Working Class in India

Article By Kobad Ghandy

During my Tenugaht court hearing on Apr. 6th news began coming in of a massive Ammonia leak at the Bokaro Steel Plant just 30 Kms away. Reports said workers were fleeing left-right and center, panic stricken, towards the gates [11 of them on the 60 acre plot] which were thrown open. They left behind their cycles and two wheelers. Later we learnt that there were 4 dead and many had to be admitted into the ICU. The truth will never come out and not a single media has covered the story. The death of workers is a non-event for todays’ elite, who only seek to preserve their ill-gotten wealth and upper-caste status.

I was told that the Bokaro Steel Plant was set up by seizing the land from 63 villages paying a pittance to the farmers and promising one job to them, however big the family. When it came up finally in the early 1970s it had about 55,000 permanent workers. At present it has 8,000 permanent workers [mostly supervisory staff] and 40,000 contract workers employed by about 500 contractors. The contract workers get about Rs.15,000 per month salary with no facilities or leave benefits. The working conditions are horrific and each day when they leave the plant their body and clothes are covered by layers of coal dust. A worker working in the captive thermal power plant inside the BSP told me that in other factories in Bokaro the payment is more like Rs.8,000 to 10,000 per month.

In Kolkata I was told by workers in a small unit that the wage rates are about the same [about 10,000] with no facilities. Such contractuaisation of the workforce has now become a pattern in India making a mockery of the labour laws of the country. Speaking to a worker in a luggage company in Kolkata she said they were paid Rs.290 per day without any DA. PF, Gratuity, ESI etc. working 10 hours a day [not the statutory 8 hours] standing the whole time. There is a half hour break for lunch. For one hour overtime they get paid Rs.30 taking the total to Rs.320 for the 11 hours working day. There is no leave or any facility or compensation for accident. They were earlier paid extra if they produced over 700 bags, but now that is stopped. These are the jumbo bags used for packaging which are made on a production line. All bags are for export with a price-tag of about Rs. 30,000. They work in two shifts with about 110 workers per shift; recruited mostly by 4 to 5 contractors. About 25 are recruited directly by the management – for workers who work in the sewing dept they get facilities which others don’t. But even these are paid on a daily basis of about Rs.420 per day. There are no permanent workers. The worker said that the managerial staff in the company is South Indian, the contractors are mostly Bihari [goonda types] and the labour is mostly Muslim Bengali -A perfect divide to keep the three sections apart. Forget unions they are not able to even talk to each other. After 11 hrs work most rush to go home. There is no time to interact with fellow workers.

The travelling costs and time takes about 1 to 2 hr each way and finally workers get just about Rs. 5,000 in hand after travel and rent are deducted. Most workers are from the districts, like Murshidabad, who hire a small place in Kolkata and have to pay the rent.  Many workers are students who work for 3 months in the holidays to pay their college fees. Some even work 4 days in the factory and go 3 days to the college. Male workers get Rs.432 and female Rs 320. The factory is fully AC. Supervisors are paid Rs. 30,000 to Rs 1 lakh – 10 supervisors per shift – ie one supervisor for every 12 to 15 workers exercising a vice-like control. 

Workers said such is the norm in all factories in the Kolkata/Howrah region. At least this factory had AC, most have to work in stifling heat which makes it intolerable given the high levels of humidity. There are also a number of jute mills in the region and one of them just closed down without any notice to the 600 odd labourers. There, working conditions are even worse with fibre getting into their lungs. The entire region seems to be flooded with unorganized labour even in big plants.

These are just two examples of our workers and factory employment. ON THIS May Day let us recapitulate the state of the working class in India. The situation seems so horrific that one wonders what the Trade Unions have been doing all these years. Or are they just focused on the PSUs where they get large funds from the employees? But data alone will not capture the plight of the working class in this state ruled by a ‘communist’ government for 34 years. It is not just the question of the casualization of the work force; most units have the workers line up outside the factory and the management then take in as many as required while the rest have to go home or search in other units. And their living conditions are horrifying with one to two families packed in tiny 10 by 10 hovels with no ventilation with one living on the loft and the other below. Now let’s look at the data throughout the country:

SIZE OF INDIA’S WORKING CLASS

Prof Arun Kumar says that not only is the unorganised sector ignored in data, policies also ignore it, even though it employs 94% of the workers and produces 45% of the output of the country. There is the invisibilisation of this sector with no mention of their plight in any media or party propaganda. And if one has no knowledge of these people we cannot feel for their woes nor do anything about it. The corporates represent only a few thousand businesses out of the crores operating in the country. Ninety-nine per cent of the businesses are in the unorganised MSME sector and today even the big industries have outsourced their production to such numerous small units where the exploitation rate can be increased to any level.

The Indian labour market remains characterized by high levels of segmentation and informality. Of the total employed in 2011–12, more than half (51.4 per cent, or 206 million people) were self-employed, and of the 195 million wage earners, 62 per cent (i.e. 121 million) were employed as casual workers.

Over and above this a recent Report, released by the Institute for Human Development and International Labour Organisation in 2024, has flagged concerns about poor employment conditions worsening even further: the slow transition to non-farm employment has reversed; women largely account for the increase in self-employment and unpaid family work; youth employment is of poorer quality than employment for adults; wages and earnings are stagnant or declining. In fact conditions have been deteriorating with each passing day and today 1% of the population holds 40% of the wealth.

Almost 82% of the work-force is engaged in the informal sector, and nearly 90% is informally employed, the report said. Self-employment remains the primary source of employment — 55.8% in 2022. Casual and regular employment accounted for 22.7% and 21.5% respectively. The share of self-employment remained almost stable around 52% between 2000 and 2019, while regular employment increased by almost 10 percentage points, from14.2%. In 2022, self-employment increased to 55.8%, while the share of regular employment declined to 21.5%. Casual employment consistently declined to 22.7% in 2022 from 33.3% in 2000. Regular employment is generally seen as providing better-quality jobs due to the regularity of employment and associated social security benefits, while casual work is linked with relatively poor-quality jobs due to its irregular nature and lower daily earnings. But the above 2 examples do not necessarily indicate this.

Informal employment has risen—around half the jobs even in the formal sector are of an informal nature. Self-employment and unpaid family work has also increased, especially for women.  The female Labour Force Participation Rate (LFPR) in India remains among the world’s lowest. Female LFPR declined by 14.4 percentage points (compared to 8.1 percentage points for males) between 2000 and 2019. As per ILO data there is a considerable gender gap — women’s LFPR (32.8%) in 2022 was 2.3 times lower than men’s (77.2%). India’ slow LFPR is largely attributed to the low female LFPR, which was much lower than the world average of 47.3% in 2022.

HIGH LEVELS OF IMPOVERISHMENT

India continues to be basically an agricultural country with about 60% of the population involved in agriculture. And even of the low urban population the bulk are involved in construction and services, the share of which in total employment increased to 32% in 2019 from 23% in 2000.The share of manufacturing in employment has remained almost stagnant at 12-14% since 2018-19. MNREGA, which provides employment at exceedingly low rates for the surplus labour, peaked in FY 2021 at 7.5 crore households, but dropped to 6 crore by FY 2024. Introduced as part of the Keynesian policy to provide employment, Modi’s neo-liberal govt has sought to end it. MNREGA is the best example of how our country’s development is stagnating unable to provide jobs through industrialisation. Any developing economy would move from agriculture to industrialisation as seen in the capitalist countries like the US, Japan, Europe.  In the current year the wage hikes of workers, ranged from a pathetic Rs 7 to Rs 26, with rates in different states varying from about Rs.220 to Rs. 230 per day well below the statutory minimum wage of around Rs.400 for unskilled workers. This backwardness is also reflected in our inability to absorb the youth and women in jobs.

Youth employment and underemployment increased between 2000 and 2019 but declined during the pandemic years. Unemployment among youths, especially those with secondary-level or higher education, has intensified over time. In 2022, the share of unemployed youths in the total unemployed population was 82.9%.The share of educated youths among all unemployed people also increased to 65.7% in 2022 from 54.2% in 2000. The unemployment rate among youths was six times greater for those who had completed secondary education or higher (18.4%) and nine times higher for graduates (29.1%) than for persons who could not read or write (3.4%) in 2022. This was higher among educated young women (21.4%) than men (17.5%), especially among female graduates (34.5%), compared to men (26.4%). The unemployment rate among educated youths grew to 30.8% in 2019 from 23.9% in 2000.

So we find all employment indicators in decline inspite of the much hyped ‘high’ growth rates.  With India likely to add 7-8 million youths annually to the labour force during the next decade the future before our youth looks exceedingly bleak. But this beak situation is not only for the poor but also our middle classes. A new Pew Research Center analysis finds that the middle class in India is estimated to have shrunk by 32 million in 2020 as a consequence of the downturn/lockdown – defined here as people with incomes of $10.01-$20 a day. Prior to the pandemic, in 2020, it was anticipated that 99 million people in India would belong to the middle class. A year into the pandemic, this number is estimated to be have been 66 million, cut by a third.

Meanwhile, the number of people who are poor in India (with incomes of $2 or less a day) is estimated to have increased by 75 million because of the COVID-19 recession/lockdown.. Perhaps not surprisingly, media reports from India point to a spike in participation in its rural employment program – originally intended to combat poverty in agricultural areas – as many who have lost jobs in the reeling economy seek work. The number now participating is setting record highs in the program’s 14-year history. Meanwhile, the number of poor in India is projected to have reached 134 million, more than double the 59 million expected prior to the recession/lockdown.

This enormous impoverishment of the masses is taking place amidst an oasis of wealth. The official figures do not capture the entire reality as much of the wealth of the elite is unaccounted black money and much of it is siphoned away in tax havens. The figures below only gives a general picture, which is bad enough.

INDIA HAS HIGHEST LEVELS OF INEQUALITY

“Oxfam’s global briefing points to the stark reality of inequality in India contributing to the death of at least 21,000 people each day, or one person every four seconds. The pandemic has set gender parity back from 99 years to now 135 years. Women collectively lost Rs. 59.11 lakh crore ($ 800 billion) in earnings in 2020, with 1.3 crore fewer women in work now than in 2019.

Women account for 60 percent of India’s hungry population. 3,000 children die every day from hunger, mostly the girl child. Those that survive have a high chance of living with hardships in the future and deformities due to lack of nourishment. Around 30 percent of newborns die from lack of nutrition. 21 percent of the population lives on less than $1.90 per day. [$1.90 is not nearly enough to live on sustainably].

More than 4.6 crore Indians meanwhile are estimated to have fallen into extreme poverty in 2020 (nearly half of the global new poor according to the United Nations.) Even Oxfam comments that : the stark wealth inequality in India is a result of an economic system rigged in favour of the super-rich over the poor and marginalised.

In a paper authored by top economists Thomas Piketty (Paris School of Economics and World Inequality Lab), Lucas Chancel (Harvard Kennedy School and World Inequality Lab), and Nitin Kumar Bharti (New York University and World Inequality Lab) said, “By 2022-23, top one per cent income and wealth shares (22.6 per cent and 40.1 per cent) are at their highest historical levels and India’s top one per cent income share is among the very highest in the world, higher than even South Africa, Brazil, and the US.”

The paper titled “Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj” stated that “between 2014-15 and 2022-23, the rise of top-end inequality has been particularly pronounced in terms of wealth concentration. The 10,000 wealthiest individuals of the 92 million Indian adults own an average of Rs.22.6 billion in wealth—16,763 times the country’s average—while the top 1 per cent possess an average of Rs.54 million in wealth. “The ‘Billionaire Raj’ headed by India’s modern bourgeoisie is now more unequal than the British Raj headed by the colonialist forces,” the authors said.

The paper pointed out that from 13 per cent in 1922, the top 1 per cent income share increased significantly to over 20 per cent in the inter-war period. From the early 1990s, the paper said the top 1 per cent income shares have consistently increased over the next 30 years to reach an all-time high of 22.6 per cent in 2022. This is regarding income, wealth disparities are even greater.

73% of the wealth generated in 2017 went to the richest 1%, while 67 crore Indians who comprise the poorest half of the population saw only a 1% increase in their wealth. On the other hand, in 2022 India ranked 111th out of 125 countries in the Global Hunger index, a sharp decline from earlier. India’s poverty rate is 84% (those living under $ 5 per day), compared to Egypt’s  69% and even Indonesia’s 62% (2019 figures) and Sri Lanka’s 49%. The World Economic Forum (WEF) ranked India at 135 out of 146 countries in the Global Gender Gap Index in the report’s 2022 edition.

On the other hand the wealth of the big corporates continues their rise. The 100 richest Indians had a cumulative wealth of $ 800 billion in 2022; withAdani at $ 150 bn and Ambani at $ 100 bn. And these are only the official figures; black income and wealth would at least double these figures

SUMMING UP

Employment in India is predominantly self-employment and casual employment.

Nearly 82 per cent of the workforce engages in the informal sector, and nearly 90 per cent is informally employed.

While wages of casual labourers maintained a modest upward trend during 2012–22, real wages of regular workers either remained stagnant or declined.

India is expected to have a migration rate of around 40 per cent in 2030 and will have an urban population of around 607 million.

CONCLUSION

Industrialisation has been a non-starter in India. So, we see that in 2019 the percentage of GDP in industry was a mere 25%, agriculture was 16% while service was 50%. In fact this indicated a sizable and continuous decline in industry since 2009 when it was 31.5% of GDP (agriculture 16.7% and service 46%). Not only that, the nature of the warped development is such that about 60% of the population lived on agriculture and allied activities while it contributed to a mere 16% of GDP, indicating low levels of earning.

That means with nearly 78 crore people dependent on agriculture and allied small industries like brick-kilns, quarries etc. their share in the entire economic cake is miniscule, indicating very low standards of living.  As per the 2011 census, of these, there are 49.5 crore landless individuals in villages, who are directly or indirectly dependent on cultivation for their livelihood. So such a small component of the GDP (16%) has to support more than half the population. This is unsustainable. What is worse due to the lack of industrial development most of those displaced from the land are not able to find suitable employment and comprise the huge migrant/floating labour in the cities.

Over and above this, One-third of food gets lost or wasted. According to the Indian Food Bank, 40 percent of vegetables and 30 percent of cereals produced are lost due to inefficiencies in the supply chain.

If the earnings of the working/middle classes increase this will increase the market for commodities, which in turn will demand the need for more factories and so a greater employment. This will create and ever expanding demand for commodities. The effect is spiralling and will result in the development of the economy and turn our backward country in line with the developed countries of the world. But as long as wages are kept at a sub-human level it may generate huge profits for the handful of owners, but the bulk of their wages will merely go for the basic necessities of life – food. This does not foster any growth and development as most have no money to purchase commodities. The economy will remain stagnant and continue to be dependent on capital from abroad – which in turn will lead to further the drain of our wealth.

This model of development must change if there is to be any progress in the country. The first step would be to expand the home market for commodities through decent employment for the vast masses. Increasing the wealth of the rich will not help as these people put most of their money abroad. In fact a graded taxation should be brought in to tax the rich and big corporates heavily and reintroduce wealth tax. 

 

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