India Labor Relations
Sources: The Library of Congress Country Studies; CIA World Factbook
Based on the 1991 census, the government estimated that the labor force had grown by more than 65 million since 1981 and that the total number of "main workers"--the "economically active population"--had reached 285.9 million people. This total did not include Jammu and Kashmir, which was not enumerated in the 1991 census. Labor force statistics for 1991 covered nine main-worker "industrial" categories: cultivators (39 percent of the main-worker force); agricultural laborers (26 percent); livestock, forestry, fishing, hunting, plantations, orchards, and allied activities (2 percent); mining and quarrying (1 percent); manufacturing (household 2 percent, other than household 7 percent); construction (2 percent); trade and commerce (8 percent); transportation, storage, and communications (3 percent); and "other services" (10 percent). Another 28.2 million "marginal workers" were also counted in the census but not tabulated among the nine categories even though unpaid farm and family enterprise workers were counted among the nine categories. Of the total work force--both main and marginal workers--29 percent were women, and nearly 78 percent worked in rural areas.
Included in the labor force are some 55 million children, other than those working directly for their parents. The Ministry of Labour and nongovernmental organizations estimate that there are 25 million children employed in the agricultural sector, 20 million in service jobs (hotels, shops, and as servants in homes), and 5 million in the handloom, carpet-making, gem-cutting, and match-making industries. With mixed success, nongovernmental organizations monitor the child labor market for abuse and conformity to child labor laws.
In government organizations throughout the nation and in nonagricultural enterprises with twenty-five persons or more in 1991, the public sector employed nearly 19 million people compared with about 8 million people employed in the private sector. Most of the growth in the organized work force between 1970 and 1990 was in the public sector. Observers expected that this trend might be reversed if the government's policy of economic liberalization continued. Labor law makes it very difficult for companies to lay off workers. Some observers feel that this restriction deters companies from hiring because they fear carrying a bloated workforce in case of an economic turndown.
A new source of employment appeared after OPEC sharply increased crude oil prices in 1974. The Middle East oil-exporting countries quickly undertook massive development programs based on their large oil revenues. Most of these countries required the importation of labor, both skilled and unskilled, and India became one of many nations supplying the labor. Because some labor agents and employers took advantage of expatriate workers, especially those with little education or few skills, in 1983 India enacted a law governing workers going abroad. In general, the new legislation provided more protection and required fairer treatment of Indians employed outside the country. By 1983 some 900,000 Indian workers were registered as temporary residents in the Middle East. In the mid-1980s, there was a shift in the kinds of skills needed. Fewer laborers, metalworkers, and engineers, for example, were required for construction projects, but the need for maintenance workers and operating staff in power plants, hospitals, and offices increased. In 1990 it was estimated that more than 1 million Indians were resident in the Middle East. India benefited not only from the opening of job opportunities but also from the remittances the workers sent back, which amounted to around US$4.3 billion of foreign exchange in FY 1988. Both employment and remittances suffered as a result of the 1991 Persian Gulf War, when about 180,000 Indian workers were displaced. In the mid-1990s, the outlook for Indian employment in the Middle East was only fair.
India's labor force exhibits extremes ranging from large numbers of illiterate workers unaccustomed to machinery or routine, to a sizable pool of highly educated scientists, technicians, and engineers, capable of working anywhere in the world. A substantial number of skilled people have left India to work abroad; the country has suffered a brain drain since independence. Nonetheless, many remain in India working alongside a trained industrial and commercial work force. Administrative skills, particularly necessary in large projects or programs, are in short supply, however. In the mid-1990s, salaries for top administrators and technical staff rose sharply, partly in response to the arrival of foreign companies in India.
The Trade Unions Act of 1926 provided recognition and protection for a nascent Indian labor union movement. The number of unions grew considerably after independence, but most unions are small and usually active in only one firm. Union membership is concentrated in the organized sector, and in the early 1990s total membership was about 9 million. Many unions are affiliated with regional or national federations, the most important of which are the Indian National Trade Union Congress, the All-India Trade Union Congress, the Centre of Indian Trade Unions, the Indian Workers' Association, and the United Trade Union Congress. Politicians have often been union leaders, and some analysts believe that strikes and other labor protests are called primarily to further the interests of political parties rather than to promote the interests of the work force.
The government recorded 1,825 strikes and lockouts in 1990. As a result, 24.1 million workdays were lost, 10.6 million to strikes and 13.5 million to lockouts. More than 1.3 million workers were involved in these labor disputes. The number and seriousness of strikes and lockouts have varied from year to year. However, the figures for 1990 and preliminary data from 1991 indicate declines from levels reached in the 1980s, when in some years as many as 35 million workdays were lost because of labor disputes.
The isolated, insecure, and exploited laborers in rural areas and in the urban unorganized sectors present a stark contrast to the position of unionized workers in many modern enterprises. In the early 1990s, there were estimates that between 10 percent and 20 percent of agricultural workers were bonded laborers. The International Commission of Jurists, studying India's bonded labor, defines such a person as one who works for a creditor or someone in the creditor's family against nominal wages in cash or kind until the creditor, who keeps the books and sets the prices, declares the loan repaid, often with usurious rates of interest. The system sometimes extends to a debtor's wife and children, who are employed in appalling working conditions and exposed to sexual abuse. The constitution, as interpreted by India's Supreme Court, and a 1976 law prohibit bonded labor. Implementation of the prohibition, however, has been inconsistent in many rural areas.
Many in the urban unorganized sector are self-employed laborers, street vendors, petty traders, and other services providers who receive little income. Along with the unemployed, they have no unemployment insurance or other benefits.
Data as of September 1995
NOTE: The information regarding India on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of India Labor Relations information contained here. All suggestions for corrections of any errors about India Labor Relations should be addressed to the Library of Congress and the CIA.