(GIST OF YOJANA) Labour's Landscape in India-June-2017

(GIST OF YOJANA) Labour's Landscape in India-June-2017

Workforce Participation and Employment Challenges

Of India's approximately l.3 billion population, (constituting approximately one-sixth of the humanity), 70 per cent live in villages and 40-45 per cent can be categorized as the working population. This proportion, or the so called worker population ratio, has roughly remained the same since Independence. The first point worth emphasizing is that the world of work is segmented along the lines of caste, religion, gender, region, etc. This leads to several problems, such as labour immobility for different groups, in particular women, huge wage differentials and discrimination, etc. For instance, the proportion of women in the labour force has been consistently lower than male workers by close to 20 per cent age points.

Another important feature of India's labour domain is the overwhelming dependence on agriculture which accounts for close to 50 per cent of the total workforce. Significantly as per the recent estimates agriculture contributes only approximately one sixth of the GDP of the country. This overcrowding of the workforce in agriculture and its 'underemployment' is structured by the high presence of wage labourers and declining number of people who report themselves as 'cultivators'. As regards the non-agricultural sector, its single most important feature (quite like agriculture) is the extremely high proportion of vulnerable informal employment. Though the non-agricultural sector accounts for about half the work force, it contributes approximately 80per cent to the total GDP, with a very small segment of less than 10 per cent being in-the organized sector. Of the total employment in the organized sector, almost 65 to 70 per cent is in the public sector (including public administration and defense services).

Increasing Vulnerability and Informality

As per the World Economic and Social Outlook Report, 2016, 12 per cent of the workforce in the developed .countries and 46 per cent of the workforce in the developing countries are in informal employment. Of this two thirds of the informal employment is in South Asia comprising about 72 per cent workers of the workforce. In India this proportion is much larger with more than 90 per cent of workers being in vulnerable informal employment relations. In fact a major worrisome trend is the relentless informalisation of work in the formal sector. In 1999-2000, the share of informal workers in the so called organized sector was 37.8 per cent, it had increased to 54.4 per cent in 2011-12, according to the 68th round of NSSO. As per the same round (60th) of the NSSO, 97 per cent of the self-employed in the rural and 98 per cent in the urban areas are in the informal sector; further, 78 per cent of the rural casual labourers and 81 per cent of the urban casual labourers are in the informal sector. 3 Thus, as per the NSSO estimates of2011-12 (which is the latest available estimate), count of informal labour was a whopping 447.2 million out of a total labour force of 484.7 million of the total working people. Most of these workers can be classed as 'vulnerable' who work in insecure jobs with negligible social protection. As already noted, informality and vulnerability has been on the rise, despite, relatively high economic growth rates of GDP in the reforms era; withdrawal of the Indian state from several key areas in the social sector has only aggravated the vulnerability of the Working-class.

Need for a Social Protection Floor

During the era of so-called economic reforms, official spokespersons have often argued that India's labour market is too rigid (due to several restrictive laws) and therefore reforms are particularly critical for foreign investments. Indian policy makers frequently suggest that the country has a key comparative advantage is its 'demographic dividend' which, if upgraded through skill development, and supported by labour market flexibility, will help to attract investments and create jobs. A careful examination of the above arguments, as I have discussed elsewhere (for example Jha 2016), it is amply clear from economic" theory that labour market regulation per se does not impede either economic growth or employment generation.

In this context India's policy makers face the challenge of designing and implementing a floor of labour rights, with a comprehensive vision of a 'national labour market'. Such a vision should clearly spell out a set of core labour standards, including a national minimum wage. This ought to be on the front burner of the policy agenda so that the informality in labour market can be addressed. Further, the discourses on social security need to be located in the currently dominant trajectory of growth and accumulation. The refusal of the contemporary Indian state to address the concerns of labour in the current context of the overall macro-economic policy regime is predicated on reaping advantages from a 'cheap labour regime'. However; the rationale of such a stance is seriously questionable both on grounds of theory and global experiences.

For workers in informal employment, there is an urgent need to ensure universal social protection that improves their conditions of work and helps them live a life with dignity. In order to do this there has to be a simultaneous focus on both expanding and improving delivery systems in the provisioning of basic services like nutrition, sanitation, health and education. This will improve the material and social conditions of workers and help to reverse the processes that increase the vulnerability of a majority of the workforce.

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Courtesy: Yojana