Record 11 Crore Worked Under “MGNREGS” in 2020-21
What is the News?
According to Government data, over 11 crore people worked under the Mahatma Gandhi National Rural Employment Guarantee Scheme(MGNREGS) during the financial year 2020-21.
Key Facts Related to MGNREG Scheme during 2020-21:
- During the financial year 2020-21, around 11 crore people worked under the MGNREGS.
- This is the first time since the launch of the scheme in 2006-07 that the MGNREGS numbers crossed the 11-crore mark in a year.
- Further, the 11 crore mark is also higher by about 41.75% in 2019-20 when about 7.88 crores worked.
- The expenditure on MGNREGS has also increased. In 2020-21, the total expenditure was 62.31% higher than in 2019-20.
Note: As part of the economic package during the Covid-19 pandemic, the government announced additional funding of Rs 40,000 crore for the MGNREGS over and above the budgetary allocation of 2020-21.
Number of Days People Worked under MGNREGS:
- In 2020-21, the number of households that completed 100-day employment reached an all-time high of 68.58 lakh, an increase of 68.91% from 40.60 lakh in 2019-20.
- The average days of employment provided per household too went up marginally from 48.4 days in 2019-20 to 51.51 days in 2020-21.
- MGNREGS is one of the largest work guarantee programmes in the world.
- Launched in: The scheme was initially launched in the 200 most backward rural districts of the country in 2006-07. The scheme was later extended to an additional 130 districts during 2007-08 and to the entire country from 2008-09 onward.
- Under the scheme, every rural household whose adult member volunteers to do unskilled manual work is entitled to get at least 100 days of wage employment in a financial year.
- Implementation: Ministry of Rural Development (MRD), Government of India in association with state governments monitors the implementation of the scheme.
Key Features of the scheme:
- Demand-driven scheme: Worker to be hired when he demands and not when the Government wants it.
- Gram Panchayat is mandated to provide employment within 15 days of work application failing which worker is entitled to unemployment allowance
- Payment of wages within 15 days of competition of work failing which worker is entitled to delay compensation of 0.05%/ day of wages earned.
Source: Indian Express
Why States are Planning for Reservation to Locals in Private Jobs?
Synopsis: Haryana already passed the proposal providing reservation to locals. Many other states are planning for the same. It is because the States in India are unable to create jobs for their local economy due to various issues.
- Recently, the Haryana government has passed legislation for reservation of jobs to local Haryanvi’s first.
- On similar lines, the cabinet of the government of Jharkhand approved legislation to reserve jobs for Jharkhand residents.
- Also, The DMK in Tamil Nadu announced a proposal to reserve jobs for Tamils in its manifesto.
- Many economists have criticised the above policies of the State as it is against the liberal idea of a free economy.
What are the reasons for providing reservation in jobs for locals?
- First, increasing unemployment rate: As per the data from the Centre for Monitoring Indian Economy (CMIE), the unemployment rate in Haryana is very high among all States in India.
- Second, fear of Demographic disaster: More than half of all graduates in Haryana are jobless. Increasing Unemployment of youths will inevitably lead to social revolutions and political disorder.
- Third, Interstate economic inequality is rising: For example, the ‘3-3-3’ effect. The three richest large States (Maharashtra, Tamil Nadu and Karnataka) are three times richer than the three poorest large States (Bihar, Uttar Pradesh and Madhya Pradesh), in per-capita income.
- Also, inequality is only widening due to the agglomeration impact of modern economic development.
- Fourth, States have less autonomy to attract new jobs and investment. The lack of autonomy within states pushes them to resort to measures such as protecting jobs for locals through reservation etc.,
Why the states’ ability to attract new industries is limited in India?
Attracting investments and industries is related to many critical factors. States have limited discretion to provide land at affordable prices, provisioning uninterrupted supply of electricity, water etc., But it does not have control over the following aspects that stimulate jobs in states.
- First, Industries are willing to invest only in Economies which is growing steadily and at a faster pace. But the growth of Indian economy cannot be controlled by single states alone.
- Second, the requirement of abundant high quality skilled and unskilled labour. However, the availability of skilled local labour is a result of many decades of social progress of the State. States that have a very high unemployment rate cannot skill their population within a short period of time.
- Third, States have lost their fiscal autonomy after the introduction of the Goods and Services Tax (GST). They have no powers to provide any tax concessions to businesses. Whereas in America, States compete against each other vigorously using tax concessions.
- Fourth, the agglomeration effect drives new investments and industries in states that already are well established For example, supply chain, talent, good living conditions etc., This leads to a cycle of the more prosperous States growing much faster at the expense of the lagging States.
The increasing interstate disparity among states will only encourage nativistic sub-nationalism ideas and policies in the future, which is a threat to national integration. Hence, the centre should work towards bridging the development gap between different states along with greater fiscal freedom.
Source: The Hindu
“Shramik Kalyan Portal” of Indian Railways
What is the News?
Indian Railways ensured 100% compliance with the minimum wage pay to contract workers. E-application Shramik Kalyan Portal used for this purpose.
About Shramik Kalyan Portal:
- Launched by: the Indian Railways in the year 2018.
- Purpose: to ensure compliance with the provisions of the Minimum Wages Act. Also, to ensure that contractual workers of Indian Railways get their rightful due.
How does Shramik Kalyan Portal work?
- The portal enables all Railway contractors to register themselves and subsequently add work orders issued by different Railway units.
- The contractors also have to create a profile of each contract worker and update the wages provided to him/her on a regular basis.
- Railway authorities before passing the contractors’ bills have to:
- Check whether contract workers’ wage data have been uploaded by the contractor or not and
- Ensure that wages paid by the contractors conform with the minimum wages fixed by the government.
Source: Indian Express
Present Status of “Stand Up India Scheme”
What is the News?
The government has informed the Lok Sabha about the implementation of the Stand Up India Scheme. More than 81% of the accounts under the Stand Up India Scheme belong to women entrepreneurs.
About Stand Up India Scheme:
- Ministry: Launched in 2016 by the Department of Financial Services, Ministry of Finance.
- Objective: The Stand-Up India Scheme facilitates bank loans for setting up a new enterprise in manufacturing, services, agri-allied activities, or the trading sector by SC/ST/Women entrepreneurs.
- Bank Loan: It provides bank loans between Rs 10 lakh and up to 1 crore.
- The government does not allocate funds for loans under the Scheme. They are extended by Scheduled Commercial Banks(SCBs).
- Eligibility condition for Stand Up India Scheme:
- SC/ST and/or woman entrepreneurs above 18 years of age.
- Loans under the scheme are available only for greenfield projects. Greenfield signifies the first time venture of the beneficiary in the manufacturing, services, agri-allied activities or the trading sector.
- In the case of non-individual enterprises, 51% of the shareholding and controlling stake should be held by either SC/ST and/or Women Entrepreneur.
- Borrowers should not be in default to any bank/financial institution.
- Repayment: The loan is repayable in 7 years with a maximum moratorium period of 18 months.
- Duration of the Scheme: The Stand-Up India Scheme has been extended up to the year 2025.
Report of Parliamentary Standing Committee on Rural Development
What is the News?
The Parliamentary Standing Committee on Rural Development has submitted its report to the Lok Sabha.
What did the Parliamentary Panel say in its report?
Parliamentary report On Pensions to Senior Citizens, Widows and Disabled:
- Increase in Pension Amount: The Central Government must increase the small amount of pensions provided for poor senior citizens, widows and disabled people under the National Social Assistance Programme(NSAP).
About National Social Assistance Programme(NSAP):
- Nodal Ministry: It was launched in 1995. It is a welfare programme administered by the Ministry of Rural Development. The programme is being implemented in rural areas as well as urban areas.
- Aim: To provide financial assistance to the elderly, widows and persons with disabilities in the form of social pensions.
- Current Schemes under NSAP: There are five different schemes being implemented as part of NSAP:
- Indira Gandhi National Old Age Pension Scheme(IGNOAPS): Under this, senior citizens of the Below Poverty Line(BPL) households will get Rs 200 to Rs 500 a month.
- Indira Gandhi National Widow Pension Scheme (IGNWPS): Under this, widows aged over 40 years in BPL households will get Rs 300 to Rs 500 a month.
- Indira Gandhi National Disability Pension Scheme(IGNDPS): Under this, Rs 300 a month will be provided for persons aged 18-79 years with severe or multiple disabilities in BPL households.
- National Family Benefit Scheme(NFBS): Under this, Rs 20,000 are provided upon the death of a breadwinner aged 18-59 in BPL households.
- Annapurna Scheme: Under the scheme, senior citizens not receiving any pension benefit will get 10 kg of food grains (wheat or rice) per month at free of cost.
- Significance: The programme represents a significant step towards the fulfilment of Article 41 of DPSP. Article 41 directs the State to provide public assistance to its citizens in case of old age, unemployment, sickness and disablement etc.
Parliamentary report on MGNREGA:
- Delay in Payment of MNREGA Wages: The panel has pointed out the Department of Rural Development(DoRD) for delays and disparities in the MGNREGA wages and unemployment allowances.
- Example: During COVID-19, there was an increase in the demand for work under MGNREGA. However, there was an excessive delay in the release of 40% of the funds.
- Weak Implementation by States: The panel has asked State Governments to ensure proper implementation of the unemployment allowance of MGNREGA. As it has found that unemployment allowance under MGNREGA the provision is not implemented in letter and spirit at the grass-root level
- The disparity in MGNREGA Wages between States: Despite the Constitution provides for equal pay for equal work, there is a wide disparity in MGNREGA wages in different states
Source: The Hindu
LinkedIn released the “Opportunity Index 2021”
What is the News?
LinkedIn has released the Opportunity Index,2021. The index focuses on the manner in which women perceive their employment opportunities. Further, the opportunity index also focuses on how the gender gap is slowing down the career progress for working women.
About the Opportunity Index 2021:
- The LinkedIn Opportunity Index research was conducted by market research firm GfK.
- The countries that were included in the index include Australia, China, India, Japan, Malaysia, the Philippines and Singapore.
- For India, the index highlighted the difference in understanding regarding the available opportunities for men and women.
Key Findings of the Opportunity Index:
- Impact of Pandemic on Women: 9 in 10 or 89% of women were negatively impacted by the coronavirus pandemic.
- Promotions for Women: As many as 85% of women in India have missed out a promotion or other work offers because of their gender. This is significantly higher than the regional average of 60% in the Asia Pacific.
- Other Challenges faced by Indian women:
- Fewer opportunities and lower pay structure than men
- Lack of Time and family responsibilities.
- Lack of guidance through networks.
- Workplace discrimination because of household responsibilities
- Companies ‘favourable bias’ towards men.
What needs to be done?
- The government have to provide greater flexibility to women in order to increase female participation in the workforce.
- Part-Time Flexible Schedules and Maternity leaves can improve women participation in the workforce.
- There should be new opportunities for women to upskill and learn the labour market skills. It can help organisations attract, hire and retain more female talent.
Source: Business Today
Labour Ministry launches Software Applications for five All India Surveys
What is the news?
Union Minister for Labour has launched Software Applications and instruction manuals with questionnaires for five All India Surveys. The Labour Bureau is conducting these surveys. The Bureau is an attached office of the Ministry of Labour & Employment.
About All India Surveys?
The five All India Surveys, which are being undertaken by the Labour Bureau are:
- All India Survey on Domestic Workers(DW): It aims to estimate the proportion of DW in the workforce in major states and all over India. It will also analyse the Industry-wise percentage distribution of these DWs / households.
- All India Survey on Migrant workers: It aims to estimate the number of migrant workers in India. It will also collect information on their living conditions, working conditions and other socio-economic conditions.
- All India survey on employment generated by Professionals: Its main objectives are essentially two-fold:
- To estimate the total number of active professionals in the country.
- To capture the employment generated by these professionals.
- All-India Quarterly Establishment based Employment Survey: It aims to fill the data gap, related to the employment numbers, exists in the unorganized sector. It will also include establishments with less than 10 workers.
- All India survey on employment generated in the Transport Sector: It aims to assess the employment generated in the Transport Sector in India.
Significance of Survey
- It will be for the first time that the Bureau will use AI based technology intervention.
- The infrastructure will consist of real-time reporting and monitoring with advance dashboards, command and control centre.
- IT interventions will reduce the completion time of the survey by 30-40%.
Note: Besides these surveys, Labour Bureau is known for compilation and generation of vital statistics like the
- Consumer Price Index for Industrial Workers(CPI-IW) (Base year of the index is 2016).
- Consumer Price Index Numbers for Agricultural and Rural Labourers (CPI-AL/RL)
Issues in the draft rules for the Code on Social Security 2020
Synopsis – The Government drafted the rules for the Code on Social Security 2020 without considering growing informal workforce.
- During the Budget, Finance Minister highlighted the implementation of the four labour codes.
- Budgetary Allocation for the MSME sector this year was Rs.15700 Crores. This is more than double the amount allotted last year.
- This will be a positive step if it provides jobs and social security to informal workers.
What are the positive aspects of the draft labour codes?
- Social security benefits will extend to gig and platform workers.
- Minimum wages will apply to all categories of workers. They all will be covered by the Employees State Insurance Corporation (ESIC).
- Compliance burden on employers will get reduced. Because the labour codes provide a single registration and licensing instead of multiple ones at present.
Impacts of lockdown on informal workers-
- The lockdown impacted the informal sector more. This is highlighted by the Oxfam inequality Virus report. Few key findings of the report were,
- Informal workers were the worst hit– 75% out of the total 122 million who lost their jobs were in the informal sector.
- Over 300 informal workers died due to the lockdown due to starvation, suicides, exhaustion, road and rail accidents, police brutality and denial of timely medical care.
- More than 2,582 cases of violation of human rights were recorded by the National Human Rights Commission as early as April 2020.
What are the issues pertaining to the draft rules for the code on Social security, 2020?
- First, Lack of information- The Draft rules make Aadhaar based registration mandatory for receiving benefits. However, there is not much information available in the registration process.
- Second, Confusion regarding applicability-There is no specific guidelines is provided on how benefits will be applicable to all the informal sector employee.
- A question for example- Will migrant workers qualify for the social security benefits if they employed in a different state than the registered [Aadhaar based] state?
- Third, rising inequality gap- The draft rules not able to address the issues of the growing informal workforce. The growing informal workforce along with the lack of state’s accountability is responsible for rising inequality.
- Due to this, workers face the risk of human and labour rights violation. It also leads to unsafe and unregulated working conditions and lower wages and other vulnerabilities.
- There is a need to address the growing informal workforce and provide social protection, especially to the 450 million informal sector workers.
- It is important that the draft labour codes take that also into account.
TIFAC launches SAKSHAM Portal and Seaweed Mission
What is the news?
Technology Information, Forecasting and Assessment Council (TIFAC) celebrated its 34th Foundation Day. The theme of the Foundation day was: “Technology, Innovation and Economy for Atma Nirbhar Bharat”.
- It is an autonomous technology think tank under the Department of Science & Technology (DST), Ministry of Science and Technology. It was set up in 1988.
- Mandate: TIFAC identifies the technological priorities of the future like cyber-physical systems, quantum computing, green chemistry and water.
- TIFAC launched 2 initiatives: 1) SAKSHAM Portal, 2) Seaweed Mission
- Need of the Portal: The COVID-19 pandemic has compelled the labour force to return to their native lands due to loss of jobs.
- Aim: It is a dynamic job portal for mapping the skills of Shramiks (labour) vis-à-vis requirements of the MSMEs across the country.
- Features of the Portal:
- This portal will facilitate placement of 10 lakh blue-collar jobs by directly connecting Shramiks with MSMEs.
- It will help eliminate middlemen/ labour contractors. It will also help in the identification of skill proficiency level and development of Skill Cards for Shramik.
- Likewise, it will also reduce the hardship of Shramiks(labour) in finding jobs in nearby MSMEs.
- Why was this mission launched? Out of the global seaweed production, China produces 57%, Indonesia 28%. Whereas, India is having a mere share of 0.01-0.02%.
- Purpose: Under the mission, TIFAC will demonstrate a model for commercial farming of seaweeds, and it’s processing for value addition. It will boost the national economy.
- Benefits of Cultivating Seaweed:
- It is estimated that if seaweed cultivation is done in 10 million hectares or 5% of the EEZ area of India, it can provide employment to 50 million people.
- Additional benefits of Seaweed cultivation;
- Improves national GDP;
- improves ocean productivity;
- Reduce algal blooms and sequester millions of tons of CO2;
- Create a healthier ocean and can also use to produce bioethanol.
New Farm Laws and Labour Codes is the way forward
Source: The Indian Express
Syllabus: GS-3 Issues related to direct and indirect farm subsidies and Issues related to direct and indirect farm subsidies
Synopsis: The agriculture and labour reforms passed recently creates a condition for productivity and enhance growth. This benefits millions of small farmers and unorganised workers.
Farm Laws and the changes it brings:
In India, Farmers earn less than people engaged in the services sector. This difference is not common in all countries.
- An RBI study shows that a potato farmer only gets 28 per cent of the amount paid by the consumer. Across all crops, the farmgate price (the net price of the product when it leaves the farm) is 40-60 per cent less than the consumer price.
How the earlier existing laws were problematic to farmers? How the new farm laws are of help?
The Green Revolution and subsidies have expanded India’s agricultural production. But the farmers have not gained. This is because the mediators have taken 40-60 per cent of the profit. The problems with the earlier laws are,
- First, the stock limits mentioned in the Essential Commodities Act. The Act mention a certain amount of stocks to be maintained to satisfy the food security needs of India. This restricted large-scale processing units from running at full capacity. This led to the problem of food wastage.
- 30-40 per cent of vegetables and fruits are lost due to inadequate storage, processing and transportation facilities.
- New Farm Law (The Essential Commodities (Amendment) Act, 2020): The Act removed the stock limits and introduction of the contract farming act. This will bring in new investments to tap the wasted resource.
- Second, earlier under the APMC Act, only traders registered in APMCs can buy farmers’ produce. This restricted the outsiders and favoured registered intermediaries. Intermediaries used this to make a profit instead of farmers.
- New Farm Law (The Farmers’ Produce Trade And Commerce (Promotion And Facilitation) Act, 2020): The new laws amend this provision that favoured the intermediaries. Farmers now will have an option. Either sell to the traders registered or to the outsiders.
- Now private market/non-APMCs registered trader can also set up an agricultural market and compete with APMCs registered intermediaries.
- For example, Karnataka implemented the Uniform Market portal in 2014, enabling trade across taluka APMC limits without APMC fees. This increased farmer’s profit.
- First, the stock limits mentioned in the Essential Commodities Act. The Act mention a certain amount of stocks to be maintained to satisfy the food security needs of India. This restricted large-scale processing units from running at full capacity. This led to the problem of food wastage.
Labour reforms and the changes it brings:
- Parliament has passed 3 labour code bills aimed at labour welfare reforms. These codes cover more than 50 crores unorganized and organized workers in India. This also includes platform or gig workers also. These three codes were
- Industrial Relations Code, 2020
- Code on Occupational Safety, Health & Working Conditions Code, 2020
- Social Security Code, 2020.
First, multiple labour laws have not encouraged employment creation. These laws have created hindrances for job creation due to the high costs of compliance. For example, India’s employment elasticity with respect to GDP growth is 0.2. China and Bangladesh have an elasticity of 0.44. And 0.38 respectively.
- New Labour Codes: India’s labour reforms will promote growth with higher employment elasticity. This is because these codes are the simplified comprising of many prior labour laws.
What is employment elasticity?
Employment elasticity is a measure of how employment varies with economic output. For example, An employment elasticity of 1 implies that with every 1 percentage point growth in GDP, employment increases by 1%.
- Second, the old labour laws protected existing jobs at the cost of preventing new job creation.
- New codes: The new codes would incentivise the firms to create new jobs. It is also in line with the reforms being undertaken by our neighbouring countries.
- For example, Bangladesh increased formal jobs by legalising fixed-term employment and banning union activity in FDI industries. It raised the threshold for seeking prior permission for laying off workers.
Suggestions to improve further:
- India should bring in economic reforms. Aadhaar-enabled social safety nets and direct income transfer to the poor will pay off by enabling growth with a massive expansion in employment.
- The social safety nets have been created to ensure the right to food and direct income transfers to farmers. This will protect incomes of the vulnerable even as competition increases productivity and growth.
- The government should continuously communicate with those unhappy with the reforms. The government should explain how the current status quo is hurting farmers and informal workers.
Budget proposes tax on EPF interest
What is the News?
The government has proposed to make the interest earned on EPF contributions beyond ₹2.5 lakh Taxable.
Why has this proposal been made?
- The government has found instances where High Net Worth Individuals(HNIs) are contributing huge amounts to EPF. They are getting the benefit of tax exemption at all stages — contribution, interest accumulation, and withdrawal.
- Example: In 2018-19, ₹62,500 crores were deposited into EPF accounts by HNIs. The largest EPF account has a ₹103 crore balance.
- Hence, this proposal is aimed to exclude high net-worth individuals(HNIs) from the benefit of high tax-free interest income on their large contributions.
Employee Provident Fund(EPF) Scheme:
- EPF is a social security scheme under the Employees’ Provident Funds and Miscellaneous Provisions Act,1952
- Managed by: The scheme is managed under the aegis of Employees’ Provident Fund Organization (EPFO).
- Coverage: EPF accounts are mandatory for employees earning up to ₹15,000 a month in firms with over 20 workers.
- Contribution: Under the scheme, an employee has to pay a 12% contribution towards the scheme. An equal contribution is paid by the employer. The employee gets a lump sum amount including self and employer’s contribution with interest on both on retirement.
- Limit on Employer’s Contribution: In Budget 2020, the government had capped the contributions by employers into funds EPF or the National Pension Scheme at ₹7.5 lakh a year.
- However, government, as well as private-sector employees, are allowed to make voluntary contributions over and above the statutory deductions into the general provident fund(GPF) or EPF respectively.
Source: The Hindu
Evaluation of Budget 2021
Source: The Hindu
Gs2: Parliament and State Legislatures- Budgeting
Synopsis: The evaluation of Budget 2021 is done on three parameters. First, on the credibility of the Budget. Second, it’s potential to deliver adequate domestic output and jobs. Third, on how the Budget raises resources.
What is the Credibility of the Budget 2021?
- Budget 2021 scores high on credibility. Because, unlike previous budgets, Budget 2021 has taken into account the real estimates of revenue receipts. Moreover, it has recognised the ‘off-balance sheet’ expenditures.
- This has resulted in arriving at real fiscal deficit numbers that are much higher than expected. It is 9.5% of the GDP for FY21 and 6.8% of the GDP for FY22. But disclosing real fiscal deficit has the following Significance
- One, realistic revenue budgets will reduce the pressure on tax authorities to engage in tax terrorism.
- Two, it will allow governments to release its payments and refunds on time.
- Three, focus on the ‘real’ numbers will help in informed decision-making and planning to improve our fiscal balance.
Steps taken to provide adequate domestic output and jobs
- Budget 2021 signals a shift away from the revenue expenditure towards Capital Expenditure. Capital expenditure in FY22 is budgeted to increase by 26% over FY21 due to increased focus on areas such as infrastructure, roads, and textile parks.
- The budget also promises to improve health, education, nutrition and urban infrastructure.
- Along with this, efforts are being made to increase domestic jobs. It includes reform of labour laws, corporate tax rate cuts, and production-linked incentives.
What steps were taken to raise resources and improve investment?
- The Budget focuses to raise resources through disinvestment and asset sales, rather than via additional taxes. It reduces the tax burden on people.
- The Finance Minister also announced the creation of a new Development Financial Institution to facilitate and fund infrastructure investments.
- There were also efforts to revive our stressed financial services ecosystem. The Finance Minister announced the creation of a government Asset Reconstruction Company, or ‘bad bank’, to reduce the non-performing assets that are spread throughout the industry.
- The government should also help to revive other sectors who are suffering from chronic stress. Examples are financial services, power, real estate, telecom, airlines and shipping, contact-based services and micro, small and medium enterprises.
- Also, taking lessons from the global financial crisis in 2008, the government should not assume that a revival in consumption and government spending would automatically result in durable growth. Hence, the Government needs to make efforts to ensure adequate growth in domestic output and jobs.
Impacts of devaluing domestic work
Source: Indian Express
GS-2:Government Policies and Interventions for Development in various sectors and issues arising out of their Design and Implementation
Synopsis: There is a negative impact of devaluing the household care activities of women, on society.
- The following incidents have brought the issue of valuation of Women’s household activities.
- Recently, Kamal Hassan the leader of the Makkal Needhi Mayam (MNM) party made an election promise of a salary for Women’s unpaid care work at home.
- A recently released Malayalam film, The Great Indian Kitchen has highlighted the hard labour of women in the kitchen.
- As per time-use survey 2019, nearly 4.5 lakh Indians women spend nearly five hours every day on unpaid domestic work. This time duration is 98 minutes daily for men.
Why household care activities by women need to be valued?
- First, like other work, household care work demands skill, creativity, and organization.
- Second, The household work performed by a majority of Indian women helps to sustain households. Also, it enables men to take up productive paid jobs, without hindrance at home.
- Third, the culture to take up unpaid care activities at home by women is one of the leading causes for their declining labour force participation. (one of the lowest in the world).
- Fourth, It denies women an opportunity in a formal employment. For example,
- A study by economist Ashwani Deshpande found that the gender gap in domestic work reduced during the lockdown, but widened again when many men returned to employment.
- Fifth, it compromises the rights of women to participate in a democratic protest. For example,
- A recent statement by SC chief justice that women farmers from Punjab should leave democratic protests and return home.
Is Paying salary for housework by the state a good decision?
The proposal will only recognize the value of women’s household care, but it will not address the following issues.
- First, the proposal does not challenge the notion of fundamental hierarchy in the patriarchal home. It establishes that a woman’s place is in the home.
- Second, a salaried worker is entitled to bargain for higher wages, and exit her workplace. But, such negotiations cannot take place at home.
- Third, a woman cannot get a fair price for her domestic works at her home. It is because the household care work is not seen as valuable in fundamental societies.
How this practice of devaluing household care work affects society?
- Impact on marginalized people: The practice of devaluing household care work allows caste-privileged women and nearly all men to pass on this work to those from lower castes and the marginalized for low wages.
- Impact on work culture: It creates a work-culture that gives preference to males. It is because they can afford to work 24×7 and can ignore the demands of the home.
- Impact on domestic workers: It leads to low wages paid to domestic workers. It is evident from the struggle of ASHA workers.
Removing the hierarchies of patriarchy and making women independent at home will make the family a happy place.
Trends in Housework valuation
Synopsis: The work women perform for the family should be given due recognition and valued at par with a men’s work.
Kamal Haasan’s Makkal Needhi Maiam party recently promised salaries for housewives as a part of the party’s election manifesto, has invigorated the discussion on the acknowledgment of domestic work as work.
Read more – Wages for housework: An Analysis – ForumIAS Blog
State of household work in India
159.85 million Women stated household work as their main occupation whereas only 5.79 men referred to it as their main occupation in the 2011 census.
- As per Time Use in India-2019 Report, Indian women spend 299 minutes a day on unpaid domestic services for household members. Whereas men spend just 97 minutes.
- The economic value of services provided by women is equivalent to making $612.8 billion annually.
Global trends on the recognition of housework
Male and female domains have been marked separately for centuries. Market is considered as a male domain whereas home is considered as a female domain. These segregations justified husband’s control over family assets.
- Until 1851, Women had no right over their own earnings in or out of the home, all over the world. Their wages used to be collected by husband as it was considered his right back then.
- Shortly after 1850, laws in US started allowing wives with property rights on earnings from their personal labour.
- However, after civil war economic census in US, household worked were tagged as unproductive. It also excluded earning of women engaged in income producing work.
Trends in India
- The Married Women (Protection of Rights) Bill, 1994 provided that a married woman shall be authorised to have an equal share in the property of her husband. It also provided women with a right to dispose of her share in the property by way of sale, gift, debt, will or in any other manner.
- Census 2001 which had categorised those who provide household services i.e., about 36 crore women in India as non-workers.
- The United Progressive Alliance government had suggested a monthly ‘salary’ for wife by her husband in 2012.
- Supreme Court in Rajendra Singh case, 2020 observed that the services offered out of love cannot be calculated with money.
- There should be measurement and quantification of unpaid domestic activities of women. Their calculation in GDP so that the actual economic contribution of women is highlighted. the United Nations committee on elimination of discrimination against women.
Women on one hand are denied equal rights and on the other hand are compared to goddesses in our country. Matrimonial property laws do give women their share but only when the marriage is broken and so there should be a bill to safeguard women’s interest even during the marriage.
Wages for housework: An Analysis
Recently, Kamal Haasan’s political party, Makkal Needhi Maiam, proposed a due recognition to homemakers. The Political party included payment for homemaker’s domestic work as a part of their election manifesto.
The proposal reopened the academic debate of Paying women for their domestic and care work.
Payment to domestic care work was first demanded by the Third National Women’s Liberation Conference, in England in 1972.
Is it a new concept to India?
No, it is not a new concept to India.
- In 2010, the National Housewives Association tried to seek recognition as a trade union. But the deputy registrar of trade unions rejected the proposal on the ground that housework is neither a trade nor an industry. As Home and market for centuries were considered as two distinct spheres.
- In 2012, the Ministry of Women and Child Development considered mandatory salary for housework done by wives. It considered the proposal that wives will receive a salary from Man (Husbands). But the proposal never materialised.
Need to recognise household work:
First, According to International Labour Organization, there is a huge difference between the care responsibilities of women’s and men’s care. Women performs 76.2 percent of total hours of unpaid care work. This is three times more than similar work performed by men. In Asia and the Pacific regions, this figure rises to up to 80%.
Second, Housework demands 24*7/365 days of effort and sacrifice. Domestic work is essential for vulnerable persons in the house such as older persons, sick persons, children, etc. Thus, it should be recognized as a profession with same entitlements as paid employment.
Third, A large number of women living with domestic violence and other forms of cruelty. This is because they depend economically either on husband or on any other member of family.
For these reasons in 1991, The UN Committee on the Elimination of Discrimination Against Women, recommended measurement and quantification of domestic activities performed by women. This is to highlight the economic contribution of women.
Advantages in recognising Housework:
First, as per Shashi Tharoor, recognising housework will enhance women’s power and autonomy. This will lead to a recognition of the value of unpaid work performed. It will result in near universal basic income.
Second, recognising the housework will put homemakers at the same level as other professions such as doctors or office workers. Social protection benefits can be made available as a next step.
Third, it will improve gender equality. Housework salary will provide economic freedom and help women to live with dignity.
Fourth, Women will have the ability to choose the work they desire. After recognition, women can take either office work or housework, based on the level of income. Thus, women can overcome time poverty (shortage of time available towards personal requirements such as leisure, recreational activities) and can achieve ‘work-life balance’.
Fifth, it can lead to accurate National Income Accounting and GDP calculations of our economy. At present national income calculations not included the domestic care work performed. Thereby underestimating the GDP at present.
Lastly, recognising the housework will revolutionise the role of women in our society.
Challenges associated with recognition of housework:
First, the calculation of the monetary value of care work: In the Arun Kumar Agrawal v. National Insurance Company (2010) case, the Supreme Court acknowledged the contribution of the housewives as invaluable. The court also observed that it cannot be computed in terms of money.
Second, if recognised Who will pay the money?
- If husbands are entitled to pay Housework: In this case, the total household income will remain the same unless the husband’s income is improved. There is a high chance of housework is not getting paid to their wives.
- If the government is entitled to pay Housework: It will put an undue burden on State and there is a high chance of Fiscal Deficit targets were not met.
Third, it might create a new social norm that domestic and care work is ‘women’s work’, as they are being paid for it. This will strengthen the patriarchal mindset and makes redistribution’ of the burden of unpaid work impossible. This will reinforce the gendered division of roles.
Fourth, Practical implementation is highly questionable. Legal recognition does not always mean protection. This is evident from the equal inheritance rights to daughters were not fulfilled to the majority of women in India. Apart from that one cannot determine the leave policy, Loss of Pay if wife went to her home town etc.
Fifth, recognising domestic work will reduce women’s potential in education, talent etc. Many talented women might be forced to perform household work as it is recognised.
Sixth, it might lead to the commodification of housework and personal care, like that of surrogacy.
We need to strengthen awareness, implementation, and utilization of other existing provisions like;
- Right to reside in the marital home,
- Streedhan and Haq Mehr (amount entitled to Muslim women from her husband under marriage contract),
- Inheritance rights as daughters
- Free legal aid to women during the instances such as domestic violence, divorce etc.
Apart from that, Husbands should support wives in their daily housework. To perform that better parenting is required by the present generation. Parenting should focus our boys to be sons, brothers, husbands, and fathers who would respect women and women’s rights.
Women should be encouraged to reach their potential through quality education, opportunities of work, gender-sensitive and harassment-free workplaces.
There is another idea better than recognising housework. It is the idea of transferring Universal Basic Income (UBI)(unconditional cash payment to low-income households) to the account of women members of family. This will put the money directly in the hands of women and not stress government as significant as the recognition of housework.
Formalising the work of community workers
Synopsis: Government should strive to formalise the work of community workers such as Anganwadi, ASHA and National Health Mission workers to make them accessible for various social security benefits such as safety, insurance, risk allowance and fixed wages etc.
- In India, there are about a lakh ASHA worker, 1.3 million Anganwadi workers and another 1.2 million Anganwadi helpers. (Community workers)
- At present, community workers are classified as “honorary workers” and are denied of minimum wages, leave and other conditions that is available to formal workers.
- Even in the best paid states, this honorarium is not even close to the government-mandated minimum wages offered to workers doing comparable jobs.
- Also, the state by preferring to call them as “volunteers “denies the opportunity to recognise their crucial work as care service providers.
- This led to the two-day nationwide strike by Anganwadi, ASHA and National Health Mission workers demanding safety, insurance, risk allowance and fixed wages during the pandemic
What is the importance of community workers to society?
- Firstly, during the COVID-19 the Accredited Social Health Activists (ASHA) and Anganwadi workers, women “volunteers” functioned as the frontline warriors in the battle against the pandemic.
- Second, these community workers serve as the connecting link between the community and the state machinery. This was very much visible when there was uncertainty and fear of the virus.
- Third, the services of community workers are essential to facilitate localised approaches to problems as they have robust contacts at the grass roots.
What is the way forward?
- Firstly, there is an urgent need to recognise Community workers as workers. It can be done by Implementing the recommendation of Parliamentary Standing Committee on Labour to formalise the work of community workers.
- Second, Recognition of care work in the public sphere could also help in settling the issue of gendered and unequal division of house work and unpaid care burden.
It is high time that the state recognises the contributions of these women and accept them as workers. The recognition of ASHA and Anganwadi volunteers as workers will be a tribute to their contribution during the pandemic and also it gives a fresh start towards the structural understanding of women’s labour and their status in the labour market leading to Gender sensitive policy making
Paying women for domestic and care work
Synopsis: Paying women for domestic and care work will not reduce or redistribute their burden. It will only lead to mere recognition of their efforts.
- Women bear a disproportionately high burden of unpaid domestic work and care work in India.
- According to the all-India Time Use Survey (2019) data, females bear more than 83% of the burden of domestic and care work both in Tamil Nadu and India.
- To end this disparity, recently, Kamal Haasan’s political party, Makkal Needhi Maiam, proposed that homemakers should get due recognition through payment for their work at home.
- This proposal has generated curiosity and reopened the unsettled academic debate of Paying women for domestic and care work.
Can the proposed policy address the huge gender disparity in unpaid care work?
Evaluation of Makkal Needhi Maiam party’s proposal reveals that though it will be a progressive step, it has the risk of furthering the gender disparity in unpaid work within homes.
- According to economist Diane Elson (2017), the public policy should aim at closing the huge gender gap in unpaid domestic and care work through ‘recognition, reduction and redistribution’ (Triple-R).
- The Makkal Needhi Maiam party’s proposal only satisfies the first component of Triple-R, that is ‘recognition’.
- Since it is women who predominantly carry out unpaid domestic and care activities, often at the expense of their employment prospects and health, the monetary reward is a recognition of their contribution to the well-being of the household and the opportunities forgone by women. The proposal appears progressive, for this reason.
However, the proposal also has the potential to increase women’s burden. This is because
- Firstly, paying monetary benefits will endorse the social norm that domestic and care work are ‘women’s work’, for which they are being paid.
- Secondly, paying monetary benefits for women makes redistribution’ of the burden of unpaid work impossible. This is because, paying women for domestic and care work will give Rights to men that women are bound to do these unpaid activities as they are being compensated.
- Instead of incentivising men to participate more in household work and reducing women’s burden by redistributing the responsibility, the current proposal might do the opposite.
The electoral promise of Paying women for domestic and care work cannot possibly address the ‘strategic’ gender needs of reducing and redistributing women’s burden. What is needed is to Incentivise men, to participate more and spend longer hours in sharing unpaid work.
Issues in wages Against Housework and Alternatives to it
Synopsis- It is important to recognise the value of unpaid domestic work. However, creating value isn’t always about fair remuneration. A salary to women for domestic work will institutionalise the idea of men as ‘providers.
Introduction– Recently, Kamal Hasan’s party, Makkal Needhi Maiam, promised salaries to housewives as a part of its electoral campaign in Tamil Nadu.
Shashi Tharoor also said that monetising the services of women homemakers in society will enhance their power and autonomy and will lead to a recognition of the value of unpaid work. He also emphasised on creating near-universal basic income.
Origin of demand for wages against housework-
- It was first raised at the third National Women’s Liberation conference in Manchester, England. The International Wages for Housework Campaign (IWFHC) was formed by Selma James in 1972.
- In India, the National Housewives Association, in 2010, tried to seek recognition as a trade union. But it was rejected on the ground that housework is not a trade or an industry.
- To empower women financially and help them live with dignity, in 2012, the government announced that it was considering mandating a salary for housework to wives, from husbands. But it never came to force.
Status of majority of women in their family-
- Household works require efforts and sacrifices throughout 24/7, 365 days a year, still they face domestic violence and cruelty due to their economic dependence on others, mainly their husbands.
- As per the data of the NSSO, only about a quarter of men and boys above six years engaged in unpaid household chores, compared to over four-fifths of women.
- Every day, an average Indian male spends 1.5 hours per day in unpaid domestic work, compared to about five hours by a female.
Consequences of the paid domestic work
Recognising the value of unpaid domestic work is not always about fair remuneration. It may not lead to all positives;
- Men paying for wives’ domestic work could further enhance their sense of entitlement. It may also put an additional onus on women to perform.
- Ethically, buying domestic labour from wife will formalize the patriarchal Indian family where the position of men stems from their being “providers” in the relationship.
- Moreover, legal recognition does not always mean protection. For instance, despite legal recognition of equal inheritance rights, the majority of women are not receiving that.
What are the alternatives to wages for housework?
- First- Dowry can be converted to the policy as it shows some gains received by daughters from the parental property (equal inheritance rights). It would be more effective than salary for household work.
- Second– Rather than creating a new provision of salary for housework, we need to strengthen awareness, implementation, and utilization of other existing provisions like;
- Right to reside in the marital home,
- Streedhan and haq mehr,
- Inheritance rights as daughters
- Free legal aid and maintenance in instances of violence and divorce
- Third- Women should be encouraged to reach their potential through quality education, access and opportunities of work, gender-sensitive and harassment-free workplaces.
- Fourth– Husbands should support wives in their daily housework and should not burden their wives for the work which they can do by themselves.
- Fifth– We should raise our boys to be brothers, sons, husbands, and fathers who would respect the women and will fight for their rights.
Just as we do not want women to commodify their reproductive services and we banned commercial surrogacy in the country. On similar lines, we should not allow the commodification of housework and personal care.
Once the above-given conditions are assured to the women, they will be able to exercise freedom for themselves and will be able to decide whether to work inside or outside of the home.
Should There Be Wages for Housework?
Synopsis- MNM led by Kamal Haasan promised to recognize HouseWorks. Efforts by historical movement to provide wages for HouseWorks, highlighted many challenges in doing that.
- Makkal Needhi Maiam MNM, led by its founder Kamal Haasan has promised that homemakers’ will get their due recognition through payment for their house works which hitherto has been unrecognized and unmonitored.
- According to International Labour Organization, women perform 76.2 per cent of total hours of unpaid care work, more than three times as much as men. This figure rises to 80% in Asia and the Pacific.
- The debate around wages for housework remained unresolved within the women’s campaign- ‘wages for housework movement’.
What is wages for housework movement?
The International Wages for Housework Campaign started in Italy in 1972 as a feminist movement that highlighted the role of gendered labour in the home and its connection to the production of surplus value under capitalism. The movement further spread to Britain and America.
Though women’s work helps men to be productive, this contribution is largely unnoticed. It is extremely difficult to quantify how much women contribute to the economy with their unsung work but it would run into the billions or beyond.
What were the hurdles faced in demand of wages for housework?
‘Wages for housework’ would only imprison women further within the household as-
- Paid housework would reinforce gendered division of roles, keeping women in their traditional role of wife and mother.
- A salary would isolate women from the community and prevent men from sharing housework.
- A salary would legitimize their oppression.
Thus, the idea behind women’s movement should be made them free from daily domestic chores and allow them to participate in social sphere and further including paid employment outside the household.
What are the issues that need to resolve before providing wages for housework?
Though MNM has made a promise, but there are few important questions or challenges that need to answered to make it look feasible;
- Once salaried, housework would be controlled in terms of number of hours, quality of work, and so on. Who would exercise this control and under what terms?
- Would it include women only, who are full-time homemakers?
- What about women workers who earn an income from home by stitching clothes, selling cooked meals or are engaged in petty trade and identified a ‘Housewives’?
These issues cannot solve easily. Therefore, the idea of a Universal Basic Income (UBI) an unconditional cash payment to low income households and should be transfer directly to women.
Women constitute almost half the population and their needs and issues have to be addressed.
- Paid domestic works are done predominantly by women in other’s houses. Thus, a National legislation for domestic workers containing guarantees foe minimum wages, and the workers’ status and rights should be enacted.
- The demand of women domestic workers in Tamilnadu address the issue of value of housework in their demands i.e. an hourly minimum wage, a weekly day-off, an annual bonus.
- Thus, all political parties must seriously consider their demands as will be helpful in asserting the dignity of housework and making it a visible and valued form of labour.
The Wistron Dispute and China’s lessons.
Synopsis: Wistron case shows that hasty labour laws violating labour rights is economically suicidal and damaging to India.
Recently, contract workers attacked the Wistron’s iPhone assembly that resulted in property damage of worth ₹50 crore.
- According to a preliminary inquiry report by the State labour department into the incident Wistron and its labour contractors violated many provisions of the laws that resulted in sacking of its vice-president for its India operations.
- Also, The Apple Corporation has put further business on hold until Wistron addresses the labour dispute.
- The violence at Wistron unit will negatively affect India’s efforts, to attract foreign direct investment through production-linked incentive (PLI) scheme, to boost domestic production (‘Make in India’) and India’s step towards Atmanirbhar Bharat.
What are the reasons for such violence?
- First, non-payment or delay in payment of wages along with violation of labour laws, such as non-issuance of the wage contract, employing women workers in night shift without providing adequate safety etc has led to the violence.
- Second, the anti-labour reforms brought by Karnataka government’s ordinances to amend Factories Act 1948, to attract foreign companies seeking to relocate from China, brought deep discontent among workers in the State.
- For example, it repealed the rule of standard eight-hour working day with a 12-hour working day and also brought overtime related changes.
- Third, low living wages. For example, the average daily earnings of casual workers in urban India in 2018-19, as per the official Periodic Labour Force Survey is well below the official living wage as defined by the Seventh Pay Commission for central government employees.
What India can learn from China?
Although some of the states might be following the labour policies of China, but there are few positives in China’s labour policy that need a consideration
- China mandates employers to provide dormitory accommodation for workers close to factories. Factory-provided dormitory accommodation is the principal reason for slum-free Chinese industrial cities, unlike in India.
- Apart from this, to subsidise production costs, China’s local governments compete with each other to offer excellent physical infrastructure and ensure adequate credit to industrial enterprises through the national development banks. They also act as midwives for Industrial promotion.
Indian government policy to emulate only china’s stringent labour policies such as long working days and flexible use of labour, while ignoring the social benefits offered by china to its labours are bound to face resistance.
Why violence happened at Wistron-Apple Facility?
Wistron Violence and issue of contract workers
Synopsis: The recent case of violence at Wistron’s iPhone manufacturing plant also highlights the challenges faced by contract workers in India.
Why Wistron Violence happened?
- Recently, Wistron’s iPhone manufacturing plant was attacked by thousands of contract workers over alleged non-payment of wages, resulting in theft and loss of goods worth hundreds of crores.
- Whereas, Wistron stated that it had deposited the money in the account of the contractor (staffing firms) and the action will be taken against that firm.
- In response, Apple has put Wistron Corp. on probation by not giving new orders after an audit of the serious lapses in labour practices.
As per the initial findings, some serious lapses have been found out in labour practices.
- Wistron became fully operational in August 2020, with around 5,000 employees and rapidly scaled up its contractual employee strength from around 3,000 to nearly 8,500, due to rising demand.
- It was followed by increase in shift timing from eight-hour to 12-hour shifts. On the other hand, contractors were not paying the workers their full wages as per their contract. Wages were being paid very late and in some cases slashed from Rs 22,000 to Rs 8,000 in some cases.
- There was no employee grievance redressal system in place. Final argument which triggered violence was broke out over the attendance system not capturing the exact work hours of workers.
Who are contract workers?
- Contract workers are hired by the contractors’ company and paid by them only, they are not on the payrolls of the company on whose shop floors they work.
- Company transfers payments to contractor companies as per the agreements and contractor companies make payment to the contract workers. Principal employers/companies are responsible for the welfare facilities of the workers.
- As per the data of the Annual Survey of Industries (2017-18), 36.4 percent of total production workers in the registered factory sector, are contract workers.
What are the issues faced by the contract workers?
- Firstly, Contract workers are often tasked with the same jobs as regularly employed workers but have limited social security benefits, receive lower wages, and operate under poor working conditions.
- Secondly, Sub-contracting itself has become multi-layered. In many cases, Subcontractors themselves are Hiring labor from multiple subcontractors/third party work supply firms. Setting accountability in this case becomes very difficult.
- Third, Despite providing the provision of Fixed-term employees in the Code on Industrial Relations, firms continue to rely on contract workers, because
- The cost of hiring contract workers continues to remain lower compared to cost of hiring fixed-term employees, who are required to be paid pro-rata wages and social security including gratuity.
- In the case of contract workers monitoring, legal compliance and litigation costs are shifted onto the contractors.
|Code on Industrial Relations (2020)|
- Fourth, Code on Industrial Relations is itself vague regarding major aspects of contract workers
- The basic issue is that the provisions of fixed-term employment in India are open-ended i.e. does not specify a minimum or maximum tenure for hiring fixed-term employees or the number of times the contract can be renewed.
- Workers may find themselves moving from one fixed-term contract to another, without any assurance of being absorbed as permanent workers by their employer.
- Fifth, Labour Code on Occupational Safety and Health provides exceptions by allowing the use of contract workers in core activities under certain conditions such as a sudden increase of volume of work in the core activity which needs to be accomplished in a specified time.
What should be done?
- Firstly, the use of contract labour in core activities excluding services such as security, catering and sanitation, should be completely prohibited by government.
- Second, Conflict between the Code on Occupational Safety and Health and Code on Industrial Relations regarding contractual labours should be resolved immediately. Former allows contract labor in some exceptions.
- Third, it is notable that Wistron increased the no. of contractual workers after the launch of Production Linked Incentive (PLI) Scheme, which is limited for 5 years and on the incremental sales. Such employment generating schemes should have a provision that the jobs generated should be on the firms’ payroll and not the contractors’.
- Fourth, As Atmanirbhar Bharat Rozgar Yojana, is offering provident fund subsidies to employers for hiring new formal workers. This together with PLI scheme should be leveraged to generate formal employment.
- Fifth, as an immediate step, a compulsory grievance redressal mechanism for contractual workers should be established.
Issues in Labour codes
Context: The labour codes will only better India’s ‘ease of doing business’ ranking instead of improving conditions of employment
What is the Significance of Labour codes?
- Will generate employment and secure the basic rights of the workers.
- It will universalise the right to minimum wage of workers and social security entitlements.
Why, have the labour codes not been universally welcomed by workers?
- Social Security net is not universal: The codes mandate benefits of Employees’ State Insurance (ESI) and Provident Fund (PF) only for workers belonging to establishments employing 10 workers or more. This leaves out nearly 80% of all Indian workers in the informal sector from the ambit of these benefits.
- Inadequate hospitals and dispensaries under ESI
- The ESI employed around six doctors per one lakh beneficiaries in 2016, as against the World Health Organization norm of 100 doctors.
- With the new codes seeking to cover 20% of all workers, the membership would further increase to around 10 crore workers a three-time increase over the membership in 2019 (3.6 crore). The available capacity of the hospitals and dispensaries would evidently be inadequate.
- Disparity on ESI coverage between states: The ESI coverage follows the map of industrial growth in the country. Thus, in industrialised States like Karnataka and Tamil Nadu, the ESI covered is around 20% of the population as beneficiaries in 2016 whereas, for Bihar the ESI covered is only 0.7%.
- Abridgement of cess-based welfare boards: The new labour codes also does away with a number of existing cess-based welfare schemes. For example, the Beedi Workers Welfare Board which covers five lakh home-based women workers.
- Fixed Minimum wage is meager: The floor wage announced more recently by the Finance Minister of ₹202 is way less compared to the Labour Ministry’s Expert Committee recommendation on Wage in 2019 i.e. is ₹375 per day.
Central Trade Unions strike
Context- Trade unions called for nationwide strike to protest government policies.
Why Central Trade Union (CTUs) have called for a nation-wide strike and what are the demands
Central Trade unions called for national wide strike to protest against anti-farmer laws, anti-worker labour codes, privatization of public sector and the corporatization policies of the government.
Trade union’s demands-
- The demands of the joint platform include cash transfer of Rs 7,500 per month for all non-income tax paying families and 10 kilograms free ration per person per month to all needy people.
- Expansion of MGNREGA, the rural employment guarantee scheme, to provide 200 days’ work in a year in rural areas at enhanced wages and also extension of the employment guarantee to urban areas.
- Withdrawal of the “draconian circular on forced premature retirement of government and PSU employees”.
- Pension to all– scrapping NPS (National Pension System) and restoration of earlier pension with improvement in Employees’ Pension Scheme 1995 [EPS-95].
What are the key concerns with new labour codes?
- Against the Interests of Employees- The codes provide the liberty to industrial establishments to hire and fire their employees at will.
- The new labour codes dilute workers’ rights in favour of employers’ rights.
- Inspection system has been diluted in the Wage Code.
What are the other options that trade union have to dilute this resolution?
Trade unions have six options-
- Central government did not conduct an effective and sustaining social dialogue and at the State level, social dialogue institutions are largely absent or weak.
- The new Labour codes ignore the recommendations of Parliamentary Standing committee.
- And the labour reforms bills passed in the absence of the Opposition.
- International Labour Organization’s intervention– Trade union did wrote to ILO, seeking its intervention to protect worker’s rights but the ILO’s intervention only provide provided a temporary respite to trade unions as the government did what it has been doing.
- Approaching the judiciary- Trade unions must shed their judicio-phobia and approach to judiciary provided they have strong legal grounds to challenge reforms introduced by Central or State governments.
- Strike alone will not make much difference– Trade unions must explore other avenues such as seeking the ILO’s intervention, judicial action and social dialogue
- This strike is a reminder of this potential, positive reconstruction of laws.
Context – Declining female labour force participation.
Why in news-
Year 2020 marked as-
- The nearly fifty years since the Committee on the Status of Women in India (CSWI) submitted the report ‘Towards Equality’ to the United Nations (UN).
- It focused on women-sensitive policymaking in India, providing a fresh perspective on gender equality.
- The 25th anniversary of the Beijing Platform for Action- A benchmark for analyzing the condition of women and State-led empowerment.
What is the status of women’s workforce in India?
- Workforce participation: India demonstrates one of the lowest labour participation rates for women, which have been consistently declining since 1950.
- The Periodic Labour Force Survey (PLFS), 2018-19 indicates a fall in absolute employment for women.
- Women faced a decline in labour participation rates (from 2011 to 2019) in rural areas from 35.8% to 26.4%, and stagnation in urban areas at around 20.4%.
- Poor worldwide Rankings:
- Global Gender Gap Index– India has been ranked 149th among 153 countries in terms of women’s economic participation and opportunity published by World Economic Forum.
- 2019 Oxfam report– Gender wage gap highest in Asia. Based on hourly wages, women earn, on average, 65.5% of what their male colleagues earn for performing the same work.
- Women in agriculture:
- Lack of ownership of land– As many as 87 per cent of women does not own their land, only 12.7 per cent of them do.
- Status of women in other sectors of the economy:
- Manufacturing sector – around 14% of the female labour force.
- Women account for only 19.9% of the total labor force in India
- The service sector sees women disproportionately involved in care-work, over 60% of the 4.75 million domestic workers are women.
- The non-availability of white collar jobs, disproportionate long hours and lesser job security narrow downs the job opportunities for educated women in India.
What are the impacts of COVID-19 pandemic and new labour codes on women workforce?
- COVID-19 impact– Recent job stagnation and high unemployment rates for women, exacerbated by the Coronavirus pandemic, also keep women out of the labor force.
- Job lost in pandemic– The Centre for Monitoring Indian Economy (CMIE) data showed that 39% of women lost their jobs in April and May compared to 29% of men.
- New labour codes impact– The labour reforms disregard women’s work conditions.
- The codes acknowledge neither the gender wage gap nor non-payment of wages and bonuses
- Ignore informal mostly women workers in terms of social security, insurance, provident fund, maternity benefits, or gratuity.
- There is no protection against sexual harassment at workplace.
- Maternity benefits remain unchanged from the 2017 amendment
- Addressing structural issues which keep women away from the workforce is a must.
- Policy decisions need to articulate gendered concerns during public health emergencies because gender-sensitive pandemic planning may substantially mitigate these concerns.
Labour law reforms and Trade unions
Context- The new labour codes clear attempt to diminish the role trade unions.
What are the new labour laws?
The current government has introduced new versions of three labour codes in Lok Sabha which are-
- Industrial Relations Code.
- Code on Occupational Safety, Health & Working Conditions Code.
- Social Security Code.
- Labour code on wages.
- Central government has excluded trade unions from pre-legislative consultations on drafting the new labour codes.
- The new Labour codes ignore the recommendations of Parliamentary Standing committee.
- And the labour reforms bills passed in the absence of the Opposition.
What are trade unions?
A trade union can be defined as an organized association of workers in a trade or profession, formed to further their rights and interests. In India, Trade Unions in India are registered under the Trade Union Act (1926).
- Protect the interests of workers–
- Trade Unions protect the worker from wages hike, provide job security through peaceful measures.
- They also help in providing financial and non-financial aid to the workers during lock out or strike or in medical need.
- Collective Bargaining– A process of negotiation between employers and a group of employees in respect to working condition. It is the foundation of the movement and it is interest of labour that statury recognition has been accorded to Trade Union.
What are the key objectives of Trade Union Act (TUA)?
- Right to registration– The law provided a mechanism for the registration of trade unions, from which they derived their rights, and a framework governing their functioning.
- The TUA gave workers the right, through their registered trade union, to take steps to press their claims, and where necessary, as in the case of a malevolent employer, agitate for their claims and advance them before the government and the judiciary.
- Immunity from civil suit in certain cases- No suit or other legal proceeding shall be maintainable in any Civil Court against any registered Trade Union in respect of any act done in contemplation or furtherance of a trade dispute.
What are the key concerns with new labour codes?
- In case of deregistration of trade union –
- The collective decision taken by its members and elected officers can be treated as illegal.
- Vulnerable against charges of conspiracy– The trade union’s members and elected officers lose their immunity from prosecution for criminal conspiracy for collective decisions and actions.
- It will lead employment dispute resolution outside the legal framework.
- The Industrial Relations Code (IRC) widens the grounds under which a trade union may be deregistered.
- Against the Interests of Employees– The codes provide the liberty to industrial establishments to hire and fire their employees at will.
- The new labour codes dilute workers’ rights in favour of employers’ rights.
A vibrant and responsible trade union environment is the requisite for inclusive growth to any economy. It checks growing inequality and falling living conditions of the working class.
If trade union is deregistered then the workers effectively lose their fundamental right to freedom of association.
Atmanirbhar Bharat Rozgar Yojana
News: Finance minister has announced the Atmanirbhar Bharat Rozgar Yojana scheme.
- Aim: To incentivize the creation of new employment opportunities during the Covid-19 economic recovery phase.
- Beneficiaries (new employees) under Scheme:
- Any new employee joining employment in EPF registered establishments on monthly wages less than Rs 15,000.
- EPF members drawing a monthly wage of less than Rs 15,000 who made exit from employment during covid-19 pandemic from March 1, 2020, to September 30, 2020 and are employed on or after October 1, 2020.
- Government Contribution: Central Government will provide subsidy for two years in respect of new eligible employees engaged on or after 01.10.2020 at following scale:
- Establishments employing up to 1000 employees: Employee’s contributions (12% of Wages) & Employer’s contributions (12% of wages) totalling 24% of wages
- Establishments employing more than 1000 employees: Only Employee’s EPF contributions (12% of EPF wages)
- Duration of the Scheme: The scheme will be operational till June 30, 2021.
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Challenges to Atma Nirbhar Bharat
Context: Making India self-reliant India or Atmanirbhar Bharat
What are the current economic challenges faced by India?
- The supply chain disruption due to national and localised lockdowns has led to supply side and demand side contraction.
- Slowdown of aggregate demand due to low, private final consumption expenditure (PFCE), investment and exports.
- Even, the consumption demand of the rest of the demography from agriculture, small-scale manufacturing and self-employed is stagnant due to low income growth.
- The investment slowdown is affecting industries like steel, cement and power and income, employment and demand.
- Along with these constraints, India has huge developmental implications on poverty, inequality and standard of living.
What are advantages for India in present labour market?
- All other manufacturing giants are ageing: For example, Japan, EU, the US, South Korea and China. Ageing population has forced them to move out of low-end labor-intensive manufacturing.
- China’s lost advantage: Due to a rise in wages, strict environmental regulations and an increase in the cost of production along with the uncertainties due to China’s friction with the US and other countries.
How to ensure Atmanirbhar Bharat?
- Incentivising the farming community: Need to shift from grain-based farming to cash crops, horticulture and livestock products. For example, the Chinese experience in the late 1970s has shown that reforms in agriculture increased rural income, leading to demand for labor-intensive industrial goods.
- Exploiting the demographic dividend: India has around 900 million people in the working-age population with an average age of 27.
- Shift the labour force from agriculture to manufacturing: For this, labour-intensive manufacturing should be promoted that can generate employment opportunities for labour force with low or little skills, along with income and demand.
- Create a competitive manufacturing sector: Need to aggressively reduce both tariffs and non-tariff barriers on imports of inputs and intermediate products that will create a competitive manufacturing sector for Make in India, and “Assembly in India”.
- Ensure free flow of Investments: Attracting multinational enterprises and foreign investors in labour-intensive manufacturing will facilitate R&D, branding, exports, etc.
- Market reforms: By rationalizing punitive land acquisition clauses and rationalizing labour laws, both at the Centre and state level.
- Human capital development: Need for large-scale vocational training from the secondary-school level, like China and other east and south-east Asian countries.
The COVID-triggered economic crisis can be an opportunity for India if we create a development model that brings opportunities for the people at the bottom of the pyramid. A competitive and open economy can ensure Atmanirbhar Bharat
Need for Right to work in India
Context: Need for Right to work in India.
What is the legal status of the right to work internationally and in India?
- International: The Universal Declaration of Human Rights includes the right to work in the International Covenant on Economic, Social, and Cultural Rights.
- In India: Though the Right to work is not a constitutional right but it was accorded Statutory rights through the MGNREGA act. Under MGNREGA, a person can hold the state accountable for not fulfilling the right by demanding an unemployment allowance.
Need for Right to work?
- Failure of market: The right to work is not only about lack of adequate work but also the profound lack of public goods and assets. It is the state’s responsibility to provide these public goods when the market fails provide welfare.
- Destruction due to Development: The path of development has not only created adequate employment opportunities but it has also resulted in displacement of people from their means of livelihood.
- Jobless growth: Along with this, the failure to create new jobs by the government and advent of automation leading to jobless growth there is a need to think on the right to work and make it legally enforceable.
- Statutory backing can be repealed any time: Also, the statutory backing given to right to work in India through MGNREGA can be withdrawn through legislative actions.
How can we make ‘the right to work’ in India a reality?
- One approach is through Decentralised Urban Employment and Training, or DUET.
- For DUET, urban local bodies can issue job vouchers to certified public institutions such as schools and universities for pre-approved tasks. These institutions can only use the vouchers to hire labor for pre-defined tasks e.g. painting school buildings.
- Along with MGNREGA, an Urban Employment Guarantee can be enacted. In the wake of COVID-19, three States Odisha, Jharkhand, and Himachal Pradesh have launched measures along these lines.
- States need to expand spending on providing basic services such as health, education, and housing, and in providing them, employment can be generated.
- For example, Thailand, which has a universal basic healthcare system that is labor-intensive. It solves two problems, builds social infrastructure, and simultaneously creates jobs.
Do the 4 labor codes dilute worker rights?
- India is a labour surplus economy, so in the capital-labour bargaining process, labour is structurally weak in India.
- To balance this government needs to legislate protective labour laws however the four labour codes tries to achieve the opposite.
- An effective employment guarantee programme can be an excellent solution to the structural weakness of labour. it automatically creates the conditions for better treatment of workers.
‘Right to work’ is not only about employment opportunities but also the right to earn one’s own livelihood without any obstruction and in a dignified way. Dignity of living should be assured through fair work conditions, such as being paid a fair wage, regulated work hours.
Unemployment in india
Context: It is for the first time that unemployment has become a big issue in Bihar assembly elections.
What are the issues?
- Impact of lockdown: The economy contracted severely, Bihar saw millions of poor migrant labours returning home as U.P. and Bihar have a disproportionately high number of out-migrants.
- Joblessness an issue this election: An opposition leader promised 10 lakh government jobs in his first Cabinet meeting, if made Chief Minister; the Janata Dal (United)/BJP countered him by promising to create 19 lakh new jobs.
- Labour force: For nearly 10 years after 2003, GDP growth averaged more than 7% per annum. Non-agricultural jobs in India were generated at a rate of 7.5 million per annum. But only 2 million of the youth were joining the labour force (as enrolment in schools/ colleges was increasing).
- New non-agricultural jobs pulled over 5 million per annum out of agriculture and into construction and other work, where Bihari and U.P. labour got absorbed in large numbers.
- Demonetisation and the reluctance to competently handle the non-performing assets crisis sent the economy into a downward spiral.
- Unemployment rise: The number of unemployed educated youth and a disheartened labour force (youth who completed education and training but were still neither in jobs nor searching for jobs actively) increased to unprecedented levels by 2018.
- Self-employment decline: It is clear that despite the government’s measures (example, MUDRA) to promote self-employment, the number of youths engaged as self-employed declined from 81 million to 63 million between 2005 and 2012 and further to 49 million between 2012 and 2018.
- This is despite 95% of MUDRA loans being in the smallest Shishu category. The Ministry of Labour’s MUDRA study in 2018 had already demonstrated this fact.
- Actual government jobs: Only about 7% of the total employment is created in the government, including the public sector undertakings (NSS, 2017-18).
- Of the total 465 million jobs in India, about 260 million are created in non-farm (in the industry and services) sectors, of which only 34 million are created in the government sector.
- The Central government tried to create a myth that the self-employed can create enough jobs.
What are the steps to be taken?
- Private sector employment through appropriate government policy is crucial.
- Measures are needed to fill the vacant government posts. There has been a massive decline of government sector job growth from 1.3 million per annum from 2005 to 2012 to only 0.4 million per annum from 2012 to 2018.
- The National Education Policy 2020 is likely to increase the supply of vocationally trained youth due to the expansion of vocational training curricula at the school level, it will have no impact on the labour demand conditions of the industries.
- Supplementary measures including development of infrastructure and local industrialisation are necessary.
- The focus will have to be on two kinds of jobs. First, the health and education sectors and the police and the judiciary have too few government staff. These are sectors where the new government can expand government jobs.
- In all governments, State and Central, the share of Groups C and D jobs is an overwhelming 89%, leaving 11% of jobs for Groups A and B. With such few managerial or professional staff, it is impossible to run any government. Post-pandemic, most States will need to increase spending on public health.
Reservation for locals in private jobs | 9th Nov. 2020
News: Haryana government has passed the bill for 75 percent reservation in private sector jobs for locals having Haryana domicile.
About Haryana State Employment of Local Candidates Bill, 2020
- Bill provides for a 75 per cent job quota for local people in private sector jobs which offer a salary of less than Rs. 50,000 a month.
- It applies to private companies, societies, trusts, and partnership firms, among others, located in the state.
- It will be applicable to the new job openings only and won’t affect the outsiders already working on the affected jobs.
- An exemption can be claimed by employers in the situation where an adequate number of local candidates with the desired skills, qualifications, and proficiency are not available.
- Penalty for non-compliance ranges from Rs. 10,000 to Rs. 50,000.
- Domicile certificate would be mandatory for the candidate seeking benefit under the law.
However, since the bill is against Article 14 and 19 of the Indian Constitution, it will require presidential assent.
|Blue Collar jobs: The term ‘blue-collar job’ is used for the people involving a working-class person who performs manual labor that may involve skilled or unskilled labor.|
White-Collar jobs: The term ‘white-collar job’ is used for tasks involving an office environment and may involve sitting at a computer or desk.
Pink Collar Jobs: It involved service workers whose labor is related to customer interaction, entertainment, sales, or other service-oriented work.
Other states with reservation for locals in private jobs
- MP government in 2018 made it mandatory to give 70% of jobs to locals. But this law was not implemented on the private companies as a whole. It provided for the reservation in companies availing financial and other facilities from the government.
- Andhra Pradesh became the first state to pass such a law in 2019. It reserved 75% private jobs across all categories in industrial units, factories, joint Ventures as well as Public-Private Projects.
- Karnataka government also approved a new industrial policy (2020-2025) in 2020. This policy to ensure jobs for locals with a minimum employment of 70 percent to Kannadigas on an overall basis and 100 percent in the case of Group D employees.
How states are providing reservation to locals?
States Reserving Jobs for Locals: Some states have been using the loopholes in the laws to reserve government jobs for locals:
- Public Employment (Requirement as to Residence) Act: Exercising the powers under Article 16(3), Parliament enacted the act aimed at abolishing all existing residence requirements in the states and enacting exceptions only in the case of the special instances of Andhra Pradesh, Manipur, Tripura, and Himachal Pradesh.
- Language: States have gone around the mandate of Article 16(2) by using language. States that conduct official business in their regional languages prescribe knowledge of the language as a criterion.
- This ensures that local citizens are preferred for jobs. For example, states including Maharashtra, West Bengal and Tamil Nadu require a language test.
- Special protections under Article 371: Some states have special protections under Article 371. Andhra Pradesh under Section 371(d) has powers to have “direct recruitment of local cadre” in specified areas.
- Regarding the violation of fundamental rights, the Haryana government states that while Article 16 talks about “public employment”, the Bill only pertains to “private sector employment”.
Implications of reservation in private jobs
Although recently many state governments have passed such laws, many states have tried implementing the quotas previously as well. But laws remained on papers only.
- In 1995, Gujarat introduced an 85% reservation for locals but could not enforce it.
- In 2008, Maharashtra introduced an 80% reservation for locals in industries that seek state incentives and tax subsidies.
However, all these steps proved to be unsuccessful due to various reasons:
Companies: Industry bodies such as Assocham have questioned the effectiveness of such steps due to the absence of talent pool required for skilled jobs.
- Moreover, companies look at their profits more than the welfare of locals, there is a likelihood that if such steps result in a reduction of profit of a company, it might consider moving out of that state.
- Ultimately, this step would discourage capital investment in the implementing state.
Threat to unity: This step would create friction among locals and non-locals in the implementing states and against the residents of that state in the other states.
Against constitutional provisions: As mentioned above, these laws are against the spirit of constitutional provisions (Article 16 and 19) that provide fundamental rights to Indian citizens to work anywhere in the country.
Constitution and judgments concerning reservation for locals
What does the Constitution say? Article 16 in the Constitution of India refers to equality of opportunity in government jobs.
- Article 16(1): It provides for equality of opportunity for all citizens in matters relating to ’employment or appointment’ to any office under the State.
- Article 16(2): It provides that there cannot be any discrimination on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them.
- Article 16(3): It provides an exception by saying that Parliament may make a law “prescribing” a requirement of residence for jobs in a particular state. This power vests solely in the Parliament, not state legislatures.
- Article 19(g): Article provides the freedom to practise any profession, or to carry on any occupation, trade, or business.
Supreme Court Judgements:
- Dr. Pradeep Jain v Union of India (1984): The Supreme Court discussed the issue of legislation for “sons of the soil”. It expressed an opinion that such policies would be unconstitutional but did not expressly rule on it as the case was on different aspects of the right to equality.
- Sunanda Reddy v State of Andhra Pradesh (1995): The Supreme Court affirmed the observation in Pradeep Jain to strike down a state government policy that gave 5% extra weightage to candidates who had studied with Telugu as the medium of instruction.
- In 2002, the Supreme Court invalidated appointment of government teachers in Rajasthan in which the state selection board gave preference to “applicants belonging to the district or the rural areas of the district concerned”
- In 2019, the Allahabad High Court struck down a recruitment notification issued by the Uttar Pradesh Subordinate Service Selection Commission which prescribed preference for women who were original residents of the state.
Encouraging employment and thinking of the betterment of the state is the job of state government in power, but it should not be at the cost of the economic development of the state. A country like the US has become a superpower by allowing migrants and talents from other countries to work with equal opportunity, the same rule applies to the states of any country. A state, attracting and encouraging talent from other state, is on the better position to become developed and promote welfare of its people, compared to the one making the process difficult.
Haryana government must look at the implications of such law on the thriving economy of the state and contribution of the outsiders in it and try to bring an alternative in the form of incentives to companies on skill development of locals.
Low labour force participation (LlFP) of Indian women
Context: The issue of the low labour force participation (LFP) of Indian women.
What are the factors limiting women’s labour force participation?
- Women’s inability to work outside the home is hampered mainly due to the predominant responsibility for domestic chores and unpaid care work.
Scenario of Indian women’s labour force participation
- Historical evidence: Historically, women’s LFP has increased when the time cost of domestic/unpaid care work is reduced, or is shared more equally with men, or made more compatible with market work.
- Unequal gender divisions: India has among the most unequal gender divisions.
- Women spend between five to 10 times more time on housework compared to men.
- Female LFPR: Despite falling fertility and rapidly rising female education levels, India’s female LFP has not only been persistently low, but has registered a decline over the last 15 years.
- Multifarous reasons:
- Women unwillingness to work despite opportunities
- A lack of suitable jobs,
- Fractured nature of work especially in rural areas, and
- Inaccurate measurement of their work is still debatable.
- LinkedIn report: According to a recent report from LinkedIn, Indian women participation in paid work increased because of “work from home” (WFH) that allowed them to combine their domestic and employment responsibilities.
- Meaningful work should be provided to women that will be equal to their rising educational qualifications.
- Need to ensure conducive and enabling conditions (transportation, toilets, regularity) etc to facilitate women’s participation in work force.
- Need to reduce the burden of domestic chores and care work, along with increase in paid work opportunities to raise women’s participation in the labour force
India to realise its true potential of gender dividend, it is essential for paying attention to job creation with a gender equity lens.
Gig Economy and platform workers under labor laws in India | November 2nd, 2020
What is the Gig Economy and platform work economy?
- It is characterized by short-term contracts or freelance work as opposed to permanent jobs. It often involves connecting with customers through an online platform. Example: Delivery boys of app-based food, consultants, bloggers.
- The platform work economy is sometimes referred to as the gig worker economy, but Gig economy is a broader term that includes platforms
- In India, there are about 3 million gig workers that include temporary workers including independent contractors, online platform workers, contract firm workers, and on-call workers.
Provisions for gig and platform workers in labour laws of India
Code on Wages, 2019 expands the definition of an employee by using ‘wages’ as the primary definition to define who an ‘employee’ is. But it doesn’t explicitly mention or cover the gig workers, platform workers under this definition.
Important features of Labour Code on Social Security & Welfare, 2017
- Platform workers: For the 1st time Code on Social Security bill attempted to define platform workers in the following words;
“Platform work means a work arrangement outside of a traditional employer-employee relationship in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services or any such other activities which may be notified by the Central Government, in exchange for payment.”
- Universalizes social security: Social security has been extended to those working in the unorganized sector, such as migrant workers, gig workers, and platform workers.
- National Social Security Board: It proposes a National Social Security Board which shall recommend to the central government for formulating suitable schemes for different sections of unorganized workers, gig workers, and platform workers.
- Gig Workers: The bill states that the central or state government may notify specific schemes for gig workers, platform workers, and unorganised workers to provide various benefits, such as life and disability cover.
- Social Security Fund: Government will establish a social security fund that will be funded by central or state governments, gig worker and aggregator contributions, the corporate social responsibility fund, or other sources.
- Contribution of Gig/platform companies has been capped at 1-2% of their annual turnover but contribution should not be more than 5% of the amount payable to gig workers.
Need for providing benefits to the gig workers
Unemployment and low consumption:
- Periodic Labour Force Survey released in 2019 from the Ministry of Statistics and Programme Implementation shows the unemployment rate at a 45-year high, at 6.1%; the highest levels of joblessness is among urban youth.
- It also reported that domestic consumption has reduced, industrial growth has flatlined, private investments are lower, and market volatility has hit drivers of employment. Thus, many undergraduates and diploma holders are looking towards the gig economy as a solution to get employment.
High employment provider
- As per Human resources firm TeamLease estimates, in the 2nd half of 2018-19, 13 lakh Indians joined the gig economy.
- Despite becoming the biggest job provider, Most of these workers don’t see the gig economy as a full-time option due to job insecurity, amplified by complex contracts, the changing rates of incentives, and the lack of control over impossible targets.
- Gig economies work outside the traditional employment structures excluding them from minimum-wage protection and social security.
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Important role played by gig workers during a pandemic
- Platform workers were responsible for the delivery of essential services during the pandemic at great personal risk to themselves. They have also been responsible for keeping platform companies afloat despite the pandemic-induced financial crisis.
- This has cemented their role as public infrastructures that also sustain demand-driven aggregators. The dependence of companies on platform workers merits a jointly assumed responsibility by public and private institutions to deliver welfare measures.
- Despite all this, gig workers faced a continuous dip in pay and no rewards for being essential workers. The base pay of Swiggy workers was reduced from Rs. 35 to Rs. 10 per delivery order. All India Gig Workers Union formed to protest against this discrimination.
Financial dependencies of workers on the gig economy
Workers require existing assets like vehicular assets for entry into the platform economy, thus they have to rely on intensive loan schemes provided by workers rely on intensive loan schemes. It creates a dependency of workers on Platform Company.
It removes the flexibility benefit provided by the economy to its workers and make him liable to work under their terms and conditions.
Issues in Labour laws coverage for gig workers
- Even though platforms are part of the idea of how work will evolve in the future, the current laws do not see them as future industrial workers.
- Due to the absence of clear provisions in the labour codes, Platform delivery people can claim benefits, but not labour rights. The terms ‘gig worker’, ‘platform worker’ and ‘gig economy’ only appears in the Code on Social Security but not in other labour codes.
- This makes them the beneficiary of the programs released by the state, but not of labor rights.
- It doesn’t provide them a right to move the court to demand better and stable pay or regulate the algorithms that assign the tasks.
- This also means that the government or courts cannot pull up platform companies for their choice of pay, or how long they ask people to work.
- Though gig workers are covered under social security schemes none of these benefits are secure, which means, the Central government, from time to time, can formulate welfare schemes that cover these aspects of personal and work security, but they are not guaranteed. All these benefits will be dependent upon the will of the state government.
- For Ex; in some states like Karnataka, where a platform-focused social security scheme was in the making last year, will possibly offer some financial assistance by the Centre.
- The Social Security Code states the provision of basic welfare measures is a joint responsibility of the Central government, platform aggregators, and workers. But doesn’t mention which measures will be provided by which stakeholder.
What should be done?
- Amendments to labor laws in Ontario and California have shown a move towards granting employee status to platform workers, thus guaranteeing minimum wage and welfare benefits.
- This is the view propagated by international agencies in the EU, including the European Trade Union.
- The government in India should also consider granting the gig workers the status of employees of the aggregators. That would automatically provide them all the labor benefits like PF and ESI.
- The government should consider providing a loan scheme to the platform workers, to end their dependency on the platform aggregator companies.
- To mitigate operational breakdowns in providing welfare services, a tripartite effort by the State, companies, and workers to identify where workers fall on the spectrum of flexibility and dependence on platform companies is critical.
Platform workers and their issues
Context- The new labour codes passed by Parliament recently acknowledge platform and gig workers as new occupational categories in the making.
What are the provisions for platform worker in the labour code and issues with them?
Definition of Platform work according to new law–
- “Platform work” has been defined as a work arrangement outside of a traditional employer employee relationship in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services or any such other activities which may be notified by the Central Government, in exchange for payment.
- Platform worker has been defined as a person engaged in or undertaking Platform Work.
What are the issues with new labour code ?
1)There are no guarantees for better and more stable days for platform workers, even though they are meant to be ‘the future of work’.
2)The Code has drawn criticism from platform workers’ associations for failing to delineate it from gig work and unorganized work.
3)The code does not state which stakeholder is responsible for delivering what quantum of welfare.
4)The terms ‘gig worker’, ‘platform worker’ and ‘gig economy’ not defined with in connection with their wages.
Discuss the role of platform worker amidst the pandemic.
- platform workers were responsible for delivery of essential services during the pandemic at great personal risk to themselves.
- They have also been responsible for keeping platform companies afloat despite the pandemic-induced financial crisis.
- A tripartite effort by the State, companies, and workers to identify where workers fall on the spectrum of flexibility and dependence on platform companies is critical.
- The Way forward for platform workers is through a socio-legal acknowledgement of the heterogeneity of work in the gig economy, and the ascription of joint accountability to the State and platform companies for the delivery of social services.
India’s jobs conundrum
Syllabus: GS3: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.
Context: A country progresses when small and mid-sized firms grow, and create jobs alongside. India over the years is facing the problem of inadequate mid-sized firms.
How are job creation and firms’ size related?
- Contribution of Large firms: McKinsey Global Institute (MGI) in a recent report titled India’s turning point, an economic agenda to spur growth and jobs points out that India has around 600 large firms which earn a revenue of more than $500 million per year.
- Higher productivity:The labour productivity of large firms is 11 times higher than that of the overall economy.
- Growth in export and employment generation:These firms are also responsible for 40% of exports and employ 20% of the people in the direct formal workforce.
Why does India have fewer large firms?
- India’s missing middle of mid-sized firms: It’s the mid-sized firms which grow into large firms, and create jobs and competition along the way.
- Slow corporate growth:slow corporate growth led to slow economic growth and a situation where only 77 mid-sized firms became large between 2012 and 2018.
- Chain reaction: since 2017, India’s GDP is free falling and in 2018, the revenues of large Indian firms amounted to 48% of nominal GDP compare to 58% in 2012.
- Comparison with Other countries:
- The contribution made by large firms in other emerging economies like China, Malaysia and Thailand was 1.5 to 1.6 times that of India.
- India has fewer large firmsrelative to gross domestic product (GDP) than China, Malaysia, South Korea and Thailand.
- As per MGI, India’s 1,500 mid-sized firms per $1 trillion of GDP, with revenue between $40 million and $500 million, are only about half the number in peer emerging economies relative to their GDP.
What are the possible reasons for mid-sized firms?
- India’s high cost of compliance.
- The small and mid-sized firms lack the organizational resourcesto manage costly procedures.
- Due to cumbersome procedure, it takes 1,445 days to enforce a contract in India. However, in South Korea it takes 290 days.
- Lack of access to low-cost capital stops firms from growing bigger.
What steps should be taken to tackle this?
- Lack of capital problem can be tackled by deepening India’s capital markets.
- India needs to triple the size of its large firms by 2030.
- Unlocking land supply and allow prices to fall by 20% to 25%.
- Creation of flexible labour markets, privatizing the 30 largest PSU firms.
- Efficient power distribution.
- Improving ease of doing business and sector specific policies to improve productivity.
Reducing the vulnerabilities of urban employment
Source- The Hindu
Syllabus- GS 3- Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
Context- The contraction of the economy raises concern on the employment situation as the shrinking sectors are those that create the maximum new jobs in India.
What are impacts of COVID-19 on the economy?
- GDP contraction– India’s economy shrank nearly 25 percent in last quarter, the most drastic fall in decades.
- Public administration– higher government spending was in the form of transfer payments rather than spending on goods and services, which resulted in a negative growth number.
- Manufacturing and Services– The sector has been in the negative zone (–39%) across the board due to the national lockdown since end of March.
- Industries which have been hit harder—
- Travel or Entertainment (–47%)– will still be in a gradual normalization process, and probably won’t rebound completely until a vaccine is available.
- Real estate (–50%)– The present stress on home loans can hinder a revival in residential real estate.
What is the impact of lockdown on low-end informal jobs in India?
The pandemic and associated policy responses have exposed the severe vulnerabilities of urban low-end informal jobs; the share of vulnerable employment is higher in India as compare to the world.
Vulnerable employment- It characterized by inadequate earnings, low productivity and difficult conditions of work that undermine the basic rights of workers.
- GDP contraction and lack of demand in the economy, which results a significant dip in urban employment generation.
- In India, capital and labour are moving from low value-added activities in a sector to another sector, but not to higher value-added activities. This leads to a situation where a large proportion of the jobs being created is of poor quality (and is expected to remain so).
What are the possible solutions in securing the livelihoods of workers in urban areas?
- Generate more jobs-
- The focus on urban employment generation programmes should be in coordination with local governments.
- A major local initiative would be to design and implement employment-intensive investment policies.
- Private investments need to be facilitated by conducive contractual relations between labour and capital.
- Small and micro enterprises, the fulcrum of industrialization, need extra support to balance the interests between labour and capital as neither have collective bargaining powers.
- Needs to launch of an urban employment scheme oriented toward building large-scale medical, health and sanitation infrastructure in cities and towns across India.
- To reduce vulnerabilities by proving decent wage and some form of job security-
- It is important that MGNREGA be expanded by both increasing the budgetary allocations and the guaranteed minimum number of days of work.
- Prioritize urban infrastructure-
- Infrastructure investments would spur employment, generate earnings and contribute to small enterprise formation.
- Construction of low-cost housing is another activity that can be carried out using labour-intensive methods, while yielding substantial collateral benefits for urban dwellers’.
Given the structure of the economy and demographic profile, Government needs to focus on reducing the vulnerabilities of urban informal jobs in the long run.