Sharit K. Bhowmik is Professor of Labour Studies, Tata Institute of Social Sciences, Mumbai 400 088. Email: sharitb@tiss.edu. (Sharit K. Bhowmik)
The past few years have been quite troubled for labour. The most striking feature is the shrinking of labour in the organised (formal) sector. The 2001 Census showed that the total labour force in the country was 402.51 million. Only 7 per cent of this was in the organised sector. In fact, the proportion of the labour force in the organised sector has remained almost the same since 1991, when the total labour force in this sector was 27 million. Though the organised sector labour force increased by 1 million workers by 2001, it fell by 1 million by 2003, thanks to the aggressive sale of public sector units by the NDA government. The Economic Survey for 2004-05 notes that employment in the organised sector declined by 0.8 per cent in 2003 due to the decline in public sector employment by 1 per cent.
Move to Informalisation
What we are witnessing now is a move towards forced informalisation of labour. New entrants to the labour force cannot hope to get secure employment. Those with permanent jobs are being pushed into insecure, low-paid jobs in the unorganised sector. This can be seen from the growing trend in outsourcing of manufacture from the large-scale sector to the small and medium sector. In recent times, we have seen the gradual shrinking of employment and production in the Hindustan Unilever (HU) factory at Sewri in Mumbai to the total closure of the factory. At the same time, we see HU products increasing manifold. Its production has shifted from the large factories to small-scale industries located in industrial estates in different parts of the country. This is the main reason for the de-industrialisation of most of the industrial centres such as Mumbai, Ahmedabad, Kolkata, etc.
The advantage that HU and other companies engaged in manufacturing have is that most of the laws for protecting employment are not enforced in these small-scale industries. Moreover, as an additional bonus, these industries are exempt from paying taxes for the first five years. After this initial period, the company can fold up its activities and move on to another district or state where it can start afresh with new tax exemptions.
The government has tried to make matters easier for these buccaneer industrialists by promising to change the existing laws. At present the Industrial Disputes Act in its chapter on the closure of industries (Chapter VB) lays down that any factory employing 100 or more workers can close operations only after permission is given by the labour department of the state. The objective is obviously to ensure that workers get their legitimate dues if closure is necessary. Employers have been protesting about this provision stating that 100 is too small a number. In 1998, the Shiv Sena-BJP government in
The
In August 2006, the Planning Commission appointed a Working Group on Labour Laws and other Labour Regulations. The group submitted its report in 2007. One of its recommendations suggests an ‘amendment in the ID Act of 1947 by raising the number filter from 100 to 300 for applicability of chapter VB’.
The facts presented above indicate that though there may be major ‘ideological’ differences between the NDA and the UPA governments, their views are similar as far as labour is concerned. Both would like to make employment more ‘flexible’ for the benefit of employers. The difference is that when the previous
Condition of the Unorganised Sector
The second National Commission on Labour had suggested that there should be an umbrella legislation to protect the working conditions in the unorganised sector and for social security. The NDA government took scant notice of this suggestion. The UPA government had promised that it would have a comprehensive law, covering these aspects. However, it soon abandoned the idea of regulating working conditions in the unorganised sector. The National Commission for Enterprises in the Unorganised Sector (NCEUS) was asked to draft a legislation on social security. This bill is a whittled down version of the earlier promises. The government has decided to reduce its scope even further, possibly to cut down on expenditure. What it proposes to introduce in parliament will include only provisions for the insurance of these unprotected workers. However, even this has not been fulfilled so far. Before each session of parliament, the government promises to introduce the bill, but somehow this does not happen. The term of the present one is coming to an end and it is unlikely that it will render anything more than lip service for the unorganised sector. There are other Acts too such as the one on regulating street vending that are lying in cold storage. NCEUS has already drafted the bill but government is dilly-dallying about introducing it in parliament. Hence, whereas labour in the unorganised sector is increasing rapidly, the government is making no attempt to provide any protection or security to them.
Increasing the Working Day
A major blow to the labour movement has come recently in the budget speech of the
The objective is very clear. Workers in export-oriented industries such as garments will produce more to help in the country’s export earnings. It will make the industries more competitive in comparison with other developing countries such as