Skip to main content

44% of those employed in organized manufacturing are on contract, leading to slow 1.7% per annum wage rise

By Our Representative
Even as claiming that between 2000 and 2015, real wages in India grew in every sector, including in agriculture and in unorganised manufacturing and services, at the compounded annual growth rate (CAGR) of roughly 3 per cent, a recent study finds a variation across sectors: Thus, from 2010 to 2015, real wages grew faster, at a CAGR of 4 per cent for unorganised manufacturing, 5 per cent for unorganised services, and 7 per cent for agriculture.
Titled “State of Working India 2018”, carried out by the Centre for Sustainable Empoyment at the Azim Premji University, Bengalaru, the study, however, regrets, that the “wage growth in organised manufacturing has been slower than that in the unorganised sector – at 0.8 per cent over the whole period since 1999, and 1.7 per cent in the most recent period.”
A major factor “contributing to keeping wages down in this sector is the rise in the proportion of contract workers”, the study says, adding, “Field studies reveal that contract workers are paid a fraction of permanent worker wages, often for similar work.”
In fact, according to the study, the “contract workers' wages lie somewhere between the wages of direct workers and their unorganised sector counterparts”, underlining, “The rise in the proportion of workers employed via third-party contractors, reported earlier, together with the lower wage rates for these workers, has important implications for both quality of work as well as the share of labour in value added.” 
The study states, “There is a slowdown in the replacement of workers by machines but work is becoming more precarious in the organised manufacturing sector. Number of jobs supported by one crore rupees of fixed capital in organised manufacturing has leveled at around 10. In the early 1980s, one crore rupees of real fixed capital (in 2015 prices) supported around 90 jobs in the organised manufacturing sector.”
“Contract workers are nearly 30 per cent of all workers in organised manufacturing”, the study says, adding, “Contract workers accounted for 44 per cent of the additional employment between 2000 and 2014. Firms use non-permanent workers to stay below the threshold size and thereby avoid costs attributed to larger firm size. The intensity in the use of contract workers is highest for firms in the 50-99 size group.” 
It adds, “Field studies reveal many categories of contract, trainee, and apprentice workers who perform the work of permanent workers at a fraction of their wages. This is one way in which labour laws are being circumvented by manufacturing firms.”
“For example”, the study says, “As per contract, workers have to be paid Provident Fund (PF) and gratuity. However, workers reported that the employers encouraged them to terminate their current contract and claim PF benefits just before completing five years”, a period after which the PF and graduity would become applicable.
Thus, “workers rejoin the same factory within a week or so on a new contract. This significantly reduces the labour bill for employers. The authors also found that the law mandating public holidays is being flouted. Workers are required to work on Sundays to compensate for a public holiday.”
The study further states, “Contrary to popular perception, it appears that capital intensive industries are more reliant on contract workers than labour intensive industries. Contract workers constituted 37 per cent of total workers in chemicals and 47 per cent of total workers in motor vehicles, while in textiles and apparel the corresponding figures were 20 per cent and 15 per cent respectively.”

Comments

TRENDING

India performs 'poorly' in Quality of Life Index, ranks 62nd out of 64 countries

Counterview Desk “Expat Insider”, which claims to be one of the world’s most extensive surveys about living and working abroad, in a survey of 20,259 participants from around the globe, has found that of the 64 destinations around the globe, has found that while Taiwan is the best destination for persons living outside their native country, closely by Vietnam and Portugal, India ranks 59th.

Human development index: India performs worse than G-20 developing countries

By Rajiv Shah A new book, “Sustainable Development in India: A Comparison with the G-20”, authored by Dr Keshab Chandra Mandal, has regretted that though India’s GDP has doubled over the last one decade, its human development indicators are worse than not just developed countries of the Group of 20 countries but also developing countries who its members.

US publication blames Gates Foundation for 'accelerating' India's healthcare crisis

By Rajiv Shah A new book, published by the New York-based Monthly Press Review (MPR), has blamed Microsoft founder Bill Gates for “crowning” the crisis allegedly engulfing India’s health sector, stating, the top American billionaire’s foundation of late has acquired “extraordinary influence" over India’s public health governance,  giving a fillip to a policy that deprives access of public healthcare facilities for majority of the country’s population.

Youngest of 16 activists jailed for sedition, Mahesh Raut 'fought' mining on tribal land

By Surabhi Agarwal, Sandeep Pandey* A compassionate human being, always popular among his friends and colleagues because of his friendly nature and human sensitivity, 33-year-old Mahesh Raut, champion of the democratic rights of the marginalised Adivasi people of Gadchiroli, Maharashtra, has been in prison for over two years now.

India's GDP down by 50%, not 23%, job loss 200 million not 122 million: Top economist

By Our Representative  One of India’s topmost economists has estimated that India’s Gross Domestic Product (GDP) decline was around 50%, and not 23%, as claimed by the Government of India’s top data body, National Statistical Organization (NSO). Prof Arun Kumar, who is Malcolm S Adiseshiah chair professor, Institute of Social Sciences, New Delhi, said this was delivering a web policy speech, organised by the Impact and Policy Research Institute (IMPRI), New Delhi.

Stan Swamy vs Arnab Goswami: Are activists fighting a losing battle? Whither justice?

By Fr Sunil Macwan SJ* It is time one raised pertinent questions over the courts denying bail to Fr Stan Swamy, who was arrested under the Unlawful Activities (Prevention) Act (UAPA), and granting it to Arnab Goswami, editor-in-chief of the Republic TV, arrested under the charge of abetting suicide of Avay Naik, who ended his life in 2018. It is travesty of justice that a human rights activist is not only denied bail but is also made to wait for weeks to hear a response to his legitimate request for a straw to drink water, while Arnab Goswami walks free.

India among heavily impacted by Covid-19, China 'notoriously' evading transparency

By NS Venkataraman* With the year 2020 inevitably ending in the next few weeks, the thought amongst the people all over the world is whether the coming year 2021 will be free of Covid-19 (often dubbed as Wuhan virus, as it known to have spread from Wuhan in China).In the early 2020, many people thought that Covid-19 would be a localized affair in China but later on, it proved to be a global pandemic.

Namaz in Mathura temple: Haridwar, Ayodhya monks seek Faisal Khan's release

By Our Representative As many as 23 members of the Hindu Voices for Peace (HVP), including the founder president of the well-known Haridwar-based Matri Sadan Ashram, Swami Shivananda Saraswati, and a one of its top monks, Brahmachari Aatmabodhanand, have expressed their “dismay” over the arrest of Khudai Khidmatdar chief Faisal Khan and three others on charges of “promoting enmity between religions” and “defiling a place of worship” after they offered namaz in Mathura’s Nand Baba temple premises on October 29.

Buddhist shrines massively destroyed by Brahmanical rulers in "pre-Islamic" era: Historian DN Jha's survey

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.