India is Facing a Youth Bulge
India needs to bring greater number of workers into the organized sector.
The fact that 93% of India’s labour force is in the unorganized sector should be shocking, but it hardly causes any surprise within India. Why? The sheer vastness of the people in the working age and their availability at cheaper rate, obviates the need for providing job security, minimum assured wages and observance of norms of safety. For every worker retrenched, a cheaper labourer is available.
Before we take a look at the labour situation, let us know what the organized or unorganized labour means.
Organised Labour: Those who work in registered workplaces, factories or workshops, and have assured work, holidays, leave, health benefits, retirement benefits, are covered under Minimum Wages Act, are termed Organised Labour.
Unorganised Labour: Those who work in unregistered establishments, have no fixed minimum wages, do not receive health, leave, retirement benefits and are not assured of quantity of work are called Unorganised Labour.
India is facing a youth bulge i.e., about 500 million people are in the working age (15-50 years) category. While youthfulness is receding in major countries of the world, India can be proud of having the largest productive population. But that could happen only if these people are educated and skilled. Viewed from this angle, 93% of this workforce being in unorganized sector does not sound well. So the basic challenge before us is: To increase the employability of the youth. This becomes more important now because economy is showing a major shift from Agriculture to Industry and Services. The Industry and Services require 120 million skilled workers.
For inclusive and sustained growth, fair wages are a necessity. But Indian wages are low. For example, a farm labourer gets an average of Rs. 267 a day. In case of women, this comes down to Rs. 187. If their kids are also involved, in less arduous work like sowing, they earn Rs. 125. An electrician earns Rs. 367 and a construction worker gets Rs. 275 on an average day. A fisherman can take home between Rs. 268 to Rs. 311, depending on the amount of catch. A worker employed in a factory earns Rs. 6,488 in Vadodara, or Rs. 7,558 in Kolkata or Rs. 9,769 in Chennai.
Few in the workforce have access to benefits guaranteed under the law. For instance, women should be given maternity benefits under the Maternity Benefit Act 1961. But look at 2012 statistics: only 2,441 women claimed maternity benefits across 84,956 factories. Similarly, the employers are supposed to provide crèches for infants of the women labourers. But in 2012, only 3,289 factories provided the crèches i.e., 2,389 in Tamil Nadu and 58 in Gujarat.
Written contracts are the basic condition for an employee to access the benefits permissible for an employee. But 93% of casual workers and 66% of salaried employees have no written contracts. Only 22% reported receiving paid leave.
Need of the Hour
The need of the hour is to revise the Minimum Wages Act annually and should be adjusted with inflation and it needs to be enforced rigorously.
Contract workers who are currently not covered by Minimum Wages Act, should be brought under Workmen’s Compensation Act 1923, inflation-linked wages and limited social security benefits from the Employees State Insurance Act 1948 and Maternity Benefits Act.
India needs 120 million skilled people in the non-farm sector as it progresses towards more urbanization. They will enter the labour force as apprentices. Care should be taken that they are not transformed into contract labourers.
Overall, there is a need to formalize the entire workforce in India for an orderly growth of economy.