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

132 Gujarat citizens, including IIM-A faculty, others declare solidarity with Kashmiris

Counterview Desk
A week after it was floated, 132 activists, academics, students, artists and other concerned citizens of Gujarat, backed by 118 living in different parts of India and the world, have signed a "solidarity letter" supporting the people of Jammu and Kashmir (J&K), who, it claims, have been silenced and held captive in their own land. The signatories include faculty members and scholars of the prestigious Indian Institute of Management-Ahmedabad (IIM-A).

Bharat Ratna nominee ‘joined hands’ with British masters to 'crush' Quit India

By Shamsul Islam*
The Quit India Movement (QIM), also known as ‘August Kranti' (August Revolution), was a nation-wide Civil Disobedience Movement for which a call was given on August 7, 1942 by the Bombay session of the All-India Congress Committee. It was to begin on August 9 as per Gandhi's call to 'Do or Die' in his Quit India speech delivered in Bombay at the Gowalia Tank Maidan on August 8. Since then August 9 is celebrated as August Kranti Divas.

Gujarat's incomplete canals: Narmada dam filled up, yet benefits 'won't reach' farmers

By Our Representative
Even as the Gujarat government is making all out efforts to fill up the Sardar Sarovar dam on Narmada river up to the full reservoir level (FRL), a senior farmer rights leader has said the huge reservoir, as of today, remains a “mirage for the farmers of Gujarat”.
In a statement, Sagar Rabari of the Khedut Ekta Manch (KEM), has said that though the dam’s reservoir is being filled up, the canal network remains complete. Quoting latest government figures, he says, meanwhile, the command area of the dam has been reduced from 18,45,000 hectares (ha) to 17,92,000 ha.
“According to the website of the Sardar Sarovar Narmada Nigam Ltd, which was last updated on Friday, while the main canal, of 458 km long, has been completed, 144 km of ranch canals out of the proposed length of 2731 km remain incomplete.
Then, as against the targeted 4,569 km distributaries, 4,347 km have been constructed, suggesting work for 222 km is still pending. And of the 15,670 km of minor canal…

Ceramic worker dies: 20,000 workers in Thangadh, Gujarat, 'risk' deadly silicosis

By Our Representative
Even as the country was busy preparing for the Janmashtami festival on Saturday, Hareshbhai, a 46-year-old ceramic worker from suffering from the fatal lung disease silicosis, passed away. He worked in a ceramic unit in Thangadh in Surendranagar district of Gujarat from 2000 to 2016.
Hareshbhai was diagnosed with the disease by the GCS Medical College, Naroda Road, Ahmedabad in 2014. He was found to be suffering from progressive massive fibrosis. He is left behind by his wife Rekha sister and two sons Deepak (18) and Umesh (12),
The death of Hareshbhai, says Jagdish Patel of the health rights group Peoples Training and Research Centre (PTRC), suggests that silicosis, an occupational disease, can be prevented but not cured, and the Factory Act has sufficient provisions to prevent this.
According to Patel, the pottery industry in the industrial town of Thangadh has evolved for a long time and locals as well as migrant workers are employed here. There are abou…

Cess for Gujarat construction workers: Spending less than 10%; no 'direct help' to beneficiaries

By Our Representative
While the Gujarat government’s Building and Other Construction Workers Welfare Board, set up in 2004, as of March 31, 2019, has collected a total cess of Rs 2,097.62 crore from the the builders, it has spent less than 10% -- Rs 197.17 crore. And, as on May 31, 2019, the total cess collection has reached Rs 2,583.16 crore, said a statement issued by Bandhkam Majur Sagathan general secretary Vipul Pandya.
Pointing out that just about 6.5 lakh out of 20 lakh workers have been registered under the board, Pandya said, vis-à-vis other states, Gujarat ranks No 13th in the amount spent on the welfare of the construction workers, while 11th in the amount collected.
And while the builders are obliged to pay just about 1% of the total cost of their project, the calculation of the cess is flawed: It is Rs 3,000 per square yard; accordingly, Rs 30 per square yard is collected. “Had the cess been collected on the real construction cost, it would have been at least Rs 7,000 cr…