthen the economic status of its members and improve their working conditions. It's primarily concerned to market the economic interests of the workers.
But in England and America union has placed before itself ambitious goals. It's become an integral a part of industrial engineering . The management has incorporated labour as an intrinsic a part of the managerial apparatus instead of as individual hired hands. The unions have gained control or near control in many areas of commercial management.
Methods of a Trade Union:
The methods which the union adopts for getting its demands accepted are various and varied. First, it believes in negotiation which suggests that the representatives of the union shall meet the representatives of the employing concern and settle terms with them regarding wage scales, hours of labor and other conditions of labor .
If the tactic of negotiation fails, resort could also be had to arbitration. Under arbitration representatives of both the capital and labour are appointed who reach a choice by which both abide. The trade unions generally object to compulsory arbitration. If no decision is reached at arbitration the union resorts to strikes. The strike may be a powerful weapon. It stops production and profits.
The consumers are put to difficulties. The planet involves know that a gaggle of workers is on strike and isn't being fairly treated by the employer. If the strike occurs in some big public concern like Posts and Telegraphs, Railways, Coal and Steel, then the whole social life is paralyzed.
That is why recently the govt in India has banned strikes in essential services. During a strike the workers lay down their tools, stop work and walk out. If there's apprehension that the employer will usher in other workers to require their places they resort to picketing whereby members are stationed or walk back and forth ahead of the place of business whose workers are out on strike.
In recent decades the strike is claimed to possess become a menace to the general public . It causes scarcity of products and brings starvation to the door of the poor. The general public is put to embarrassing situations. The assembly having gone down the state suffers.
There is no disagreement that strikes are harmful to the country’s interests but the question is “how are the workers to urge a redress of their grievances in modern capitalistic age wherein the capitalists wield great influence within the Government?” If labour cannot strike the employers should be forbidden to exercise “lock-out”. The union isn't curious about stopping the work or paralyzing the economic lifetime of the society.
What it's curious about may be a square deal for its members at the hand of the employer. It protests against the prejudices, the shortage of sympathy and comprehension, and therefore the distrust shown by the capitalist employer. It asks for more pay, shorter hours and better conditions of labor for an equivalent reason that the capitalist always wants more profit and more leisure.
If differences between the labour and capital are discussed by their representatives frankly and during a friendly manner and if they need the spirit to accommodate one another not making unreasonable or impracticable demands, the labour-capital problems would be easily solved. The labour problems will never develop if capitalism has the social vision and therefore the willingness to correct its own weaknesses.
The promotional us Social Security card distributed as an example card in wallets distributed by the F.W. Woolworth Company
Social security is "any government system that gives monetary assistance to people with an inadequate or no income".In the us , this is often usually called welfare or a social safety net, especially when talking about Canada and European countries.
Social security is asserted in Article 22 of the Universal Declaration of Human Rights, which states:
Everyone, as a member of society, has the proper to Social Security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of every State, of the economic, social and cultural rights indispensable for his dignity and therefore the free development of his personality.
In simple terms, the signatories agree that the society during which an individual lives should help them to develop and to form the foremost of all the benefits (culture, work, social welfare) which are offered to them within the country.
Social security can also ask the action programs of a corporation intended to market the welfare of the population through assistance measures guaranteeing access to sufficient resources for food and shelter and to market health and well-being for the population at large and potentially vulnerable segments like children, the elderly, the sick and therefore the unemployed. Services providing Social Security are often called social services.
Terminology during this area is somewhat different within the us from within the remainder of the English-speaking world. The overall term for an action program in support of the well being of poor people within the us is welfare program, and therefore the general term for all such programs is just welfare. In American society, the term welfare arguably has negative connotations. Within the us , the term Social Security refers to the US social welfare program for all retired and disabled people. Elsewhere the term is employed during a much broader sense, pertaining to the economic security society offers when people are faced with certain risks. In its 1952 Social Security (Minimum Standards) Convention (nr. 102), the International Labour Organization (ILO) defined the normal contingencies covered by Social Security as including:
Survival beyond a prescribed age, to be covered by adulthood pensions;
The loss of support suffered by a widowed person or child because the results of the death of the breadwinner (survivor’s benefit);
Responsibility for the upkeep of youngsters (family benefit);
The treatment of any morbid condition (including pregnancy), whatever its cause (medical care);
A suspension of earnings thanks to pregnancy and confinement and their consequences (maternity benefit);
A suspension of earnings thanks to an inability to get suitable employment for protected persons who are capable of, and available for, work (unemployment benefits);
A suspension of earnings thanks to an incapacity for work resulting from a morbid condition (sickness leave benefit);
A permanent or persistent inability to interact in any gainful activity (disability benefits);
The costs and losses involved in medical aid , sickness leave, invalidity and death of the breadwinner thanks to an occupational accident or disease (employment injuries).
People who cannot reach a guaranteed social minimum for other reasons could also be eligible for supplementary benefit (or welfare, in American English).
Modern authors often consider the ILO approach too narrow. In their view, Social Security isn't limited to the supply of money transfers, but also aims at security of labor , health, and social participation; and new social risks (single parenthood, the reconciliation of labor and family life) should be included within the list also .
Social security may refer to:
Social insurance, where people receive benefits or services in recognition of contributions to an insurance program. These services typically include provision for retirement pensions, social insurance , survivor benefits and unemployment insurance.
Services provided by government or designated agencies liable for Social Security provision. In several countries, which will include medical aid , support during unemployment, sickness, or retirement, health and safety at work, aspects of welfare work and even industrial relations.
Basic security regardless of participation in specific insurance programs where eligibility may rather be a problem . As an example , assistance given to newly arrived refugees for basic necessities like food, clothing, housing, education, money, and medical aid .
A report published by the ILO in 2014 estimated that only 27% of the world's population has access to comprehensive Social Security .
References
1. Indian Economy - Rudra Dutt & Sundarram
2. Bhartiya Arthashastra – L. M. Roy
3. Indian Economy – Uma & Kapila
