This report essentially takes stock of the employment conditions prevailing in the Indian economy prior to the pandemic and then goes on to delineate the impact of COVID-19 on lives and livelihoods. It also charts a possible policy path forward to address both short-term and long-term challenges of livelihood and employment. The focus is primarily on the non-farm economy while analysis and policy recommendations are at the national level.

Author:

• Santosh Mehrotra

This paper attempts to look at the ways informality is conceptualized in India and argues that the problems with the laws pertaining to informal labour are not simply an implementation issue, but the design of the labour laws itself exclude informal labour. While reviewing the history of labour laws in India and the social history of labour participation, the paper also examines the current change in the political approach to labour by changing the labour laws in the pretext of the pandemic. Focussing on the changes made in labour laws in Madhya Pradesh the paper argues that these changes would further informalise the workers intensifying the crisis.

Authors:

• Jenny Sulfath
• Balu Sunilraj

The Covid-19 pandemic has created unprecedented disruptions in labour markets across the world including loss of employment and decline in incomes. Using panel data from India, we investigate the differential impact of the shock on labour market outcomes for male and female workers. We find that, conditional on being in the workforce prior to the pandemic, women were seven times more likely to lose work during the nationwide lockdown, and conditional on losing work, eleven times more likely to not return to work subsequently, compared to men. Using logit regressions on a sample stratified by gender, we find that daily wage and young workers, whether men or women, were more likely to face job loss. Education shielded male workers from job loss, whereas highly educated female workers were more vulnerable to job loss. Marriage had contrasting effects for men and women, with married women less likely to return to work and married men more likely to return to work. Religion and gender intersect to exacerbate the disproportionate impact, with Muslim women more likely to not return to work, unlike Muslim men where we find religion having no significant impact. Finally, for those workers who did return to work, we find that a large share of men in the workforce moved to self-employment or daily wage work, in agriculture, trade or construction. For women, on the other hand, there is limited movement into alternate employment arrangements or industries. This suggests that typical ​‘fallback’ options for employment do not exist for women. During such a shock, women are forced to exit the workforce whereas men negotiate across industries and employment arrangements.

Authors:

• Rosa Abraham
• Amit Basole
• Surbhi Kesar

This paper makes an attempt to do an assessment of the impact of COVID-19 on employment and migration in India. The analysis is based on up-to-date facts and figures available in the public domain on economic growth, employment and migration. Using the employment elasticity approach, the study estimates employment loss during 2020 – 21 owing to the negative impact of COVID-19 on economic activities. The results of the study suggest that the country may witness job loss with the tune of 18.5 18.8 million in the current fiscal year. This in turn would shoot up the unemployment rate from 5.8% in 2018 – 19 to 8.9% in 2020 – 21, warranting a coordinated and focused approach from both the Central and State governments to uplift the confidence of the people and bring back the lost jobs, particularly the migrant workers. The study also emphasises on Central government’s urgent attention and action plan for uplifting the rural economy in order to revive India’s economy in the short run.

Authors:

• Purna Chandra Parida
• Yogesh Suri

The authors examine the impact of labour law deregulations in the Indian state of Rajasthan on plant employment and performance. In 2014, after a long time, Rajasthan was the first Indian state that introduced labour reforms in the Industrial Disputes Act (1947), the Factories Act (1948), the Contract Labour (Regulation and Abolition) Act (1970), and the Apprentices Act (1961). Exploiting this unique quasi-natural experiment, the authors apply a difference-in-difference framework using the Annual Survey of Industries longitudinal data of India’s manufacturing establishments. Their results show that reforms had an unintended consequence of the decline in labour use. Also, worryingly, the flexibility resulted in a disproportionate decline in the directly employed worker. Evidence suggests that the reforms positively impact the value-added and productivity of the establishments. The strength of these effects varies depending on the underlying industry and reform structure. These findings prove robust to a set of specifications.

Authors:

• Diti Goswami
• Sourabh Paul

Using the CMIE’s Consumer Pyramids Household Survey, we track a panel of households prior to the lockdown (in December 2019), during the lockdown (in April 2020) and afterwards (in August 2020) to investigate the employment and income effects of the Covid-19 pandemic and its associated containment measures. We identify four distinct employment experiences during the pandemic for those who were in the workforce just prior to the lockdown: no loss of employment (“No effect”), loss of employment followed by recovery (“Recovery”), loss of employment with no recovery (“No recovery”), and a delayed loss of employment (“Delayed job loss”). Overall, 54% of individuals experienced no job loss, while 30% lost work in April but recovered by August. 12% had not recovered employment as of August 2020. We analyse how these trajectories vary across different social and economic characteristics to quantify contractions and recovery in the labour market and the extent to which the vulnerabilities vary across different social groups, employment arrangements, and industries. We find that women were substantially more likely to lose employment as well as less likely to recover employment. Job loss was also more severe for lower castes as compared to intermediate and upper castes and for daily wage workers as compared to regular wage workers. Younger workers were particularly vulnerable to job loss compared to older workers. Having lost employment in April, younger workers were also less likely to recover employment in August. Finally, for those who were employed in both December 2019 and August 2020, we examine the changes in employment arrangements. We find a much greater frequency of transitions from wage employment to self-employment, more than that in the seasonally comparable period last year (Dec 2018 to Aug 2019). Our results call for urgent additional fiscal measures to counteract these effects.

Authors:

• Rosa Abraham
• Amit Basole
• Surbhi Kesar

We examine the Indian economy during a peak period of high growth between 2005 – 2012 to analyze nature and patterns of household-level transitions across the different sectors of the economy and to relate these transitions to the broader process of structural change. We use a pan-India household-level panel data to categorize households according to their primary income sources into seven sectors characterized by varying degrees of formality/​informality and various production structures and labour processes. We find that even this this relatively brief period, there has been a very large volume of transitions of households across these sectors. However, despite such volumes of transitions, the overall economic structure, and its segmentations, has continued to be reproduced, along with a regeneration of ​‘traditional’ informal spaces that were often expected to dissolve over time with high economic growth. To ascertain the nature of these transitions – ​‘favorable’ or ​‘unfavorable’ – in terms of economic well-being of households, we employ a counterfactual analysis. We find that a majority of the transitions in the economy during the period of analysis have been ​‘unfavourable’ in nature, with large proportion of households transitioning to sectors that are not ​‘optimal’ locations for them, given their socioeconomic characteristics. Further, using a multinomial logit regression framework, we find that
the likelihood and nature of these transitions significantly vary with household characteristics, some of which, like social caste, are structurally given and cannot be optimally chosen by households. This dynamic process of reproducing a rather stagnant structure, along with substantial ​‘unfavourable’ transitions towards ​‘traditional’ informal economic spaces that are continuously reshuffled and reconstituted, provide insights into the complexity of India’s development trajectory that is often glossed over in the literature.

Author:

• Surbhi Kesar

This paper is based on fieldwork I had undertaken regarding tribal migrant workers in the construction sector, in Ahmedabad in May-July 2018, coordinated by Aajevika Bureau(AB). I had undertaken this fieldwork to assess the work of AB and advise them about strategies to collectivize migrant labour groups. While interacting with a particular social group (Bhil tribals from South West Rajasthan) who work in the construction sector, I struggled to capture the specificity of their experience through the concept of informal labour. This paper is an attempt to characterize the specificity of their social experience, while also, reframing the concept of informal labour. I use the concept of labour process (Michael Burawoy: Manufacturing Consent) to argue that there is not a binary or one-dimensional power relationship between informal labour and owner/​state/​capital, but instead, the process of surplus appropriation occurs at multiple nodes through different agents. In this paper, I have identified multiple modes of surplus extraction which are embedded as institutions or social norms in the labour process. Further, I argue that there is a close link between the status of tribal workers as marginalized within society, and their status as displaced and marginalized in their living areas and workplace. This difference translates into identity based discrimination faced in the city, as well as, structural exclusion from the governance apparatus faced as migrants. Therefore, tribal migrant workers do not earn enough to subsist and are highly dependent on early child birth, non-remunerated services of their family and the social security net provided by their village community.

Author:

• Rahul De

Does there exist a trade-off between labour’s income share and output growth rate? Or does a reduction in wage share in itself reduce the output growth rate? These questions have returned to the centre stage in the midst of India’s present crisis as the government sought the dilution and suspension of labour laws as a counter-cyclical policy instrument. In the absence of any other stimulus or countervailing factors, the impact of such a policy would hinge on the relationship between income distribution and effective demand. This paper attempts to lay bare this relationship for the Indian economy through an empirical analysis of India’s macro data and a theoretical model on the basis of regression results.

Author:

• Zico Dasgupta

Controlling for monetary policy, government transfers are potentially inflationary. This, however, may not be true when the economy is demandconstrained. Using a panel data of 17 Indian states over 30 years, we show that government transfers via welfare programs do not lead to inflation. For identification, we use a narrative shock series of transfer spending that is based on the introduction of new welfare programs. We then look at a specific program, NREGA, which has been shown to increase rural wages, and show that its implementation did not increase inflation.

Authors:

• Girish Bahal
• Anand Shrivastava

Most international development economics and industrial organization literature emphasises the importance of SMEs (small and medium enterprises) as important to output, but especially to employment generation. Countries have different definitions for SMEs. In India the MSMEs (micro, small and medium enterprises) are defined in terms of investment in plant and machinery or equipment. The MSME Ministry (Annual Report, Government of India 2017 – 18) stated that the sector accounts for 45% of the manufacturing output and 40% of the total exports of the country; also that MSMEs accounted for 30.74% of GDP in 2014– 15. Not surprising, MSMEs are considered a driving force of the economy.

Authors:

• Santosh Mehrotra
• Tuhinsubhra Giri

This article analyses relationships between the implementation of state-level industrial policies in India and manufacturing sector economic performance (employment and gross value added), utilising data from the Annual Survey of Industries conducted by the Government of India. I employ panel data fixed-effects regression models to evaluate the associations between the industrial policy and state-industry specific performance over the 2007-08 to 2014 – 15 period, incorporating potential effects of the state government’s political alignment, infrastructure provision and educational expenditure in the state. The results provide evidence of a positive correlation between industrial policy implementation and firm output and employment, by around 12.6 — 14 per cent. However, subsequent introductions of an industrial policy are negatively associated with employment and are uncorrelated with industrial GVA. This analysis has implications for economic policy in light of the Central Government’s plans to implement a revised industrial policy at the national scale.

Author:

• Raavi Aggarwal

To contribute to the critical matter of India creating just and sustainable employment, the University has set up the Centre for Sustainable Employment (CSE), which conducts and supports research in areas of work, labour, and employment. The University is attempting to provide empirically grounded, analytical reflections on the state of work and workers in India, as well as to evaluate and propose policies that aim to create sustainable jobs. To this end the University also gives grants to create new knowledge in the above areas. It also hosts a working paper series to which contributions are invited from researchers, policy-makers, civil society actors, and journalists. The University’s CSE website is an important part of this agenda. In addition to research papers and policy briefs, it hosts government reports, as well as data and statistics on the Indian labour market. This also includes executive summary of the report.
 

State of Working India 2019 consists of labour market trends between 2016 and 2018, and four policy papers around the theme of employment generation.

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Executive Summary

Release event: Presentation and panel discussion

State of Working India 2019 Release Event Part One — YouTube

State of Working India 2019 Release Event Part Two — YouTube

Microenterprises have been the engines of job growth in the majority of dynamic economies. India is home to thousands of microenterprise clusters as well as millions of distributed entrepreneurs who can become job creators. Fostering of such mass-entrepreneurship is key to addressing India’s employment challenge. Case studies of clusters in general, and of women entrepreneurs in particular, show that if key factors such as collective action, infrastructure, credit, and market linkages are in place, returns to entrepreneurship are vastly improved. Inspirational stories are also emerging in the use of fourth industrial revolution technologies to improve access to markets and enter global value chains in a way that awards greater agency to women entrepreneurs.

Falling total employment is an unprecedented trend seen from 2011-12 to 2017 – 18. Due to a decline of employment in agriculture and manufacturing and slow growth of construction jobs, the process of structural transformation, which had gained momentum post-2004 – 5, has stalled since 2012. Mounting educated youth unemployment, and lack of quality non-farm jobs have resulted in an increase of the disheartened labour force. Though the share of regular and formal employment increased marginally due to growth of formal jobs in the private sectors, the share of informal jobs within government/​public sector increased. A dominant share of jobs is still generated by micro and small units of the unorganized sectors without any formal or written job contract. In both government and private sectors the number of contract jobs (with less than a year’s contract) is on the rise post 2011-12. Not surprisingly, real wages have not increased in either rural or urban areas.

Authors:

• Santosh Mehrotra
• Jajati K. Parida

Globally, research has shown that, there is a high correlation between the level of per capita income and the rate of female labour force participation. At the same time the agency and autonomy of women in a country improve with the level of female labour force participation.

Authors:

• Santosh Mehrotra

With the lack of official government data on unemployment and other labour market indicators, the most viable and recent source have been the regular household surveys conducted by the Centre for Monitoring the Indian Economy (CMIE). Given the differences in methods in data collection, it becomes exceedingly important to establish some comparability between the government and the CMIE datasets. This paper attempts to do that using two methods. First we fit a model of employment status on the CMIE data and see how well it predicts outcomes in the older Labour Bureau 2015 – 16 and NSS 2011-12 data. Then we compare state-level estimates of broad labour market indicators from CMIE 2016 and Labour Bureau 2015 – 16 datasets. The broad results are that despite differences in methodologies, the estimates for men are quite comparable between the surveys, while measures of women’s participation in the labour force seem particularly sensitive to the way questions are asked in surveys.

Authors:

• Rosa Abraham
• Anand Shrivastava

A continuous and sharp decline in the already depressed female labour force participation rate in India post 2005, particularly in the face of its rapid economic growth raises questions about the inclusiveness of the growth process. The paper recommends a set of policies based on the analysis of the nature and trends of female work participation and a brief analysis of the underlying reasons behind such trends. Women are moving out of the low productivity agricultural sector, which necessitates an increase in employment opportunities in the nonagricultural sector, particularly in rural and in semi-urban locations. Improving skills for employability, especially in manufacturing clusters (which is where the jobs are) located close to young girls’ rural homes, would help the females to join the labour force if non-agricultural jobs are growing. To release women from unpaid work in the household to join the paid labour force, it is essential to improve child care facilities and other basic service facilities, which again calls for raising the share of public expenditure in some sectors and specific facilities. For instance, increasing single working women’s housing, making public transport safer, and modifying public programmes to cater to women’s needs can pave the way for more women to engage and remain in the labour force, become active participants in the growth process, and thus achieve greater economic empowerment.

Authors:

• Santosh Mehrotra
• Sharmistha Sinha

Indians are optimistic. According to the Pew Research Center’s 2017 Global Attitudes Survey, three out of four Indians believe that, ​“when children today in India grow up, they will be better off financially than their parents” (Pew Global Attitudes Survey, 2017). Families hinge their hopes on the ability of the next generation to work hard, earn a living, and be a source of financial support. For years now, the nation has done the same, pinning its economic ambitions to a demographic advantage, or youth bulge, that is set to continue only for the next two decades. Unless there are pathways to productive and high-quality employment, the nation’s youth will not be able to deliver on these expectations.

Authors:

• Sabina Dewan
• Divya Prakash

India is one of the world’s fastest growing economies. To be a stable and prosperous democracy, this growth must be accompanied by the creation of meaningful, secure and remunerative employment. Realising this goal requires a grounded and comprehensive overview of the state of labour markets, employment generation, demographic challenges and the nature of growth.

The State of Working India (SWI) is envisioned as a regular publication that delivers well-researched, analytically useful information on India’s labour market, by bringing together researchers, journalists, civil society activists, and policymakers interested in labour and employment issues.

The report is based on the research of CSE staff, as well as on background papers which are available online. SWI conceives of India’s ongoing structural transformation as composed of two processes — movement of workers from agriculture to non-farm occupations (the Kuznets process) and from informal activities to formal ones (the Lewis process). But it adds crucial considerations of social equity and ecological sustainability to this standard framework. In the 21^st century, Lewis and Kuznets have to meet Ambedkar and Gandhi.

Report Documents

Complete Report (PDF)

All Figures (PDF)

Figure Data (XLS)

Background Papers

Pride and Prejudice: The Condition of Handloom Weavers in West Bengal Rajesh Bhattacharya and Sarmishtha Sen

Bijolia’s Harvest of Stone: Conditions of Work Among Quarrying Labour in Rajasthan

Gender Differentials in Expansion of Informal Enterprises

Labour Absorption in Indian Manufacturing: The Case of the Garment Industry

Hard Work, Low Pay : Work Patterns Among Rural Women in West Bengal

Changes in production and labour regimes and challenges before collective bargaining: A study with focus on the Gurgaon-Neemrana industrial belt in the DMIC

Recrafting Indian industry

Understanding the performance of India’s manufacturing sector: Evidence from firm-level data

The Indian Labour Market: A Fallacy, Two Looming Crises and a Silent Tragedy

Domestic Workers and the Challenges of Collective Action in Informal Work: A comment

Individual Chapters:

Cover And TOC

Executive Summary

Chapter One : Introduction

Chapter Two : Who Is Looking For Work?

Chapter Three : Where Is the Work?

Chapter Four: How Good Is The Work

Chapter Five: Who Does The Work

Chapter Six : Conclusion

Methods

Bibliography

Author:

• Anumeha Yadav

This study is the outcome of the experience of the Shramajivi Mahila Samity, an independent, non-party mass organisation of mainly rural working women in West Bengal. Shramajivi Mahila Samity works on gender discrimination and rights of women. It does not run any direct income generating programmes. However, in the 28 years of our work in rural Bengal, we have seen women contributing in myriad ways to the economies of their families. They are an irreplaceable element in the survival of their families, often making the difference between starvation and subsistence. We have always been surprised by the official statistics which show West Bengal as having one of the lowest female labour participation rates in the country. It has led us to believe that there is a gross misunderstanding about women’s work and the importance of unpaid work in the economy of a poor household. In the past few decades, we have seen more and more women in rural Bengal joining paid work. We have seen that men are migrating and the agricultural labour force in many areas consists now almost entirely of women. We were therefore surprised to read about a debate on falling female labour particpation rate at the national level. It did not match our own work experiences. It has led us to the present study, which we hope will be able to shed some light on what is actually happening to women from the rural working class in West Bengal.

Author:

• Anuradha Talwar

In India, the relative importance of the handloom sector, one of the largest employers following agriculture, has been declining for last few decades. The All India Handloom Census data for the year 2009-10 however showed a rather modest decline in the number of weavers in West Bengal, in contrast to a 33% decline at the national level in the same year. But share of handloom income in total household income for the weaver households in the state has decreased significantly pointing to considerable occupational diversification among them. Based on a qualitative field study in three districts of West Bengal — namely, Hooghly, Nadia and Purba Bardhaman — this essay presents findings related to the condition of handloom weavers in West Bengal and in the light of the findings, examines two issues— intra-sector and inter-sector mobility of labour as well as weavers’ response to changing market conditions. The paper argues for a more labour-focused approach in place of currently dominant tradition-focused understanding of the sector.

Authors:

• Rajesh Bhattacharya
• Sarmishtha Sen

This study focuses on the Gurgaon-Manesar-Dharuhera-Bawal-Tapukara-Neemrana industrial belt in Haryana and Rajasthan, which is an important ​‘node’ or part of Delhi-Mumbai Industrial Corridor (DMIC) and a major destination of capital in the last few decades. The study is based on primary survey work of qualitative nature of over 6 months from September 2017 to March 2018. Primary respondents are workers of different segments, plant-level Trade Union leaders and Trade Union activists of the belt, with some inputs from secondary literature, workers magazine and data published by the companies and the government.

Authors:

• Amit
• Nayanjyoti

After independence in 1947, India embarked on an ambitious path of industrialisation, following the standard modern developmental prescription drawn from the experience of the so-called developed countries. Since the inauguration of the reform era in 1991, this model of development, duly globalised, has been reinforced by the decisions made by metropolitan policy elites both within and beyond India.

Author:

• Aseem Shrivastava

The policy framework in India has provided support to the micro and small enterprises. In 2006, the Micro, Small and Medium Enterprises (MSME) Act 2006 came into existence (msme​.gov​.in). This Act aimed at promoting and developing micro, small and medium enterprises. In India, the MSME sector’s contribution to GDP was 17 percent of GDP during 2004-05 to 2009-10. More recently, a comprehensive policy called the National Policy for Skill Development and Entrepreneurship 2015 came into existence. This policy supersedes the National Skill Development Policy of 2009. The vision statement of the policy is ​“To create an ecosystem of empowerment by Skilling on a large Scale at Speed with high Standards and to promote a culture of innovation based entrepreneurship which can generate wealth and employment so as to ensure Sustainable livelihoods for all citizens in the country.” Recent policies such as demonetization and implementation of the Goods and Services Tax (GST) have created a setback for the micro enterprises that operated in the informal economy based mainly on cash transactions.

Authors:

• Jeemol Unni
• Ravikiran Naik

Despite its weak performance in terms of job creation in recent years, the organised manufacture sector remains vital to employment policy. This paper investigates the aggregate trends in this sector, in employment, output, labour-capital ratio, as well as wage share and wage rates at the three-digit NIC level over a long period from 1983 to 2016 using the Annual Survey of Industries data. We show that three distinct sub-periods can be identified within the overall period. Further, using shift-share decomposition we show that most of the decline in the L/K ratio can be explained by within industry changes. Finally, we analyze industries with respect to their capacity to deliver job growth as well as wage growth.

Authors:

• Amit Basole
• Amay Narayan