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

'Enough evidence' in Indian tradition to support legal basis for same-sex marriage

By Iyce Malhotra, Joseph Mathai, Sandeep Chachra*  The ongoing hearing in the Supreme Court on same-sex marriage provides space for much-needed conversations on issues that have hitherto remained “invisible” or engaged with patriarchal locker room humour. We must recognize that people with diverse sexualities and complex gender identities have faced discrimination, stigma and decades of oppression. Their issues have mainly remained buried in dominant social discourse, and many view them with deep insecurities.

Savarkar 'criminally betrayed' Netaji and his INA by siding with the British rulers

By Shamsul Islam* RSS-BJP rulers of India have been trying to show off as great fans of Netaji. But Indians must know what role ideological parents of today's RSS/BJP played against Netaji and Indian National Army (INA). The Hindu Mahasabha and RSS which always had prominent lawyers on their rolls made no attempt to defend the INA accused at Red Fort trials.

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

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".

Victim of communal violence, Christians in Manipur want Church leadership to speak up

By Fr Cedric Prakash SJ*  The first eleven days of May 2023 have, in many ways, been a defining period of Indian history! Plenty has happened in a rapid-fire stream of events. Ironically, each one of them are indicators of how crimes and the criminalisation of society has become the ‘new norm’; these include, the May Day rallies with a focus on the four labour codes which are patently against the rights of workers; the U S Commission on International Religious Freedom (USCIRF) released its Annual Report on 1 May stating that conditions for religious freedom in India “continued to worsen in 2022”; the continued protest by the Indian women wrestlers at Jantar Mantar for the expulsion of the chief of the Indian Wrestlers Federation on very serious allegations; the Elections in Karnataka on 10 May (with communalism and corruption as the mainstay); the release of the fake, derogative and insensitive film ‘The Kerala Story’; the release of World Free Press Index on 3 May which places India

Delhi HC rules in favour of retired Air Force officer 'overcharged' for Covid treatment

By Rosamma Thomas*  In a decision of May 22, 2023, the Delhi High Court ruled in favour of petitioner Group Captain Suresh Khanna who was under treatment at CK Birla Hospital, Gurugram, between April 28 and May 5, 2021, for a period of eight days, for Covid-19 pneumonia. The petitioner had to pay Rs 3,55,286 as treatment costs, but the Ex-Servicemen Contributory Health Scheme (ECHS) only reimbursed him for Rs 1,83,748, on the basis of government-approved rates. 

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.

Unlike other revolutionaries, Hindutva icon wrote 5 mercy petitions to British masters

By Shamsul Islam*  The Hindutva icon VD Savarkar of the RSS-BJP rulers of India submitted not one, two,or three but five mercy petitions to the British masters! Savarkarites argue: “There are no evidences to prove that Savarkar collaborated with the British for his release from jail. In fact, his appeal for release was a ruse. He was well aware of the political developments outside and wanted to be part of it. So he kept requesting for his release. But the British authorities did not trust him a bit” (YD Phadke, ‘A complex Hero’, "The Indian Expres"s, August 31, 2004)

India joining US sponsored trade pillar to hurt Indian farmers, 'promote' GM seeds, food

Counterview Desk  As many as 32 civil society organisations (CSOs), in a letter to Union Commerce Minister Piyush Goyal on the Indo-Pacific Economic Framework (IPEF) and India joining the trade pillar, have said that its provisions will allow the US to ensure a more favourable regulatory regime “for enhancing its exports of genetically modified (GM) seeds and GM food”, underlining, it will “significantly hurt the livelihoods of Indian farmers.”

Polygamy in India "down" in 45 yrs: Muslims' from 5.7 to 2.55%, Hindus' 5.8 to 1.77%, "common" in SCs, STs

By Rajiv Shah Amidst All India Muslim Personal Law Board (AIMPLB) justifying polygamy, saying it “meets social and moral needs and the provision for it stems from concern and sympathy for women”, facts suggest the the practice is down from 5.7 per cent of Muslim families in 1961 to 2.55 per cent in 2006.

Modi govt 'wholly untrustworthy' on Covid data, censored criticism on pandemic: Lancet

By Rajiv Shah   One of the world’s most prestigious health journals, brought out from England, has sharply criticised the Narendra Modi government for being “wholly untrustworthy on Covid-19 health data”, stating, the “official government figures place deaths at more than 530 000, while WHO excess death estimates for 2020 and 2021 are near 4·7 million.”