Labour, Employment and Social Protection in India (Part 1)

Labour and Employment Issues

From a labour perspective, the population is divided into ‘Labour Force’ and ‘Out of Labour Force’. The Out of Labour Force population consists of students, domestic workers and pensioners while the Labour Force consists of workers and the unemployed. Workers in turn are divided into three by ‘activity status’: Activity Status, Industrial Status and Occupational Status.


Source: NSSO 68th Round, Employment Unemployment Survey 2011-12


Source: NSSO Employment Unemployment Surveys, various years

As the data shows, there is persistent duality between organised amd unorganised sectors (based on enterprise size) and between formal and informal work (based on access to social security).  Even though there is significant growth in organised sector employment, most of the new jobs are informal in nature.

Session 2: Rural Labour and Action Research

The session on Rural Labour and Action Research was facilitated by Dr M.M. Rehman, former faculty of VVGNLI. He started his session by presenting some statistics on the state of rural India.

Of the total workforce, agricultural workers constituted 57 per cent.  Out of the total 343 million rural workforce, agriculture workers constituted 73 per cent.  Of the total agricultural workers, 36 per cent were wage workers.  Another important aspect of the agricultural workers is the fact that out of the total agricultural workers, female agricultural workers constituted 41 per cent.

The Royal Commission’s Report on Agriculture, 1929 and the Radha Kamal Mukherjee Report, 1945 were two of the first reports to document the conditions of Indian workers.The Rural Labour Enquiry Report of 2004-05 and the National Commission on Labour Report in 1991 were other landmark reports that documented the struggles of rural labour.

(1) Indebtedness: Indebtedness is a serious issue in rural India because of the higher interest rate charged on those who borrow money from private money lenders. In fact, it is the major cause of rural poverty.

(2) Landlessness: Land holdings have been continuously decreasing among rural labour especially agricultural workers.

The poor generally belong to casual labour households or self-employed rural/urban households.

Several legislative measures were introduced over the years to counter these phenomena. The Minimum Wages Act, 1948, followed the Bonded Labour System (Abolition) Act, 1976, Equal Remuneration Act, 1976 and the Child Labour (Regulation and Abolition) Act, 1986 are some of them. In the recent past, the enactment of the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 and the Unorganized Workers Social Security Act, 2008, are the two most important legislations envisaged to protect the unorganized workers in general and rural workers in particular. However, Trade Unions or Labour Departments had no role in the formulation of these legislations and schemes.

One of the identified reasons for the lack of success in eradicating poverty and exploitation has been the lack of supporting organisations for rural workers. Realizing the necessity of building organizations among rural world workers, the International Labour Organization prepared the Convention No. 141 in 1975.  Today many countries in the world have ratified the Convention including India.  Of late, the Government of Andhra Pradesh has been encouraging rural workers to form groups for seeking employment under the Mahatma Gandhi National Rural Employment Guarantee Scheme.  The organizations are named as Shrama Sakthi Sanghas (SSS).

Rehman went on to elaborate on Research Typologies:

(1) Empirical Research:

(2) Interpretive Research

(3) Critical Theory

(4) Action Research

According to Rehman, action theory is a process of “collective/collaborative undertaking to change an existing situation to a better and more humane situation.”

Some action theorists are Karl Marx, Rabindranath Tagore, John Collier, Kurt Lewin, John Dewey, Anton Makarenko, Hilda Taba, Stephen Corey, Lawrence Stenhouse, Orlando Fals Borda, Anisur Rahman, Ortrun Zuber Skerritt, et al.

It is still not considered mainstream. From a philosophical perspective, it is democratic because of the aim to share learnings from the research with the community. The results and insights gained from the research are not only the theoretical importance to the advancement of knowledge in the field, but also lead to practical improvements during and after the research process. Hence it’s practical.

It’s (i) Participatory and Collaborative (ii) Emancipatory (iii) Interpretive (iv) Critical

Vulnerability and Social Protection in a Globalised Economy

Social protection is concerned with concerned with preventing, managing, and overcoming situations that adversely affect people’s well being. The Social Security (Minimum Standards) Convention, 1952 (No. 102) covers nine branches of social security:  medical care, sickness, unemployment, old-age, employment injury, family, maternity, invalidity, and survivors′ benefits. The Asia Development Bank’s (ADB) Social Protection Index consists of three major categories: social insurance, social assistance, and labor market programs.

The state, market, member-based organisations and private households have different ways in which they intervene in terms of social protection.

Items 23 and 24 in the Concurrent List under List III of the 7th Schedule of the Indian Constitution deal with social security and welfare of labour respectively.

–  Item No. 23: Social Security and insurance, employment and unemployment.

Item No. 24: Welfare of labour including conditions of work, provident funds, employers’ liability, workmen’s compensation, invalidity and old age pension and maternity benefits.

Articles 41 and 42 of the Directive Principles of State Policy which forms Part IV of the Constitution also cover labour issues.

Article 41: Right to work, to education and to public assistance in certain cases. The State shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want.

– Article 42: Provision for just and humane conditions of work and maternity relief. The State shall make provision for securing just and humane conditions of work and for maternity relief

Some of the challenges to Social Protection are:

(1) Low Government Spending on Social Protection (as % of GDP)

spending-on-social-protectionSource: World Bank Development Indicators

(2) Low Social Sector Spending as a % of GDP


Source: ‘Indian Public Finance Statistics’ published by the Ministry of Finance

(3) Low proportion of population above statutory pensionable age receiving old age pension

old-age-pensionSource: World Development Indicators

(4) Low life insurance density (measured as ratio of premium in US$ to total population)


Source: World Development Indicators

(5) High levels of out-of-pocket expenditure on health


Source: Global Health Statistics, WHO

As a response to these challenges, successive governments in India have come up with the following livelihood and social security programmes in various sectors:

(1) Education

Sarva Shiksha Abhiyan (SSA: Education for All): The Right to Education (RTE) Act, enacted in 2009 and enforced from 1.4.2010, gave a statutory base for providing education. SSA, launched in 2001-02, addresses the educational needs of children in the age-group of 6-14 years by strengthening educational infrastructure in terms of opening of new schools, construction, renovation and expansion of school buildings and providing other amenities like text books etc.

(2) Health

National Rural Health Mission (NRHM): In order to provide health security, especially to women, children and the poor residing in rural areas, NRHM was launched in 2005. It adopts a synergistic approach covering vital determinants of health like nutrition, sanitation, hygiene and safe drinking water. Its major goal is to reduce infant and maternal mortality rate, prevention of communicable and non-communicable diseases etc.

Janani Suraksha Yojana (JSY): JSY, launched on 12.4.2005 ,  is  a safe motherhood intervention under the NRHM. It is being implemented with the objective of reducing maternal and neo-natal mortality by promoting institutional delivery among  poor pregnant women.

All schemes have now been combined to form the National Health Mission.

(3) Housing

Under the Scheme called Indira Awas Yojana (IAY), financial assistance to the tune of Rs.45,000/- in plains and Rs.48,500/- in hilly terrain is provided to under-privileged section for construction/upgradation of dwelling units.

(4) Drinking Water and Sanitation

The National Rural Drinking Water Programme (NRDWP) ensures supply of adequate water for drinking, cooking and other domestic needs on a sustainable basis in rural areas.

– Access to sanitation in rural areas is provided through Total Sanitation Campaign (TSC) which follows a community-led and people-centric approach with components like information, education and communication for demand generation for sanitation facilities, individual household latrines, community sanitary complexes, school sanitation and hygiene education (SSHE) etc. It is now called the Swachh Bharat Abhiyan.

(5) Child Nutrition

– The Integrated Child Development Services (ICDS) is a nutrition and child development scheme launched in 1975 with the objective of improving the nutritional and health status of children in the age group of 0-6 years to reduce the incidence of mortality, morbidity and malnutrition and enhance the capability of mother to look after the health and nutritional needs of the children.

– The Mid Day Meal (MDM) Scheme covers elementary education (upto 8th class) and aims at providing hot, cooked mid-day meal with the stipulated, nutritive and calorific value.

(6) Targeted Public Distribution System

A Targeted Public Distribution System (TPDS) is in place to provide subsidized foodgrains to the disadvantaged populace. It will also facilitate operationalisation of the proposed National Food Security Act which will then provide statutory food security to the vulnerable. TPDS is now being progressively replaced by an Aadhar-based Direct Benefit Transfer Scheme.

—- Annapurna Scheme: 10 kg of foodgrains per person per month are supplied free of cost under the scheme, implemented since 2000-01, to poor senior citizen of 60 years age and above who are eligible for old age pension but are not getting it.

(7) Wage Floor

Apart from both the Central and State Governments fixing minimum rates of wages under the Minimum Wages Act, 1948 for various employments under their respective jurisdiction, the Central Government fixes the National Floor Level Minimum Wage (NFLMW) revising it from time to time. It presently stands at Rs.160/- per day w.e.f. 1.7.2015.  Though non-statutory, the State Governments are advised to ensure that in none of their scheduled employments, the Minimum Wages are fixed at a level not less than NFLMW.

(8) Self-employment and Wage-employment Schemes

National Rural Livelihood Mission/Swarnajayanti Gram Swarojgar Yojana (SGSY): Under SGSY financial assistance is provided to members of Below Poverty Line (BPL) families for creating income generating assets through a mix of bank credit and subsidy.

– Swarna Jayanti Shahari Rozgar Yojana (SJSPY)/ National Urban Livelihood Mission is an employment-oriented urban poverty alleviation scheme.

Prime Minister’s Employment Generation Programme (PMEGP) aims at generating self-employment by providing credit linked subsidy for setting up of micro enterprises.

(9) Employment Security

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005 aims at enhancing the livelihood security of people in rural areas by guaranteeing 100 days of wage employment in a financial year to a rural household. The Scheme also has the potential of upgrading infrastructure and increasing agricultural productivity thereby altering the geography of poverty, empowering women and preventing distress migration.

The Social Protection for Formal Sector workers which comprise of only 7% of the total workforce are as follows:

—Employees State Insurance Act, 1948,

—Employees Provident Funds & Miscellaneous Provisions Act, 1952,

—Employees Compensation Act, 1923,

—Maternity Benefits Act, 1961 and

Payment of Gratuity Act,1972

Social Protection for Informal Sector Workers on the other hand are of two types:

(1) Social Assistance Programmes

(2) Social Insurance Schemes

(1) Social Assistance Programmes are of three types: (a) Food-based (b) Income-based (c) Cash-based

(a) Food-based schemes are Mid-Day Meal Scheme (1995), Community Grain Bank Scheme (1996), Targeted PDS (1997), Antyodaya Anna Scheme (2000).

(b) Income-based schemes are Food for Work Programme, Jawahar Rozgar Yojana, Sampoorna Gram Swarozgar Yojana, Jawahar Gram Samridhi Yojana, Employment Assurance Scheme, Pradhan Mantri Gram Sadak Yojana, Food for Work Programme for Calamity Hit States, MGNREGA

(c) Cash-based schemes

The National Social Assistance Programme (NSAP) is administered by the Ministry of Rural Development, Government of India although the beneficiaries could hail from either urban or rural areas. The scheme is completely sponsored by the Central Government.

NSAP at present, comprises of

  • Indira Gandhi National Old Age Pension Scheme (IGNOAPS);
  • Indira Gandhi National Widow Pension Scheme (IGNWPS);
  • Indira Gandhi National Disability Pension Scheme (IGNDPS);
  • National Family Benefit Scheme (NFBS); and
  • Annapurna

(2) Social Insurance Schemes

Janshree Bima Yojana: This scheme is implemented by the LIC. 50% of the annual premium of Rs 200 is paid by the government of India and the other 50% is paid either by the beneficiary, nodal agency or the state government. This is applicable to the unorganised workers in the BPL and marginally APL categories in 43 notified occupations.

Aam Admi Bima Yojana: This scheme, confined to members of landless unorganised workers in rural households, in the age group of 18 – 59 years, provides the same benefits as the Janshree Bima Yojana and is also implemented by LIC. 50% of the annual premium of Rs 200 is paid from the Fund created for this purpose by the government of India and the rest 50% by the state government.

Rashtriya Swasthya Bima Yojana or National Health Insurance Scheme

In order to ensure welfare of workers in the unorganized sector, the Unorganized Workers’ Social Security Act, 2008 has been enacted which entails formulation of schemes to provide for life and disability cover, health & maternity benefits, old age protection and any other benefit as may be determined.

The above post is a summary of a two week workshop on ‘Sociology of Labour and Globalisation’ at the V.V. Giri National Labour Institute (VVGNLI), NOIDA. This covers Sessions 1-3 by Dr. Otojit Kshetrimayum and Dr. M.M. Rehman.

Click for Part 2.


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