Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

India Employment Landscape: Insights from the ILO-IHD Report 2024

Note4Students

From UPSC perspective, the following things are important :

Prelims level: ILO, India Employment Report 2024

Mains level: NA

Why in the news?

According to the India Employment Report 2024 released by the International Labour Organisation (ILO) and the Institute of Human Development (IHD), India’s youth account for almost 83% of the unemployed workforce.

About the International Labour Organization (ILO)

 

  • The ILO is a UN agency whose mandate is to advance social and economic justice through setting international labour standards.
  • Founded in 1919 under the League of Nations (under Treaty of Versailles) it is the first and oldest specialised agency of the UN.
  • India was one of the founding members of the ILO, joining the organization in 1919.
  • The ILO has 187 member states: 186 out of 193 UN member states plus the Cook Islands.
  • Its international labour standards are broadly aimed at ensuring accessible, productive, and sustainable work worldwide in conditions of freedom, equity, security and dignity.
  • The Governing body is the apex executive body of the ILO which decides policies, programmes, agenda, budget and elects the Director-General.
  • It meets 3 times a year, in March, June and November.
  • ILO has received the Nobel Peace Prize in 1969.

 

Major Conventions of the ILO:

  • Forced Labour Convention (No. 29)
  • Abolition of Forced Labour Convention (No.105)
  • Equal Remuneration Convention (No.100)
  • Discrimination (Employment Occupation) Convention (No.111)
  • Minimum Age Convention (No.138)
  • Worst forms of Child Labour Convention (No.182)
  • Freedom of Association and Protection of Right to Organised Convention (No.87)
  • Right to Organise and Collective Bargaining Convention (No.98)

 

Highlights of the India Employment Report 2024:

  1. Labour Market Dynamics
  • Long-Term Deterioration: The Labour Force Participation Rate (LFPR), Worker Population Ratio (WPR), and the Unemployment Rate (UR) showed a long-term deterioration between 2000 and 2018, but witnessed an improvement after 2019.
  • Education Impact: The share of youngsters with secondary or higher education in the total unemployed youth has almost doubled from 35.2% in 2000 to 65.7% in 2022, indicating a significant shift in educational qualifications among job seekers.
  1. Challenges and Insecurities
  • Informal Workforce: Almost 90% of workers remain engaged in informal work, while the share of regular work declined after 2018, leading to widespread livelihood insecurities.
  • Contractualisation: There has been a rise in contractualisation, with only a small percentage of regular workers covered by long-term contracts, exacerbating job insecurities.
  1. Skills Gap and Gender Disparities
  • Skills Deficiency: Despite being a demographic dividend, the report notes a skills gap among India’s young workforce, with a significant percentage unable to perform basic digital tasks or mathematical operations.
  • Gender Gap: India faces substantial gender disparities in the labour market, with low rates of female labour force participation and high levels of unemployment among highly educated young women.

 


PYQ:

2018: International Labour Organization’s Conventions 138 and 182 are related to:

  1. Child labour
  2. Adaptation of agricultural practices to global climate change
  3. Regulation of food prices and food security
  4. Gender parity in the workplace

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

No major change in employment status or wages in 10 years

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Employment/Wages Issues in India

Why in the news? 

Recently, a report by Bahutva Karnataka shows that the share of self-employed workers increased, while the share of those in formal employment remained low

What does the Report say?

  • The stagnation in economic growth in India is evident in the share of households earning less than the proposed National Floor Level Minimum Wage (NFLMW) of ₹375 a day, with approximately 34% falling below this threshold.
    • Additionally, wage inequality has exacerbated the gap between the rich and the poor.
  • In 2022, the top 1% and 10% of the population held 22% and 57% of the national income, respectively, while the bottom 50% held a significantly lower share at 12.7%, as per data from the World Inequality Database.

Key Highlights:

 

The Report compares the share of Employment across various employment categories in 2011-12 and 2022-23 for men and women- 

  • Low Formal Employment: The share of formal sector employment remained below 25%. Majority of employment (above 50%) was in the self-employed category.
  • Increase in Self-Employment: Self-employment remained predominant, with over 50% of the workforce engaged in this sector. Self-employment saw a notable increase in the share of women, rising by 8% points from 56.5% in 2011-12 to 64.3% in 2022-23.
  • Rise in Women’s Self-Employment: Women constituted the highest share of self-employed individuals. The share of self-employed women saw significant growth, indicating a rising trend of women engaging in entrepreneurial activities.
  • Unpaid Labor: The report highlights an increase in the number of women engaged in unpaid labor within family businesses or farming. This rise reflects the lack of other remunerative employment opportunities and stagnant household earnings.
  • Gender Disparities Persist: Despite increased participation in self-employment, gender disparities persist, with women often engaging in unpaid labor or informal work due to limited opportunities in the formal sector.
  • Economic Stagnation Impact: economic stagnation has led to limited growth in formal sector employment, pushing more individuals, especially women, towards self-employment and unpaid labor as alternative sources of livelihood.

The major observation in India: Many households still earn less than the NFLMW:

  • Stagnant Income Growth: There has been no significant growth in income over the past five years across different employment categories.
  • Low Earnings Below NFLMW: Many households still earn less than the proposed National Floor Level Minimum Wage (NFLMW). In 2019, an expert committee recommended the NFLMW to be at least ₹375 per day and ₹3,050 per week.
  • Regional Disparities: Analysis of 34 States and Union Territories (UTs) revealed that in about 19 of them, more than 20% of households earned less than ₹375 a day or ₹3,050 a week in 2022-23.
    • In states like Chhattisgarh and Uttar Pradesh, over 50% of households earned less than the recommended minimum wage.
  • Large Number of Low-Income Workers: The report highlights that nearly 30 crore workers earn less than the minimum wage, indicating a significant portion of the workforce struggling with low earnings.

The year-wise wealth share of the top 10% and the bottom 50% of the population-

  • Stagnant Income Growth vs. GDP Per Capita: Despite an increase in GDP per capita over the last decade, income growth among the majority of the population has remained stagnant.
  • GDP Per Capita Increase: Over the past 10 years, GDP per capita in India has risen by 60%, indicating overall economic growth and prosperity.
  • Low Earnings Below NFLMW: Despite GDP growth, close to 35% of total households still earn less than the proposed National Floor Level Minimum Wage (NFLMW).
  • Increase in Wealth Disparity: The share of national wealth held by the wealthiest 10% of the population has increased from 63% in 2012 to 64.5% in 2022. Conversely, the share of wealth held by the poorest 50% of the population has decreased from 6.1% in 2012 to 5.6% in 2022.

What are the measures to resolve these issues?

  • Promote Formal Employment: Encourage policies and initiatives to boost formal sector employment, providing stable income and social security benefits. Offer incentives to businesses to create more formal job opportunities.
    • Focus on promoting vocational training and entrepreneurship among women to enhance their participation in formal sectors.
  • Ensure Equal Pay and Opportunities: Enforce laws to ensure equal pay for equal work, regardless of gender. Implement policies to eliminate gender discrimination in hiring practices and promotion opportunities.
  • Improve Minimum Wage Standards: Review and revise minimum wage standards regularly to ensure they are in line with the cost of living and provide a decent standard of living.
  • Invest in Rural Development: Promote rural development initiatives to create alternative sources of livelihood and reduce dependency on agriculture, especially for women engaged in unpaid labor.
  • Address Regional Disparities: Implement targeted interventions to address rural-urban disparities in income and employment opportunities. Focus on infrastructure development, skill enhancement, and investment promotion in economically backward regions.
  • Enhance Social Safety Nets: Strengthen social safety net programs such as Universal Basic Income (UBI), healthcare, and education to provide a buffer against income volatility and support vulnerable households.

Conclusion:

Stagnant income growth and rising self-employment underscore economic challenges, with many households earning below the proposed minimum wage. Resolving issues requires promoting formal employment, equal pay, rural development, and progressive taxation.

PYQ Mains-

Q- Can the vicious cycle of gender inequality, poverty and malnutrition be broken through microfinancing of women SHGs? Explain with examples.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

What are Labour Rules for Workers abroad?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Migration for Employment Convention

Mains level: Read the attached story

Introduction

  • The governments of Uttar Pradesh and Haryana, in collaboration with the National Skill Development Corporation (NSDC), have initiated the recruitment of around 10,000 workers for employment in Israel, primarily for construction roles.
  • These workers are being recruited to address employment challenges and offer an opportunity for overseas employment.

Labour Laws: International Practices

  • ILO Conventions: International labor standards are governed by conventions of the International Labour Organisation (ILO).
  • India’s Non-Ratification: India has not ratified these conventions, while Israel ratified the Migration for Employment Convention (Revised), 1949, in 1953.
  • Action against Misleading Propaganda: The 1949 convention calls for action against misleading propaganda related to emigration and immigration.

Emigration Rules

  • Registration Requirement: Workers going to conflict zones or regions lacking sufficient labor protections are required to register on the Ministry of External Affairs’ ‘e-migrate’ portal.
  • Exclusion of Israel: However, Israel is not on the list of countries covered by this requirement, despite ongoing violence in certain areas.

Opposition and Legal Concerns

  • Conflict Zone Concerns: Central trade unions argue that sending workers to a region of conflict goes against the principles of bringing back citizens from such zones.
  • Political Motivation: They assert that the government’s move is politically motivated and aimed at pleasing Israel.
  • Service Charges: Trade unions highlight that the Emigration Act prohibits the collection of service charges exceeding ₹30,000 from workers.
  • High Recruitment Costs: In the case of recruitment for Israel, workers are required to pay a significant fee to the NSDC, as well as cover other expenses, adding up to nearly ₹1 lakh.
  • Violating Emigration Act: This paid recruitment in a conflict zone facilitated by governments is seen as a violation of the Emigration Act, 1983.

Way Forward

  • ILO’s Outlook: The ILO’s World Employment and Social Outlook: Trends 2024 report highlights rising global unemployment rates in 2024.
  • Migration Policy: Countries are urged to design sensible migration policies and skill development initiatives to support and develop local labor markets.
  • Education and Training: Strengthened education and training systems are also recommended in countries with growing labor resources.

Conclusion

  • The recruitment of workers for employment in Israel has sparked legal concerns and opposition from trade unions.
  • These concerns center on the Emigration Rules, paid recruitment in a conflict zone, and the need for strengthened labor protections.
  • International labor standards and the demographic transition of countries with excess labor resources are important considerations in the context of overseas employment.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Maharashtra approves option for Old Pension Scheme

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Old Pension Scheme , NPS

Mains level: Read the attached story

pension

Introduction

  • The Maharashtra Cabinet has approved a proposal allowing certain state government employees to opt for the old pension scheme (OPS).
  • The option is extended to employees who joined the service after November 1, 2005, based on recruitment advertisements issued before that date.

Transition in Pension Schemes

  • Old Pension Scheme (OPS): The OPS guaranteed a pension of half the last basic salary plus dearness allowance after a minimum of 10 years of service, without employee contributions. It also provided family pension and Death cum Retirement Gratuity (DCRG).
  • New Pension Scheme (NPS): Introduced to address the growing pension bill, the NPS is a market-linked, participatory scheme requiring contributions from both employees and employers.

Background and Implementation of NPS

  • OASIS Project: Initiated in 1999, it led to the recommendation of the NPS by the Atal Bihari Vajpayee government in 2003.
  • Scheme Details: Employees contribute 10% of their basic salary, matched up to 14% by the employer. The funds are invested in PFRDA-regulated pension funds with market-linked returns.
  • Account Management: NPS provides a Permanent Retirement Account Number (PRAN) for lifelong account management.
  • State Adoption: All states except West Bengal have implemented the NPS. Some opposition-ruled states announced plans to revert to the OPS.

Rationale Behind NPS Adoption

  • Pension Debt Sustainability: The OPS was a fiscal burden without accumulated funds, whereas the NPS relies on accumulated funds.
  • Addressing Ageing Population: With increasing life expectancy, the OPS became unsustainable.
  • Preventing Early Retirements: The NPS encourages longer service due to its long-term investment fund ideology.
  • Investment and Flexibility: NPS offers flexible investment options and the freedom to switch investment options and fund managers.

Criticism of NPS

  • Market Risks: The exposure of retirement funds to market uncertainties raises concerns about old age security.
  • Pension Amount Concerns: There is no minimum pension guarantee, and pensions under NPS do not adjust for inflation.
  • Accountability Issues: Questions remain about the security of the invested corpus and accountability in market failures.

Conclusion

  • State Governments’ Challenge: Reverting to OPS requires careful consideration of financial implications on future generations.
  • Review and Strengthening of NPS: Measures such as introducing inflation-indexed annuities, assuring minimum returns, and ensuring timely registration and contributions can strengthen the NPS.
  • Balanced Approach: A nuanced approach is needed to balance fiscal sustainability with providing adequate social security to retirees.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

The woes of pensioners and PF members

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Employees’ Provident Fund Organisation

Mains level: revisiting the pension computation methodology

EPFO Pension: EPFO issues FAQs on pension, but no clarity on computation |  India News - Times of India

Central idea 

The EPFO’s recent clarification on the 2022 Supreme Court verdict regarding higher PF pension has sparked concerns among pensioners due to ambiguity in pension computation methods. Challenges include discrepancies for pre-2014 and post-2014 retirees, with a demand for increased minimum monthly pension.

Key Highlights:

  • The EPFO’s clarification on the 2022 Supreme Court verdict on higher PF pension has raised concerns among pensioners and PF members.
  • The Court approved higher pension payments with certain conditions, including amendments to the pensionable salary cap and contribution rules.
  • The clarification introduces ambiguity by tying pension computation to the “date of commencement of pension.”

Key Challenges:

  • Pre-2014 retirees choosing pension post-amendments receive lower pensions due to the calculation based on the average pay of 60 months.
  • Post-2014 retirees face ambiguity and discrepancies in the revised pension amounts, seeking clarity through a worksheet.
  • Lack of incorporation of interest rate component in pension calculations.
  • Long-standing demand to increase the minimum monthly pension beyond ₹1,000, with calls for linking it to the cost of living index.

Key Terms:

  • EPFO: Employees’ Provident Fund Organisation
  • EPS: Employees’ Pension Scheme
  • Pensionable salary cap: ₹15,000/month
  • Amendments (2014): Raised pensionable salary cap, altered contribution rules, and changed computation basis.
  • Date of commencement of pension: Controversial factor in pension calculation.

Key Quotes:

  • “There is also a demand for incorporating the component of interest rate… the pension amount would at least see a rise of ₹2,300 per month.” – MP M. Shanmugam
  • “The government’s contributions should increase… to achieve a durable social security system for contributors to the economy.”

Key Statements:

  • The clarification’s reliance on the “date of commencement of pension” has created confusion and dissatisfaction among pensioners.
  • Ambiguity in post-2014 retirees’ pension calculations prompts the need for a clearer worksheet.

Way Forward:

  • Address concerns by revisiting the pension computation methodology.
  • Consider increasing the minimum monthly pension, as demanded by various stakeholders.
  • Enhance government contributions to ensure a robust social security system.
  • Provide clear guidelines and a comprehensive worksheet for post-2014 retirees to understand and verify their pension calculations.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Youth Unemployment in India: A Persistent Challenge

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Unemployment in India

Central Idea

  • In 1932, M Visvesvaraya highlighted the issue of unemployment among educated individuals in India.
  • Ninety years later, the issue of youth unemployment remains a significant concern, despite official data indicating a decrease in the overall unemployment rate.

Unemployment Trends: Data Analysis

  • Official Statistics: According to the Periodic Labour Force Survey (PLFS), the unemployment rate decreased from 6.1% in 2017-18 to 3.2% in 2022-23.
  • Disparities in Experience: Despite the overall reduction, young, highly educated workers face the highest unemployment rates, indicating a structural problem in the Indian economy.

Educational Attainment and Unemployment

  • Higher Education and Unemployment: Individuals with higher education have consistently faced higher unemployment rates since the 1990s.
  • Trends Over Time: Unemployment rates for graduates have fluctuated, reaching 17% in 2017-18 and then dropping to 13% in 2022-23.

Youth Unemployment

  • Young Graduates: The unemployment rate for young workers (aged 18 to 29) with graduate degrees has been notably high, with significant long-term unemployment spells.
  • Increasing Share of Graduates: The proportion of graduates in the labor force has risen from 5% in 1993-94 to around 15% in 2022-23, impacting overall unemployment rates.

Challenges and Implications

  • Growing Concern: The increasing share of educated workers in the labor force, coupled with high unemployment rates among them, points to a deepening problem.
  • Need for Analysis: Understanding the causes of unemployment among the highly educated is crucial, whether it’s the education system’s failure to impart relevant skills or the economy’s inability to create sufficient jobs.

Conclusion

  • Serious Issue: Youth unemployment in India is a critical issue that needs comprehensive analysis and action.
  • Harnessing Demographic Dividend: Effective measures are required to ensure that the aspirations of the youth are met and the potential of India’s demographic dividend is fully realized.
  • Policy Focus: Addressing youth unemployment requires targeted policies that focus on skill development, job creation, and aligning education with market needs.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Private: Henry Ford’s Revolutionary Wage Increase in 1914: A Historical Perspective

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Social Organization of Work (Sociology Optional)

ford

Introduction

  • On this day in 1914, Henry Ford, the American businessman and founder of Ford Motors, announced a significant wage increase for his workers, from $2.34 to $5 per day.
  • The decision was a major news event, eliciting varied reactions, from praise to skepticism and accusations of socialism.

Ford Motors and the Assembly Line Innovation

  • Company Establishment: Ford Motors, established in 1903, initially had a time-consuming car assembly process.
  • Henry Ford’s Vision: Ford sought to revolutionize this process.
  • Moving Assembly Line: In 1913, Ford introduced the moving assembly line, where each worker performed a specific task repeatedly, significantly reducing the car assembly time from 12 hours to 90 minutes.

Impact of Assembly Lines on Work

  • Change in Work Nature: The new method transformed workers’ roles, requiring less judgment but more efficiency to meet market demand.
  • High Attrition Rate: Despite a pool of job-seekers, Ford faced challenges in retaining employees due to the monotonous nature of the work.

Rationale behind Wage Increase

  • Worker Retention Strategy: The wage increase was part of a broader plan to retain workers, devised by John R Lee, Ford’s first personnel manager.
  • Publicity and Altruism: Another possible motivation for the wage hike was Ford’s desire for positive publicity and to showcase his altruism.

Conditions and Implementation

  • Eligibility Criteria: The wage increase excluded women, girls, and men under 22. It was also contingent on workers’ personal habits, monitored by Ford’s ‘Sociological Department’.
  • Announcement and Implementation: The new wage policy, announced on January 5, 1912, came into effect a week later, with a reduction in work hours from 9 to 8 hours.

Outcomes for Ford Motors

  • Cost Reduction: Despite the wage increase, Ford’s total costs declined between December 1913 and December 1914, with a notable decrease in material costs.
  • Increased Productivity and Profits: The wage hike led to reduced worker turnover and increased productivity, contributing to Ford Motors doubling its profits in less than two years.
  • Commercial Success: The decision complemented Ford’s production revolution, maximizing its commercial value and proving to be an effective cost-cutting strategy.

Conclusion

  • Historical Significance: Henry Ford’s decision to increase wages in 1914 marked a pivotal moment in industrial history, reshaping labor relations and setting a precedent in employee compensation.
  • Legacy: The move not only addressed worker retention issues but also enhanced productivity and profitability, cementing Ford’s reputation as an innovative and socially conscious industrialist.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Kerala’s Pension Dilemma: A Review of the Contributory Pension Scheme

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Contributory Pension Scheme

Mains level: Read the attached story

Central Idea

  • A report on Kerala’s contributory pension scheme (introduced in 2013) has been released after a recent Supreme Court verdict.
  • This scheme, introduced in 2013, has sparked a debate due to its financial impact on the state.
  • Let’s take a closer look at the National Pension System (NPS), Kerala’s pension scenario, and the findings of the review committee report.

NPS: A Quick Recap

  • What is NPS? The National Pension System (NPS) is a contributory pension scheme initiated by the Indian government in 2004, extending to various states, including Kerala.
  • How It Works: Under NPS, a fund is built from contributions made by employees and employers during their employment. Unlike the previous pension scheme funded by the government, NPS involves purchasing an annuity scheme at retirement, providing the pensioner with an annuity.

Kerala’s Pension Scenario

  • Pension Challenges: Kerala faces rising pension liabilities, mainly due to a high life expectancy post-retirement and an increasing number of employees enrolled in NPS.
  • Budget Impact: The state allocates a significant portion of its budget to committed expenditure, including salaries, pensions, and interest payments. Pension accounts for 21% of this expenditure.
  • Contributions: Employees who joined after April 2013 contribute 10% of their salary (including dearness allowance) to the NPS corpus.

The Review Committee Report

  • No Revocation Recommended: The review committee did not recommend scrapping the NPS, stating it was legally sound.
  • Alternative Recommendations: It suggested raising the state government’s contribution from 10% to 14% and including dearness allowance at 14%. The report also proposed allowing death-cum-retirement gratuity for NPS subscribers.

Why the Report Supports NPS?

  • Long-Term Perspective: The committee viewed pension matters from a long-term perspective, stating that continuing NPS would eventually reduce pension outgo as a share of the state’s GDP.
  • Reducing Revenue Deficit: As pension outgo decreases, the share of revenue deficit also falls, freeing up resources for capital spending and social services.

Arguments against NPS in Kerala

  • Low Annuities: Retirees under NPS have reported receiving meager annuities compared to the old pension scheme.
  • Market Risks: Concerns exist about the impact of stock market crashes on NPS investments, as contributions are invested in various assets.
  • Demand for Reintroduction: Some states have reintroduced statutory pension schemes due to employee demand.

Conclusion

  • The review report favors retaining NPS in Kerala, emphasizing its long-term financial benefits.
  • However, concerns about low annuities and market risks persist, prompting some states to consider returning to the old pension scheme.
  • The debate over Kerala’s contributory pension scheme continues amid financial and welfare considerations.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Narayana Murthy’s Proposition: Notion of Extended Working Hours

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Work Productivity

narayana murthy

70 hours Work: Narayana Murthy Suggests

  • Infosys founder N.R. Narayana Murthy’s recent call for young Indians to work 70 hours per week has ignited a debate on worker productivity in India.
  • He cited Japan and Germany as examples of nations that prospered due to longer working hours post-World War II.
  • However, his views raise questions about worker productivity, its relationship with economic growth, and India’s unique context.

Worker Productivity vs. Labour Productivity

  • Conceptual Difference: Worker productivity involves mental activities, while labour productivity is associated with manual tasks.
  • Measurement: Productivity is typically measured as the output value per unit of labor cost.
  • Complexity in Services: In intellectual labor, measuring output independently is challenging; hence, worker income often proxies productivity.
  • Fallacious Assumption: Murthy’s assertion that increased working hours lead to higher productivity is contentious, as it could exploit workers without commensurate pay.

Link between Worker Productivity and Economic Growth

  • Complex Relationship: While productivity improvements impact economic growth positively, the relationship is intricate.
  • Distribution of Income: India’s economic growth hasn’t necessarily benefited all income groups; wealth disparities persist.
  • Income Inequality: Income gains have disproportionately favored the top income strata, suggesting a disconnect between productivity and income distribution.
  • Factors Influencing Wealth: Factors like hereditary wealth transfers and arbitrary compensation for the super managerial class have contributed to income disparities.

Is India’s Worker Productivity One of the Lowest?

  • Proxy Fallacy: Using income as a proxy for productivity can yield misleading conclusions.
  • Indian Workforce: Indians are among the hardest working employees globally, but they receive comparatively lower wages.
  • Contradictory Statements: Narayana Murthy’s claim about low productivity seems unsubstantiated, possibly driven by motives to push labor reforms.

What data shows?

  • In 1980, India’s Gross Domestic Product was about $200 billion, which by 2015 exceeded $2,000 billion.
  • Income distribution data from 1980 to 2015 in India:
    1. Bottom 50% income groups experienced a 90% increase in income.
    2. Top 10% income group’s share increased from 30% to 58%.
    3. Top 0.01% experienced an increase of 1699%.
    4. Top 0.001% had an increase of 2040%.

Impact of Informal Labor on Worker Productivity

  • Rise in Informal Employment: Economic reforms have witnessed a surge in informal employment.
  • Limited Formalization: Formalization efforts have mostly focused on tax compliance and not labor standards or conditions.
  • Exploitation in MSMEs: Even within the formal manufacturing sector, Micro-Small-Medium Enterprises (MSMEs) engage in wage cutting to maximize profits.
  • Outsourcing Practices: Large corporations outsource production to smaller labour-intensive units, exacerbating labor exploitation.

Comparing India with Japan and Germany

  • Inadequate Comparisons: India’s unique context, including its labor force, technological trajectory, socio-cultural dynamics, and political structures, makes direct comparisons with Japan and Germany inapt.
  • Unique Development Path: India’s sustainable development requires enhancing social investments, tapping domestic consumption potential, and focusing on human-centric development.

Conclusion

  • The call for extended working hours to boost worker productivity raises complex issues regarding labor exploitation, income distribution, and India’s economic context.
  • Direct comparisons with Japan and Germany overlook India’s unique challenges and opportunities.
  • A comprehensive approach that addresses these intricacies is essential to ensure sustainable and equitable development in India.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Back in news: Article 142 of the Constitution

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Art 142

Mains level: Not Much

Central Idea

  • The Supreme Court has used its extraordinary constitutional power under Article 142 to do complete justice for a 50-year-old man who fought for nearly three decades against the postal department’s refusal to give him a job despite his name figuring high on the merit list.

What is Article 142?

Article 142 titled ‘Enforcement of decrees and orders of the Supreme Court and orders as to discovery, etc.’ has two clauses:

[1] Article 142(1)

  • The Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it.
  • Any decree so passed or order so made shall be enforceable throughout the territory of India.
  • It may be in such manner as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, in such manner as the President may by order prescribe.

[2] Article 142(2)

  • The Supreme Court shall have all and every power to make any order for the purpose of securing the attendance of any person, the discovery or production of any documents, or the investigation or punishment of any contempt of itself.

Important instances when Article 142 was invoked

  • Bhopal Gas tragedy case: The SC awarded a compensation of $470 million to the victims and held that “prohibitions or limitations or provisions contained in ordinary laws cannot, ipso facto, act as prohibitions or limitations on the constitutional powers under Article 142.”
  • Babri Masjid demolition case: The Supreme Court ordered framing of a scheme by the Centre for formation of trust to construct Ram Mandir at the Masjid demolition site in Ayodhya.
  • Liquor sale ban case: The Supreme Court banned liquor shops within a distance of 500 metres from National as well as State highways in order to prevent drunken driving.
  • Ex-PM Assassin case: In the case of Perarivalan, the Supreme Court invoked Article 142(1) under which it was empowered to pass any order necessary to do complete justice in any matter pending before it.

Try this PYQ from CSP 2019:

Q.With reference to the Constitution of India, prohibitions or limitations or provisions contained in ordinary laws cannot act as prohibitions or limitations on the constitutional powers under Article 142. It could mean which one of the following?

(a) The decisions taken by the Election Commission of India while discharging its duties cannot be challenged in any court of law.

(b) The Supreme Court of India is not constrained in the exercise of its powers by laws made by the Parliament.

(c) In the event of grave financial crisis in the country, the President of India can declare Financial Emergency without the counsel from the Cabinet.

(d) State Legislatures cannot make laws on certain matters without the concurrence of Union Legislature.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Labour force participation

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Key findings

Mains level: Recent labor force survey- positive and concerning trends

What’s the news?

  • The issue of employment has been a central topic in economic policy discussions, especially in recent decades, as the correlation between economic growth and job creation has appeared fragile.

Central idea

  • The COVID-19 pandemic intensified economic disruptions, causing financial distress, surging unemployment, and rural migration. The 2022-23 labor force survey shows rising participation rates and lower unemployment but raises concerns with declining regular employment and a rise in self-employment.

Increasing Labor Force Participation

  • The national labor force participation rate (15 years and above) has grown from 49.8% in 2017-18 to 57.9% in 2022-23.
  • Both rural and urban areas have witnessed increased participation, with a more significant rise in rural regions.
  • Female participation in rural areas increased from 24.6% in 2017-18 to 41.5% in 2022-23, indicating higher female engagement in the labor force.
  • However, this rise may also reflect economic distress in rural areas, pushing women to seek employment to augment family incomes, including work under MGNREGA.

Rise in Self-Employment

  • The percentage of self-employed individuals increased from 55.6% in 2020-21 to 57.3% in 2022-23.
  • Concurrently, the share of regular wage/salaried employment declined from 21.1% to 20.9%.
  • The proportion of workers engaged in informal sector enterprises in the non-agricultural sector also rose from 71.4% in 2020-21 to 74.3% in 2022-23.

Concerns Over Job Quality

  • While unemployment rates have fallen across the board, especially among the youth (age group 15-29), the decline in regular wage/salaried employment and the increase in self-employment raise concerns.
  • These trends indicate that the economy may struggle to create sufficient productive and well-paying job opportunities to absorb the annual influx of millions into the labor force.
  • Inadequate job creation remains the most significant challenge facing policymakers.

Conclusion

  • The recent labor force survey highlights both positive and concerning trends in India’s labor market. Addressing the challenge of job creation and ensuring that these jobs are productive and remunerative should remain a top priority for policymakers in India’s economic development agenda.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

India’s Unemployment Rate Declines: PLFS 2022-2023

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Periodic Labour Force Survey (PLFS)

Mains level: Not Much

Central Idea

  • The latest findings from the Periodic Labour Force Survey (PLFS), conducted by the National Sample Survey Office (NSSO), reveal a decrease in India’s unemployment rate for the period between April and June 2023.
  • This encouraging trend is accompanied by improvements in the Labour Force Participation Rate (LFPR) and the Worker-Population Ratio (WPR), signifying positive shifts in the country’s labor market.

About Periodic Labour Force Survey (PLFS)

Objective Collect comprehensive labor market data in India.
Conducted by Ministry of Statistics and Programme Implementation (MoSPI), Government of India.
Replacement for Replaced earlier employment-unemployment surveys by NSSO.
Frequency Conducted periodically, with rounds typically spanning a year.
First Round Conducted in July 2017-2018, marking the survey’s initiation.
Data Categories Employment status, unemployment rate, sector-wise employment, income, demographics, and more.
Sampling Methodology Sample survey approach with data collected from households and individuals through a scientific sampling process.
Policy Impact Informs government policies related to employment, labor market interventions, and economic planning.

 

2022-23 Survey Overview

  • Scope: The national survey compiled data from 5,639 first-stage sampling units (FSUs) and encompassed 1,67,916 individuals residing in 44,190 urban households.
  • Age Group: The survey focused on individuals aged 15 years and above.

Improvements in Urban Labour Force Participation

  • LFPR Uptick: The LFPR in urban areas exhibited growth, rising from 47.5% in April-June 2022 to 48.8% in the corresponding months of 2023 for individuals aged 15 years and above.
  • Gender Disparities: While the LFPR remained stable at approximately 73.5% for males during this period, it notably increased for females, climbing from 20.9% to 23.2%.

Enhanced Worker-Population Ratio

  • WPR Gains: In urban areas, the WPR increased from 43.9% in April-June 2022 to 45.5% during the same period in 2023 for individuals aged 15 years and above.
  • Gender-Specific Improvements: For males, the WPR progressed from 68.3% to 69.2%, and for females, it surged from 18.9% to 21.1% over this timeframe.

Decrease in Unemployment Rate

  • Declining Unemployment: The PLFS reported a diminishing trend in the Unemployment Rate (UR) for individuals aged 15 years and above in urban areas.
  • UR in Urban Areas: It decreased from 7.6% in April-June 2022 to 6.6% in April-June 2023.
  • Gender-Based UR: For males, the UR dropped from 7.1% to 5.9%, while for females, it decreased from 9.5% to 9.1% during this period.

Comparative Analysis

  • Positive Trends: The report highlights improvements in key labor market indicators in urban areas when compared to the pre-pandemic period (April-June 2018 to October-December 2019).
  • LFPR Improvement: The LFPR ranged from 46.2% to 47.8% during the pre-pandemic period and has now reached 48.8%.
  • WPR Enhancement: Pre-pandemic WPR figures ranged from 41.8% to 44.1%, while the current WPR stands at 45.5%.
  • Lower UR: Unemployment rates during the pre-pandemic period fluctuated between 7.8% and 9.7%, with the latest survey reporting a lower UR of 6.6%. This rate is deemed favorable compared to the unemployment rates observed in the quarters preceding the pandemic.

Conclusion

  • The Periodic Labour Force Survey (PLFS) results reflect positive developments in India’s labor market, marked by a decreasing unemployment rate, improved labor force participation, and enhanced worker-population ratios.
  • These trends indicate a resilient labor market recovery and may signify the nation’s progress towards economic stability and job creation.

Back2Basics:

  • Labour Force Participation Rate (LFPR): LFPR is defined as the percentage of persons in labour force (i.e. working or seeking or available for work)in the population.
  • Worker Population Ratio (WPR): WPR is defined as the percentage of employed persons in the population.
  • Unemployment Rate (UR): UR is defined as the percentage of persons unemployed among the persons in the labour force.
  • Activity Status- Usual Status: The activity status of a person is determined on the basis of the activities pursued by the person during the specified reference period. When the activity status is determined on the basis of the reference period of last 365 days preceding the date of survey, it is known as the usual activity status of the person.
  • Activity Status- Current Weekly Status (CWS): The activity status determined on the basis of a reference period of last 7 days preceding the date of survey is known as the current weekly status (CWS) of the person.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Circular migration

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Circular Migration

Mains level: Concept- Circular Migration, Circular Migration in India, advantages and challenges and measures

What’s the news?

  • Circular migration gained prominence in the wake of globalization and technological advancements, facilitating easier mobility. As the world grapples with migration challenges, circular migration emerges as a balanced approach.

Central idea

  • Circular migration, characterized by the cyclical movement of people between their country of origin and a destination country in search of seasonal employment, has gained significance in the global context. It offers unique opportunities and challenges in the realm of migration policy and development.

Defining Circular Migration

  • Philippe Fargues defines circular migration based on specific criteria, including temporary residence, multiple entries into the destination country, freedom of movement between origin and destination, legal rights for migrants, protection of their rights, and a demand for temporary labor in the destination country.
  • A key aspect is the completion of at least two loops between two countries, signifying repeated movement.
  • For instance, if a migrant moves from country A to B and back to A, they are considered a return migrant. However, if they continue to country B again, they have completed two loops, earning them the label of a circular migrant.

Circular Migration as Public Policy

  • For countries of origin: Remittances from circular migrants boost the domestic economy, fostering infrastructure development and improving living standards. However, it also poses the risk of losing skilled individuals to other nations.
  • For destination countries: Circular migration provides a source of low-skilled labor while minimizing permanent population growth

The Advantages of Circular Migration in India

  • Rural to Urban Migration:
  • The growth of jobs in sectors like manufacturing, construction, and services has driven a substantial flow of migrants from rural areas to urban cities.
  • This trend has been particularly pronounced between 2004–2005 and 2011–2012 when the construction sector witnessed a significant increase in employment, especially for rural males.
  • This movement has provided rural populations with access to urban employment opportunities.
  • Inter-State Migration:
  • Uneven development following liberalization policies has led to inter-State migration. States like West Bengal, Odisha, and Bihar have witnessed high rates of out-migration.
  • While Delhi was historically a prominent destination, recent trends indicate an increased flow of migrants to southern States as well.
  • Economic Benefits:
  • Migrants often transition from agricultural jobs in their home states to low-skill jobs in destination states.
  • This shift typically results in increased income, with daily wage laborers in Kerala earning substantially more compared to their counterparts in states like West Bengal.
  • Household Welfare: Circular migration contributes to better household welfare through remittances sent back by migrants. These funds support improved nutrition, enhanced access to education and healthcare, and an overall increase in the standard of living for migrant families.
  • Empowerment of Women: The absence of male family members due to migration often leads to increased autonomy and decision-making power for women in migrant households. This shift in gender dynamics can have positive social and cultural implications.

Challenges

  • Exploitation and Unsafe Conditions: Migrants, especially in southern States, often find themselves vulnerable to exploitation by middlemen or brokers. They may be subjected to unhygienic and unsafe working conditions, often without protective equipment.
  • Language Barriers: Language differences pose a significant obstacle for migrants, particularly when migrating to regions where the local language differs from their native tongue.
  • Resentment and Wage Disputes: Indigenous wage groups and labor unions may resent circular migrants, viewing them as competitors willing to work for lower wages. This can lead to wage disputes and conflicts.
  • Subsistence Migration: Many circular migrants engage in subsistence-level employment, with limited opportunities for savings or asset creation. Jobs are often seasonal and irregular, contributing to economic precarity.
  • Return Migration during Crises: The COVID-19 pandemic highlighted the vulnerability of circular migrants. When a lockdown was imposed in 2020, many migrants embarked on long journeys back to their hometowns due to the lack of job opportunities in the host States.

The Way Forward: Measures to fully unlock the potential of circular migration

  • Ensuring Migrant Rights: Robust protection of migrant rights is crucial to address exploitation and abuse.
  • Skills Training: Providing migrants with skills training and language proficiency programs can enhance their employability and integration into host communities.
  • Safety Nets: Establishing social safety nets for circular migrants during times of crisis, such as the pandemic, is essential to prevent humanitarian disasters.
  • Integration Efforts: Encouraging integration initiatives in destination areas can help migrants feel more included and less marginalized.
  • Data Collection and Research: Governments should invest in data collection and research to better understand the extent and dynamics of circular migration.

Conclusion

  • Circular migration presents a viable pathway to balance the needs of development and individual economic advancement. As circular migration continues to shape the global landscape, it is imperative that governments and policymakers adapt their strategies to harness its potential for the greater good.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Do subsidies and safety nets take focus away from generating jobs?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Jobless growth, subsidies and safety nets

What’s the news?

  • India’s impressive economic growth numbers have not translated into a commensurate increase in employment opportunities.

Central idea

  • Despite India’s impressive economic growth numbers, employment has not seen a commensurate increase. With five states heading to the polls at the end of the year, political parties are making various promises to address concerns about rising essential commodity prices. However, the question arises: Are these promises merely distractions from the systemic issue of jobless growth?

Promises vs. Solutions: Are Electoral Promises Diverting Attention from Jobless Growth?

  • Unemployment’s Stark Reality: India’s economic growth stands in stark contrast to the persistent issue of unemployment, particularly among educated youth.
  • Varied Electoral Promises: Political parties have introduced a range of electoral promises, including measures like providing cheaper gas cylinders and farm loan waivers. These promises often vary in their impact and effectiveness.
  • State-specific Examples: In states like Chhattisgarh and Madhya Pradesh, where unemployment is a significant concern, electoral promises such as the Old Pension Scheme (OPS) may not effectively address the broader issue.

Agriculture’s Predicament: Can Supply Chain Vulnerabilities and Non-Remunerative Prices be Effectively Addressed?

  • Critical Supply Chain Resilience: The agriculture sector, India’s largest employer, grapples with issues like supply chain vulnerabilities. These vulnerabilities can be exacerbated by factors such as climate change.
  • Transforming Agricultural Output: To tackle the challenge of non-remunerative prices for produce, technological interventions aimed at converting agricultural output into higher-value products are proposed as long-term solutions.
  • Palliatives Amidst Inflation Concerns: In some states like Chhattisgarh, promises like providing ₹1,500 a month for women in distress are seen as addressing purchasing power issues. However, concerns about potential inflation due to such measures must be taken into account.

Fiscal Responsibility and Unemployment: Is There a Correlation?

  • The Paradox of Fiscal Responsibility: States like Haryana, which strictly adhere to fiscal responsibility guidelines, continue to face high unemployment rates. This paradox highlights the complex relationship between populist policies and fiscal distress.
  • Emphasis on Revenue Mobilization: To effectively implement populist policies, a focus on revenue mobilization efforts is crucial. It’s necessary to ensure that such policies do not strain state finances in the long run.

Do subsidies and safety nets take focus away from generating jobs?

  • Immediate Relief vs. Long-term Employment:
  • Subsidies and safety nets offer immediate relief to vulnerable sections of the population, addressing issues like distress and purchasing power.
  • However, there is a concern that an overemphasis on such measures may shift focus away from the more significant task of generating sustainable employment opportunities.
  • Balancing Priorities:
  • Balancing the need for immediate relief with the long-term goal of job creation is a complex challenge.
  • While subsidies and safety nets serve a critical purpose, they must be complemented with policies and strategies that promote job generation, particularly in sectors that can absorb the workforce effectively.
  • Policy Design and Implementation:
  • Effective policymaking should aim to strike a balance between providing immediate support and fostering job growth.
  • It is essential to design policies that not only address the distress of vulnerable populations but also contribute to sustainable economic development by generating employment opportunities.

Rethinking Economic Growth: Beyond GDP and Toward Employment

  • Shifting the Focus from GDP: A Shift away from the Traditional Obsession with GDP Growth It emphasizes that economic growth should be intertwined with employment generation to make a meaningful impact on the lives of citizens.
  • Exploring New Avenues: Rather than investing heavily in high-tech industries like semiconductor manufacturing, the article suggests exploring sectors such as mining for the energy transition. Mining can create local jobs, particularly benefiting marginalized communities and addressing unemployment.

Conclusion

  • Addressing jobless growth in India requires a nuanced approach. While populist promises serve as palliatives in the absence of structural solutions, the focus should shift towards inclusive growth, technological interventions, and employment-centric policies that tackle supply chain vulnerabilities and promote sustainable economic development.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Unemployment: Measurement Challenges in Developing Economies

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Periodic Labour Force Survey (PLFS)

Mains level: Read the attached story

Central Idea

  • The Periodic Labour Force Survey (PLFS) in 2017 revealed India’s highest-ever recorded unemployment rate at 6.1%.
  • The 2021-22 PLFS indicated a reduction to 4.1%, still higher than some developed economies like the U.S., where unemployment rates varied from 3.5% to 3.7% between July 2022 and July 2023.
  • Comparing India and the U.S. unemployment rates is complex due to their vastly different economies.

unemployment

About Periodic Labour Force Survey (PLFS)

Established 2017 (The PLFS was initiated in 2017 as part of the larger National Sample Survey (NSS) program)
Administered by National Sample Survey Office (NSSO), Ministry of Statistics and Programme Implementation, Government of India
Objective To collect data on labor force participation, employment, and unemployment in India.
Key Data Collected – Workforce Participation

– Employment Types and Sectors

– Unemployment

– Demographic and Socioeconomic Characteristics

Significance Provides vital information for policymaking, research, and analysis related to the labor market in India.
Frequency Periodic surveys conducted at regular intervals.

 

Defining Unemployment

  • Unemployment, as per the International Labour Organization (ILO), involves being jobless, available for work, and actively seeking employment.
  • The unemployment rate is the ratio of the unemployed to the labor force, but it can decrease if the economy lacks job creation or people stop job hunting.

Measuring Unemployment in India

  • In developing economies, like India, social norms can limit job search decisions.
  • The 2009-10 National Sample Survey Organisation (NSSO) survey revealed that many women who engaged in domestic work would work if opportunities were available within their households but are not considered unemployed since they aren’t actively seeking jobs.
  • Measuring unemployment in India is complicated due to the informal job market, where individuals hold various roles throughout the year.

Different Metrics for Classification

  • The Usual Principal and Subsidiary Status (UPSS) and the Current Weekly Status (CWS) are two major measures for classifying individuals in India.
  1. UPSS considers an individual employed even if they worked for more than 30 days in a subsidiary role.
  2. CWS counts an individual as employed if they worked at least one hour on one day within the past week.
  • UPSS typically yields lower unemployment rates than CWS since finding work over a year is more likely than in a week.

Impact of Informal Economy

  • The low bar for classifying individuals as employed means that unemployment rates are lower in rural areas than urban regions in agrarian economies.
  • Definitions may ‘underestimate’ unemployment but are designed to capture the informal economy’s nuances.

The Lockdown Effect

  • The lockdown in March 2020 disrupted the Indian economy, but PLFS unemployment rates did not reflect this immediately.
  • UPSS status may still consider those who lost jobs during the lockdown as employed if they spent most of the previous year working.
  • CWS criteria show higher unemployment rates due to shorter reference periods but may not fully capture the long-term impact of the lockdown when aggregated across different periods.

Conclusion

  • Unemployment is becoming a significant factor in upcoming elections, making it crucial to understand its definition and measurement complexities in developing economies.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Progress track: Aatmanirbhar Bharat Rozgar Yojana (ABRY)

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Atmanirbhar Bharat Rozgar Yojana

Mains level: Not Much

Central Idea

  • The Aatmanirbhar Bharat Rozgar Yojana (ABRY) by the Central Government has outperformed its initial employment targets, proving its effectiveness in fostering job creation during the COVID-19 crisis.

About Aatmanirbhar Bharat Rozgar Yojana (ABRY)

Launch Introduced in November 2020
Purpose As part of Atmanirbhar Bharat Package 3.0 to boost post-Covid-19 employment
Government’s Contribution Subsidy for provident fund contributions in EPFO-registered organizations
Coverage Up to 1000 employees: Both employee (12%) and employer (12%) contributions for two years

Over 1000 employees: Employee (12%) contribution for two years

Subsidy Disbursement Subsidy credited upfront to Aadhaar-linked EPFO accounts (UAN) of new employees
Eligibility Criteria Establishments adding new employees compared to September 2020 reference base
Target Beneficiaries Employees with monthly wages under Rs. 15,000 joining EPFO-registered establishments

Individuals reemployed on or after October 1, 2020, who left jobs between March 1 and September 30, 2020

 Achievements and Numbers

  • The scheme, open for registrations until March 31, 2022, targeted around 7.18 million employees across India.
  • By July 31, 2023, ABRY had already exceeded its target, enrolling over 7.58 million new employees.
  • Benefiting 1,52,380 establishments with 60,44,155 new employees, the scheme disbursed benefits totaling Rs. 9,669.87 Crore.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Gig Workers Bill: reading between the lines

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill,

Mains level: Gig Workers, Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill, significance and major issues

What’s the news?

  • The Rajasthan government introduced the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill, 2023, aiming to ensure social security for gig workers.

Central idea

  • While the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill, 2023, demonstrates commendable intentions and includes noteworthy provisions, critical concerns arise that might undermine its effectiveness. There are four major issues that could potentially limit the scope and impact of the bill.

Key Features of the Bill

  • Applicability: The bill covers both aggregators and primary employers engaging platform-based workers.
  • Formation of a Welfare Board: A Welfare Board will be established, chaired by the Labor Department’s minister, to oversee welfare measures for gig workers.
  • Registration and Unique ID: Gig workers and aggregators will be registered, and gig workers will receive a unique ID for streamlined welfare access.
  • Social Security and Welfare Fund: A dedicated fund will offer social security benefits to registered gig workers.
  • Welfare Fee Deduction: Aggregators will contribute through a welfare fee deducted from transactions.
  • Access to Benefits: Gig workers will gain access to state-formulated social security benefits, including insurance.
  • Grievance Redressal: A mechanism for addressing worker grievances will be in place.
  • Representation: Gig workers will have representation on the Welfare Board for decision-making.
  • Compliance and Fines: Aggregators must comply, with fines for non-compliance.

Four major issues that could potentially limit the scope and impact of the bill

1: Definitional Ambiguity

  • Definitions from the Bill and their Implications:
  • The Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill, 2023, introduces definitions for gig worker and aggregator derived from the Code on Social Security, 2020.
  • The definitions are intended to clarify the roles and relationships of gig workers and aggregators within the gig economy.
  • Definitions of gig worker and aggregator:
  • The bill defines a gig worker as an individual engaged in work outside the traditional employee-employer paradigm, earning from such activities, and operating under a predetermined payment rate contract.
  • An aggregator is described as a digital intermediary that facilitates collaborations between aggregators, enabling service provision.
  • Ambiguity in Determining the Aggregator’s Status:
  • The definitions’ lack of precision in categorizing aggregators as employers creates uncertainty.
  • The absence of explicit language binding aggregators to the role of employers leads to interpretational ambiguity.
  • Implications of Definitional Vagueness:
  • The vagueness could potentially result in gig workers being seen as self-employed or independent contractors rather than employees by aggregators.
  • This vagueness contrasts with global best practices and sets the stage for the subsequent issue.
  • Global Context and Significance:
  • The debate over classifying gig workers and aggregators as employees or employers has global implications.
  • The ABC Test in California’s labor code highlights the importance of clear classification, while the UK Supreme Court’s ruling in 2021 regarding Uber drivers further highlights the significance of accurate classification, underscoring that they are workers, not self-employed.
  • Contrast with global practices:
  • The Rajasthan Bill’s vague definitions deviate from global best practices, raising concerns about the subsequent challenges.

2: Integration with Labor Laws and Workplace Entitlements

  • Classification of Gig Workers and Impact on Labor Laws:
  • The Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill, 2023, does not classify gig workers as employees.
  • The absence of employee classification poses challenges in integrating the bill with established labor law frameworks.
  • Challenges in Compliance and Workplace Rights:
  • Non-classification could allow aggregators to bypass labor law mandates, potentially undermining gig workers’ workplace rights.
  • Gig workers might be denied rights granted to employees, such as minimum wages and fair working conditions.
  • Exclusion from entitlements and Fairwork India ratings:
  • The bill’s provisions may unintentionally exclude gig workers from essential entitlements, potentially impacting their well-being.
  • Fairwork India ratings in 2022 highlighted poor worker welfare practices among prominent platforms.
  • Accountability for workplace accidents
  • The question arises: If gig workers are not designated as employees, to what extent can aggregators be held accountable for workplace accident expenses?
  • Some Indian platforms have addressed this issue, but relying on aggregators’ goodwill risks converting entitlements into benevolence.
  • Contrast with Australia and New Zealand’s Approach:
  • Australia and New Zealand’s focus on a person conducting a business or undertaking (PCBU) and worker well-being highlights an alternative approach to workplace rights.

3: Duration of the Database and Implications for Gig Workers

  • Database Creation and Durational Concerns:
  • The bill’s third issue concerns the creation of a gig worker database transferred to the gig workers’ welfare board.
  • A concern arises from the registration’s perpetual validity, irrespective of workers’ ongoing engagement with app-based platforms.
  • Obstacle to Perpetual Registration:
  • The well-intended perpetual registration concept could inadvertently hinder gig workers’ flexibility.
  • Gig workers often work with multiple aggregators in a single day, leading to concerns about registration’s impact on choices.
  • Potential influence on choices and mechanisms:
  • Mandatory registration might enable aggregators to learn about workers’ engagements with various platforms, possibly influencing their choices.
  • The bill lacks preventive mechanisms to address this potential influence.

4: Deficiencies in Social Security Provisions

  • Social Security and Welfare Board Establishment:
  • The bill’s fourth issue revolves around its core goal of providing social security to platform-based gig workers through a welfare board and fund.
  • Eight aggregators are brought under the bill’s jurisdiction, but it lacks explicit definitions of social security and welfare measures.
  • Discretionary Nature of Social Security Provisions:
  • The bill delegated the responsibility of defining social security measures to the welfare board’s discretion.
  • This lack of specificity raises concerns about the comprehensiveness and effectiveness of the proposed social security provisions.
  • Lack of explicit definitions and ambiguity:
  • The absence of clear definitions for social security leaves room for interpretation and may affect the welfare board’s decision-making process.
  • Influence dynamics within the Welfare Board:
  • While the welfare board includes gig worker representatives, the dominance of powerful representatives from platforms, bureaucracy, and the government raises questions about the extent of worker influence.

Way forward

  • Refine Definitions: Clarify gig worker and aggregator definitions based on global standards to prevent ambiguity in their roles.
  • Employee Classification: Clearly categorize gig workers as employees to grant them labor protections and rights.
  • Database Management: Implement a periodic registration renewal system to accommodate gig workers’ changing engagements.
  • Preventive Measures: Introduce safeguards to prevent aggregators from exploiting registration data to influence gig workers’ choices.
  • Social Security Definition: Define the scope of social security and outline welfare measures to ensure comprehensive coverage.
  • Enhanced Worker Representation: Strengthen the influence of gig worker representatives on the welfare board.
  • Stakeholder Consultation: Collaborate with gig workers, aggregators, experts, and labor organizations for a well-rounded regulatory framework.

Conclusion

  • In conclusion, while the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill, 2023, demonstrates a commendable commitment to gig workers’ welfare, it is beset with critical flaws. Addressing the issues and aligning with global best practices will be crucial for the Bill to achieve its intended objectives and provide genuine social security to platform-based gig workers.

Also read:

What does India’s first gig workers’ rights Bill stipulate?

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Bitter truths in Maharashtra’s sugar fields

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Seasonal Migrant Workers, challenges and policies

sugar

What’s the news?

  • The High Court of Bombay has recently taken suo motu cognisance of the exploitation of the intra-State workforce that migrates seasonally from the drought-affected and water-scarce regions of Marathwada to the sugar-belt region of western Maharashtra.

Central Idea

  • According to the Maharashtra Sugar Commissioner, in 2022-23, the net area under sugar cane was 1.487 million hectares, and there were 203 crushing factories in the State that were expected to produce 138 lakh metric tons of sugar. Though intra-State migrant workers form the backbone of the sugar cane industry and economic growth, they have remained critically marginalised and oppressed for several decades.

Seasonal Migrant Workers

  • Seasonal migrant workers are individuals who temporarily migrate from one region or area to another for work during specific seasons or periods of the year.
  • These workers move to places where demand for labor is higher during certain agricultural or industrial activities, often due to seasonal variations in work opportunities.
  • For example, Workers from the drought-affected and water-scarce regions of Marathwada in Maharashtra migrate to the sugar-belt districts of western Maharashtra. They do so to work in the sugar cane industry, particularly during the harvesting season.

Challenges faced by the these workers 

  • Exploitative Labor Practices: Seasonal migrant workers in the sugar cane industry are often recruited through labor contractors known as Mukadams. This exploitative system allows sugar factories to obtain a large volume of temporary, cheap, and efficient workforce.
  • Low Wages and Job Insecurity: Migrant workers often receive low wages for their labor, and their work is typically temporary and seasonal. As a result, they face uncertainty about future employment opportunities.
  • Inadequate Working Conditions: The nature of sugar cane harvesting and processing tasks can be physically demanding and hazardous. Workers, including women, may engage in strenuous work, such as head loading, leading to accidents.
  • Lack of Social Protection: Seasonal migrant workers may lack access to social protection schemes, such as health insurance and other benefits, leaving them financially vulnerable in case of illness or injury.
  • Invisibility and Marginalization: Migrant workers are often marginalised and overlooked in the regions where they migrate for work. This invisibility can limit their access to essential services, education, and healthcare.
  • Education Challenges for Children: Children accompanying their parents may face disruptions in their education due to migration, and there may be insufficient alternative schooling models, impacting their learning and development.

Primary drivers of this migration

  • Lack of Employment Opportunities:
  • Marathwada, being a region with drought-prone areas and water scarcity, faces challenges in providing sufficient employment opportunities to its rural population.
  • The agricultural sector, which is the primary source of employment, often experiences prolonged unemployment after the sowing of rabi crops, leaving many small and marginal peasant households without work.
  • Crop Failures and Debt: The region of Marathwada is susceptible to crop failures due to erratic monsoons and water shortages. Repeated crop failures result in the accumulation of debt for many farmers and agricultural laborers, making their economic situation precarious.
  • Acute Unemployment: Apart from crop-related employment, there may be limited industries or economic activities in the region that can absorb the surplus labor during non-agricultural seasons, leading to acute unemployment.
  • Attractive Job Opportunities in the Sugar Cane Industry:
  • The sugar-belt districts of western Maharashtra, such as Sangli, Kolhapur, Pune, Satara, Solapur, and Ahmednagar, are known for their sugar cane industry.
  • During the sugar cane harvesting and processing seasons, there is a high demand for labor in the sugar factories and fields, making it an attractive destination for seasonal migrant workers seeking employment.
  • Mukadam System and Labor Contractors:
  • The Mukadam system/ contractors act as intermediaries and provide labor couples to the factories.
  • Workers, often in need of employment, rely on the Mukadams, creating a system of dependence that perpetuates the migration.
  • Lack of Diversified Livelihood Options: Limited livelihood diversification in the home region may prompt individuals to seek employment opportunities in other regions with more robust economic activities.

Concerns and challenges in framing meaningful policies 

  • Inadequate Data and Migration Tracking:
  • Lack of comprehensive data is hindering the formulation of meaningful policies for seasonal migrants, making it difficult to address their specific needs effectively.
  • The Migration Tracking System (MTS) application, launched by the Women and Child Development Department in 2022, aimed to track and enumerate seasonal migrants, particularly focusing on children, pregnant women, and lactating mothers to ensure their well-being and access to services.
  • However, the MTS falls short in providing a complete picture of seasonally migrating families, including their employment status, wage structure, and entitlement coverage.
  • Plight of Women:
  • Women working in the sugar cane industry face strenuous and hazardous tasks, such as headloading cane bundles and carrying heavy weights on trucks or trolleys (Oxfam India 2020).
  • Their work adversely impacts their bodies, causing musculoskeletal disorders and several gynecological issues (Oxfam India 2020).
  • Early and forced marriages among migrant women lead to problems for adolescent girls, resulting in early pregnancies (15-17 years), deliveries without trained birth attendants, and frequent childbirth (UNESCO).
  • Studies have also reported recurring cases of violence and sexual harassment linked to labor contractors (Mukadams) and male workers, further exacerbating the vulnerabilities faced by migrant women.
  • Plight of Children:
  • Children accompanying their parents to sugar cane fields face blatant violations of the Right to Education (National Education Policy, NEP, 2020).
  • The lack of sufficient alternative schooling models affects their education, potentially forcing them into child labor.
  • School records often fail to acknowledge the physical absence of these children from school, perpetuating the lack of proper education for them (International Institute for Population Sciences, IIPS, and UNICEF, 2022)

Way forward: Need for government interventions

  • Data Collection and Migration Tracking System (MTS): The government should conduct a periodic and time-bound enumerating exercise to create a credible databank of seasonal migrants. Expand the scope of the Migration Tracking System (MTS.
  • Empowering Labor Administration: Strengthening labor administration and enforcing labor laws is essential to protect the rights of migrant workers. Regular inspections should be conducted.
  • Holistic Policy Development: Formulate comprehensive policies specifically addressing the needs of seasonal migrants. Collaborate with different Ministries and Departments to address the multi-dimensional challenges faced by migrant workers and their families.
  • Addressing Women’s Plight: Implement long-term intervention strategies to address the challenges faced by women migrant workers. Provide training and opportunities for skill development to enhance their economic independence and ensure their health and safety in the workplace.
  • Ensuring Children’s Education: Implement alternative schooling models for children accompanying their parents to sugar cane fields. Protect their Right to Education and prevent them from being forced into child labor.
  • Access to Justice and Safe Working Conditions: Ensure that seasonal migrants have access to justice and are guaranteed safe and healthy working and living conditions. Address the exploitative Mukadam system prevalent in the sugar cane industry to protect the workers’ rights.

Conclusion

  • Empowering seasonal migrant workers in Maharashtra’s sugar cane industry is crucial to fostering inclusive economic growth and protecting human rights. The State government must act with strong political will to formulate comprehensive policies and interventions that address the vulnerabilities faced by these workers at both the source and destination regions.

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What does India’s first gig workers’ rights Bill stipulate?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Concepts of gig economy, gig workers and Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill,

Mains level: Gig economy, Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill, significance, concerns a way forward

Gig

What’s the news?

  • The Rajasthan Assembly on Monday passed the Platform-Based Gig Workers (Registration and Welfare) Bill, 2023, without a debate amid uproar by the opposition members in the House.

Central Idea

  • The Rajasthan government has taken a significant stride towards safeguarding the interests of gig workers with the passage of the Rajasthan Gig Workers Bill, 2023. This groundbreaking legislation, the first of its kind, seeks to establish a Welfare Board and a dedicated welfare fund, ensuring social security measures for platform-based gig workers in the state.

Definition of gig Workers?

  • The bill defines gig workers as individuals who perform work or participate in work arrangements outside the traditional employer-employee relationship. These workers earn from such activities and typically work on a contract that outlines specific terms and conditions, including piece-rate work.
  • Gig workers are often associated with the gig economy, which is characterized by a flexible and on-demand labor market. They may work in various sectors, including ride-hailing, food delivery, online freelancing, home services, and other platform-based services.

Key features of the bill

  • Applicability: The bill applies to both aggregators, which are digital intermediaries connecting buyers and sellers, and primary employers, encompassing individuals or organizations that engage platform-based workers.
  • Formation of Welfare Board: A crucial aspect of the legislation is the establishment of a Welfare Board, chaired by the minister in charge of the Labour Department. The Board will consist of nominated members, with at least one-third representing women. It will be responsible for overseeing and implementing welfare measures for platform-based gig workers in the state.
  • Registration and Unique ID: The Welfare Board will ensure the registration of both platform-based gig workers and aggregators operating within the state. Each gig worker will receive a Unique ID applicable across all platforms, streamlining access to various welfare schemes and benefits.
  • Social Security and Welfare Fund: To support registered gig workers, the state government will create The Rajasthan Platform Based Gig Workers Social Security and Welfare Fund. This dedicated fund will be utilized to provide social security benefits to gig workers, enhancing their financial protection.
  • Welfare Fee Deduction Mechanism: Aggregators will be responsible for contributing to the welfare fund by deducting a welfare fee from each transaction related to platform-based gig workers. The fee will be based on a percentage of the transaction value, ensuring a sustainable funding mechanism for gig workers welfare.
  • Access to Social Security Benefits: The Bill guarantees gig workers access to various social security benefits formulated by the state government. These benefits are intended to offer financial protection and support to gig workers during times of need, such as accidental insurance and health insurance.
  • Grievance Redressal Mechanism: Gig workers will have the right to present grievances related to entitlements, payments, and benefits offered under the Act. A robust grievance redressal mechanism will be put in place to address these concerns and ensure timely resolutions.
  • Representation in Decision-Making: Gig workers will have a voice in decisions impacting their welfare through representation on the Welfare Board. This provision ensures that the interests of gig workers are taken into account when formulating policies and programs.
  • Compliance and Fines: Aggregators are mandated to comply with the provisions of the Act and the rules set forth by the Welfare Board. Failure to adhere to these regulations may lead to fines imposed by the state government. For the first contravention, a fine of up to Rs 5 lakh may be imposed, and for subsequent contraventions, the fine may extend up to Rs 50 lakh.

Concerns raised over the bill

  • Vague Terminologies: Labor unions have objected to the use of vague terminologies in the bill, fearing that they may create loopholes for companies and aggregators. The lack of clarity in definitions and language could potentially weaken the protection provided to gig workers.
  • Funding Mechanism: Labor unions have expressed concerns about gig workers being required to contribute to the welfare fund. They argue that the funding burden should primarily fall on aggregator companies and State funds due to the fluctuating and inadequate nature of gig workers’ pay.
  • Scope of Social Security Benefits: The bill’s limited mention of social security benefits, primarily focusing on accidental insurance and health insurance, has been criticized. Labor unions recommend a comprehensive list of benefits to ensure adequate coverage for gig workers.
  • Grievance Redressal Mechanism: Concerns have been raised about the effectiveness and responsiveness of the grievance redressal mechanism outlined in the bill. Reports of ineffective redressal mechanisms for gig workers have raised doubts about their efficacy.
  • Definition of Gig Workers: Some stakeholders have questioned the scope of the bill’s definition of gig workers, as there may be other forms of gig workers not covered under the defined criteria.
  • Rights Recognition: While the bill improves on the eligibility criteria compared to existing labor laws, critics argue that gig workers may not be fully recognized as employees entitled to certain labor rights.
  • Implementation Challenges: The successful implementation of the bill relies on the effectiveness of the Welfare Board and State government in ensuring seamless registration, representation, and benefit distribution to gig workers.

Way forward

  • Addressing Concerns: Hold consultations with labor unions and stakeholders to clarify ambiguous terms and ensure a more equitable funding mechanism for the welfare fund.
  • Comprehensive Social Security Benefits: Expand benefits to include disability coverage, maternity benefits, and retirement benefits, in addition to accidental and health insurance.
  • Strengthening Grievance Redressal: Establish a responsive mechanism for prompt resolution of disputes between gig workers and aggregators.
  • Empowering the Welfare Board: Provide adequate resources and authority to the Welfare Board for effective implementation and decision-making.
  • Periodic Review and Feedback: Conduct regular evaluations to assess the bill’s impact and seek feedback from gig workers, labor unions, and aggregators.
  • Awareness and Outreach: Organize awareness campaigns to educate gig workers about their rights and entitlements.
  • Transparent Implementation: Ensure transparency in registration, benefit distribution, and fund utilization.
  • Collaborative Approach: Foster collaboration among government departments, labor unions, aggregators, and gig worker representatives for an inclusive framework.

Conclusion

  • The Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill, 2023, sets a notable precedent for acknowledging the significance of gig workers and their rights in the Indian workforce. While the legislation addresses various aspects related to the welfare and social security of gig workers, there remains room for refinement and further expansion of benefits to ensure their overall well-being and empowerment.

Also read:

Rajasthan minimum income Bill: provisions, what makes it unique

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Global Slavery Index: Controversies with modern Metric

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Global Slavery Index, 2023

Mains level: Forced labour

global slavery
PC: Indian Express

Central Idea

  • Report published: Published last week, the global slavery index provides an overview of modern slavery.
  • 50 million people in modern slavery: The report reveals that approximately 50 million individuals were living in “modern slavery” on any given day in 2021.
  • Existing slavery: Out of the 50 million affected, 28 million suffer from forced labor, while 22 million experience forced marriages. Shockingly, 12 million of those impacted are children.

Definition of Modern Slavery

  • Exploitation and inability to refuse or leave: “Modern slavery” encompasses situations where individuals are exploited and cannot decline or escape due to threats, violence, coercion, deception, or abuses of power.
  • Broad range of abuses: Modern slavery is an umbrella term that covers various forms of exploitation, including forced labor, forced marriage, debt bondage, sexual exploitation, human trafficking, slavery-like practices, forced or servile marriage, and the sale and exploitation of children.

What is Global Slavery Index?

  • Constructed by Walk Free: The Index is created by Walk Free, a human rights organization.
  • Based on Global Estimates of Modern Slavery: The index relies on data provided by the Global Estimates of Modern Slavery, which is produced by the International Labour Organization (ILO), Walk Free, and the International Organization for Migration (IOM).
  • Fifth edition: The recently published Global Slavery Index is the fifth edition and is based on the estimates from 2022.
  • Country-wise estimates: While initial estimates are regional, the index employs representative surveys to determine country-specific estimates.
  • Metrics: The index examines the prevalence of modern slavery by calculating the incidence per 1000 population.

Country-wise Findings

  • Highest prevalence of modern slavery: The following ten countries have the highest prevalence: North Korea, Eritrea, Mauritania, Saudi Arabia, Turkey, Tajikistan, United Arab Emirates, Russia, Afghanistan, and Kuwait.
  • Countries with lowest prevalence: Switzerland, Norway, Germany, Netherlands, Sweden, Denmark, Belgium, Ireland, Japan, and Finland have the lowest prevalence of modern slavery.
  • Countries hosting the most people in modern slavery: The top ten countries are India, China, North Korea, Pakistan, Russia, Indonesia, Nigeria, Turkey, Bangladesh, and the United States.

Criticisms of the Index

  • Lack of internationally agreed definition: One criticism is the absence of a universally accepted definition for modern slavery, unlike trafficking in persons which has an agreed-upon definition.
  • Calculation based on “risk score”: Factors determining the risk often align with those used to classify countries as developed or developing, potentially leading to biased conclusions.
  • Discrepancies in statistics: For instance, the index highlights the UK as having the “strongest government response to modern slavery,” but later mentions a decline in the UK’s overall response and potential violation of international law.

Challenges faced by developing countries

  • Workers in countries like India: Countries such as India face significant challenges concerning modern slavery, as evidenced by the hardships experienced by workers during the COVID lockdown and subsequent reverse migration.
  • Status of women: Women, particularly in terms of economic freedoms, face significant disparities, contributing to issues related to modern slavery.

Addressing the Issues

  • Importance of addressing worker precarity: It is crucial to address the precarious situations faced by workers, particularly in the post-pandemic era and during G20 presidencies.
  • Responsibilities of countries: Countries, especially G20 nations, bear the responsibility to combat issues like trafficking and modern slavery, rather than stigmatizing poorer nations and absolving richer nations of their obligations.

India’s measures against on modern slavery

  • India has passed laws like the Bonded Labour Abolition Act of 1976 to address modern slavery.
  • However, implementation challenges, corruption, legal loopholes, and lack of political hinder effective enforcement of these laws.
  • Moreover, there are lacunas in the proper identification and enumeration of people trapped in modern slavery conditions.

Way forward

  • Strengthen Measures and Legislation: Enact stronger laws to prevent the sourcing of goods and services associated with modern slavery.
  • Embed Anti-Slavery Measures in Climate Change Plans: Integrate anti-slavery efforts into sustainability plans, acknowledging the link between climate change and vulnerability to modern slavery.
  • Enhance Education and Tighten Regulations: Provide accessible education while tightening regulations on forced labor, child marriage, and exploitative practices.
  • Prioritize Rehabilitation and Support: Prioritize comprehensive support systems for the rehabilitation of bonded laborers, including financial aid, education, job security, and fair compensation.
  • Hold G20 Nations Accountable and Foster Cooperation: Ensure accountability among G20 nations and promote collaborative efforts to eliminate modern slavery.

 

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A Social Security Board for Gig Workers: Rajasthan’s Pioneering Step

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Gig economy, Platform-Based Gig Workers Welfare Board

Mains level: Gig economy, Rajasthan's Platform-Based Gig Workers Welfare Board, challenges and measures for implementation

Gig Workers

Central Idea

  • The Chief Minister of Rajasthan recently announced the establishment of India’s first welfare fund, the Rajasthan Platform-Based Gig Workers Social Security and Welfare Fund. This landmark move comes as a significant regulatory step to address the vulnerabilities faced by gig and platform workers since the passage of the Code on Social Security in 2020.

All you need to know about Platform-Based Gig Workers Social Security and Welfare Fund

  • Social security and welfare benefits to gig workers: It is the country’s first welfare fund specifically designed to address the social security needs of gig and platform workers established by the government of Rajasthan. The fund aims to provide social security benefits and welfare measures to gig workers who operate in the platform economy.
  • Set up in accordance with the Code on Social Security 2020: Code on Social Security recognizes the vulnerabilities faced by gig and platform workers and emphasizes the need for social security measures to protect their rights and well-being. The creation of the welfare fund aligns with the code’s objective of extending social security coverage to workers in the informal sector.
  • Operates as a tripartite institution: The Platform-Based Gig Workers Social Security and Welfare Fund operates as a tripartite institution, comprising representatives from the bureaucracy, employers or clients, and workers’ unions or associations. This structure enables the fund to effectively address the concerns and interests of all stakeholders involved.
  • Funding through revenue-sharing model: The Code on Social Security mandates that platform companies contribute 1%-2% of their revenue towards the fund, ensuring that the financial responsibility is shared between the platforms and the government.

Who are known as Gig Workers?

  • Gig workers are individuals who engage in temporary, flexible, and on-demand work arrangements, often facilitated through digital platforms or apps.
  • They are part of the gig economy, which is characterized by short-term and project-based work engagements rather than traditional long-term employment contracts.
  • Gig workers encompass a wide range of occupations and industries. They may include freelance writers, drivers for ride-hailing services, delivery personnel, online marketplace sellers, virtual assistants, graphic designers, and many others.
  • These workers typically operate as independent contractors, offering their services or completing tasks on a project-by-project basis.

Potential challenges in program implementation

  • Lack of Clarity in Definitions: The classification and definition of gig workers can vary, making it challenging to accurately identify and include all eligible individuals in the programs. Determining the scope and coverage of the programs can be complex, especially considering the diverse nature of gig work.
  • Funding Constraints: Allocating sufficient funds for the implementation of social security programs for gig workers can be a significant challenge. Adequate resources need to be allocated to ensure the sustainability of the programs and the provision of comprehensive benefits. Identifying the appropriate funding mechanisms, such as revenue-sharing models or contributions from platforms, can be complex and require careful consideration.
  • Limited Awareness and Outreach: Many gig workers may be unaware of their rights or the existence of social security programs available to them. Effective outreach and awareness campaigns are crucial to ensure that gig workers understand the benefits and are encouraged to participate. Language barriers, digital literacy issues, and the dispersed nature of gig workers can further complicate outreach efforts.
  • Adapting to Technological Platforms: Implementing social security programs within the digital platforms that facilitate gig work can pose technical challenges. Integration with existing platform systems, ensuring secure data management, and addressing potential privacy concerns require careful planning and coordination between government agencies and platform operators.
  • Addressing Cross-Jurisdictional Issues: Gig workers often operate across multiple jurisdictions, which can create complexities in program implementation. Coordination among different states or countries may be required to ensure seamless coverage and avoid gaps or duplications in benefits.
  • Establishing Fair Evaluation Criteria: Determining eligibility criteria and evaluating gig workers’ contributions or income can be challenging. Traditional methods of assessing employment status or income may not align with the dynamic and variable nature of gig work. Developing fair and transparent evaluation mechanisms is crucial to ensure that deserving gig workers receive the appropriate benefits.
  • Balancing Flexibility and Protection: Gig work is characterized by its flexibility, allowing workers to choose when and how much they work. Designing social security programs that provide necessary protections while still accommodating the flexible nature of gig work can be a delicate balance. Ensuring that gig workers can access benefits without compromising their work arrangements is essential.

Measures to overcome operational challenges

  • Comprehensive Outreach and Awareness Campaigns: Launch targeted and extensive awareness campaigns to inform gig workers about the available social security programs, their benefits, and the application process. Utilize multiple communication channels, including online platforms, mobile apps, social media, and community networks, to reach a wide range of gig workers.
  • Simplified Registration and Enrollment Processes: Streamline the registration and enrollment processes to make them user-friendly and accessible to gig workers. Utilize digital platforms and mobile applications to enable easy and convenient enrollment, reducing paperwork and administrative burdens.
  • Partnerships with Platforms: Collaborate with platform operators to facilitate program implementation. Platforms can play a crucial role in sharing information, reaching out to gig workers, and integrating social security features directly into their platforms. Establish clear guidelines and expectations for platform operators to ensure compliance and seamless integration of social security measures.
  • Tailored Benefit Packages: Design benefit packages that cater to the specific needs of gig workers. Consider their income volatility, irregular work schedules, and diverse occupational risks when determining the types of benefits to offer. Flexibility and customization in benefit packages can help address the unique challenges faced by gig workers.
  • Digital Solutions and Technology Integration: Leverage digital solutions and emerging technologies to streamline processes, enhance efficiency, and improve service delivery. Utilize digital platforms for benefits management, payment systems, and claims processing to ensure a seamless and user-friendly experience for gig workers.
  • Collaborative Governance: Establish tripartite partnerships involving government authorities, gig worker representatives, and platform operators to foster effective governance and decision-making. This collaborative approach ensures that the perspectives and interests of all stakeholders are taken into account and promotes transparency and accountability.
  • Continuous Monitoring and Evaluation: Implement robust monitoring and evaluation mechanisms to assess the effectiveness and impact of social security programs for gig workers. Regularly collect feedback from gig workers, platform operators, and other stakeholders to identify areas for improvement and make necessary adjustments to the programs.
  • International Collaboration and Knowledge Sharing: Engage in international collaboration and knowledge sharing to learn from best practices and experiences of other countries implementing social security measures for gig workers. Exchange ideas, strategies, and lessons learned to enhance program implementation and overcome operational challenges.

Facts for prelims

New classification by NITI Aayog: Platform vs. Non-platform Workers

  • The NITI Aayog report broadly classifies gig workers into platform and non-platform-based workers.
  • The consequent platformisation of work has given rise to a new classification of labour — platform labour — falling outside of the purview of the traditional dichotomy of formal and informal labour.
  • While platform workers are those whose work is based on online software applications or digital platforms.
  • Non-platform gig workers are generally casual wage workers and own-account workers in the conventional sectors, working part-time or full time.

 Conclusion

  • The establishment of the Rajasthan Platform-Based Gig Workers Welfare Board represents a significant victory for platform workers and unions who have long advocated for their rights. While many states are yet to take action, Rajasthan sets an example by prioritizing the welfare of these workers, especially with assembly elections looming next year.

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May Day and the Challenge of Regulating Working Hours

Note4Students

From UPSC perspective, the following things are important :

Prelims level: labour day and international and national labour laws

Mains level: labour rights, issues over increasing working hours and labour laws

May Day

Central Idea

  • May 1st commemorates the historic Haymarket Square affair and is celebrated globally as International Labour Day or May Day. The day holds immense significance as it signifies the struggle of workers to secure their rights. However, the idea of reducing working hours to improve social welfare is still a dream for many in India, despite it being adopted by several countries. Instead, we see a growing trend of increasing working hours, especially in the garment and electronic industries, in the name of increasing productivity.

Significances of International Labour Day

  • Honouring the labour movement: International Labour Day is an occasion to pay tribute to the labour movement and honour the contributions of workers worldwide.
  • Celebrating the rights of workers: The day is an opportunity to celebrate the hard-won rights of workers, including the right to fair wages, safe working conditions, and the right to form unions.
  • Advocating for workers’ rights: International Labour Day is also a platform to raise awareness about the need to protect and advocate for workers’ rights, particularly in countries where labour laws are weak or not enforced.
  • Recognizing the role of labour unions: Labour unions have played a significant role in securing better working conditions and benefits for workers. On International Labour Day, the contributions of labour unions are recognized and celebrated.
  • Promoting social justice: The day promotes social justice by advocating for fair treatment of workers, regardless of their gender, race, or other factors that may lead to discrimination or exploitation.
  • Remembrance of struggles: International Labour Day is also an opportunity to remember the struggles of workers in the past and the sacrifices made by those who fought for workers’ rights.
  • Building solidarity among workers: The day fosters a sense of solidarity among workers, encouraging them to come together to promote their rights and advocate for better working conditions.

May Day

What are the reasons behind growing trend of increasing working hours?

  • Global competition: Companies feel pressure to work longer hours to keep up with international competition and maintain their market share.
  • Cost-cutting: Employers may increase working hours to cut costs and boost productivity, rather than hiring more workers.
  • Increased demand: As demand for goods and services grows, companies may feel the need to work longer hours to meet that demand.
  • Technology: Advances in technology have made it easier to work remotely, leading to an expectation of being available and connected 24/7.
  • Flexibility: Employers may offer more flexible schedules, but with the expectation of working longer hours to complete tasks.
  • Emphasis on economic growth: Mainstream economists prioritize economic growth, even if it is at the expense of labor rights and human rights. They believe that working longer hours and increasing exports will lead to economic growth.
  • Subsidies and exemptions: Regional governments offer subsidies and exemptions to attract global and domestic capital, and employers may prefer weaker unions in exchange for these incentives.

May Day

Facts for prelims

International Labour Day

  • International Labour Day, also known as May Day, originated in the United States in the late 19th century when labor unions and socialist movements organized demonstrations and strikes calling for better working conditions, higher wages, and an eight-hour workday.
  • On May 1, 1886, workers in Chicago organized a massive protest rally, and the following days were marked by violent clashes between police and protesters.
  • In 1889, the International Socialist Conference declared May 1 as International Workers’ Day to commemorate the Chicago protests and honor workers around the world. Since then, May Day has been celebrated globally as a day to recognize the contributions of workers and to advocate for their rights and fair treatment.

Maharashtra day

  • May 1 is celebrated as Maharashtra Day to commemorate the formation of the state of Maharashtra.
  • On May 1, 1960, the Bombay Reorganization Act came into effect, and the state of Maharashtra and Gujarat were formed. Hence, May 1 is celebrated as Maharashtra Day in Maharashtra, India.
  • It is a public holiday in the state, and various cultural events and parades are held to mark the occasion.

What are the concerns over increasing working hours?

  • Adversely Affecting Health: Extending working hours can lead to physical and mental fatigue, stress, and burnout, which can affect the health of the workers. This, in turn, can lead to an increase in absenteeism, accidents, and medical costs.
  • Diminishing Marginal Productivity: As the hours of work increase, the efficiency and productivity of the worker may decrease, leading to a decline in the quality of output. It can also lead to a decrease in the quality of life of the workers, as they have less time for family and leisure activities.
  • Violation of Labour Rights: Increasing working hours can be a violation of the fundamental rights of the workers, as it denies them the right to rest and leisure, which are essential for the physical and mental well-being of the workers.
  • Job Insecurity: Increasing working hours can lead to job insecurity as employers may replace workers with automation or outsourcing to cut costs. It can also lead to a decline in wages, as employers may argue that they are paying for more working hours.
  • Adverse Impact on Women Workers: Increasing working hours can disproportionately affect women workers, who may be responsible for domestic chores and childcare. Long working hours can lead to a decline in their physical and mental health and an increase in their workload, which can have an adverse impact on their family life.

May Day

Why it is necessary to regulate working hours?

  • Protecting workers’ health: Working long hours can have adverse effects on workers’ physical and mental health. It can lead to fatigue, stress, sleep disorders, and other health issues.
  • Ensuring safety at the workplace: Workers who are overworked may become fatigued, which can increase the risk of accidents and injuries at the workplace. Regulating working hours can help ensure a safe and healthy work environment.
  • Promoting work-life balance: Long working hours can negatively impact workers’ personal lives, reducing their time with family and friends, and limiting their ability to engage in other activities outside of work. Regulating working hours can help promote a healthy work-life balance.
  • Enhancing productivity: Research has shown that working long hours can lead to a decline in productivity and an increase in errors and accidents. By regulating working hours, employers can ensure that workers are well-rested and productive.
  • Protecting workers’ rights: Regulating working hours is an essential component of protecting workers’ rights. It helps to prevent exploitation and ensures that workers are compensated fairly for their time and labor.

Conclusion

  • May Day serves as a reminder of the struggle of workers for their rights. In this context, India must prioritize the welfare of its labour force and regulate working hours to improve their social welfare. The government must ensure that labour laws are not weakened, and trade unions must unite to ensure that the rights of workers are protected. Multinational corporations must be held accountable for skilling their workers and not exploiting the cheap labour offered by developing countries. Only then can India move towards inclusive and sustainable development.

Mains Question

Q. There is a growing trend of increasing working hours, especially in the garment and electronic industries, in the name of increasing productivity. Discuss the reasons and discuss why it is necessary to regulate working hours?

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Also read:

Why May 1 is observed as Labour Day?

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South Asia Need to Invest In Human Capital

Note4Students

From UPSC perspective, the following things are important :

Prelims level: South Asian region

Mains level: South Asia, Human capital, economic growth and challenges

South Asia

Central Idea

  • The last few years have ushered in a harsh new reality where crises are the norm rather than the exception. Pandemics, economic slumps and extreme weather events were once tail-end risks, but all three have hit South Asia in rapid succession since 2020.  To strengthen resilience and protect the well-being of future generations, governments across South Asia need to take urgent policy action and invest in human capital.

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South Asia Overview

  • Countries: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.
  • Population: The region has a total population of over 1.8 billion people, making it the most populous region in the world.
  • Geography: South Asia has a diverse geography, with mountain ranges such as the Himalayas and Hindu Kush, major rivers like the Ganges, Indus, and Brahmaputra, and coastal areas along the Arabian Sea, Bay of Bengal, and Indian Ocean.
  • Economy: India is the largest economy in the region, accounting for more than 70% of the region’s total GDP. Agriculture is a major employer in most countries, with rice and wheat being staple crops. The manufacturing sector is also a significant contributor to the region’s economy, with textiles, garments, and leather products being major exports
  • Climate: The climate of South Asia is varied, with the monsoon season bringing heavy rainfall to much of the region and causing flooding in some areas. The region’s geography and size also result in varying climate patterns. In general, the region experiences hot and humid summers and mild winters.
  • Climate Change Risks: Climate change poses significant risks to the region, with some areas, such as the Maldives, at risk of sea level rise. Other risks include increased frequency and severity of extreme weather events, such as floods and droughts. The region is also vulnerable to the impacts of climate change on health, including increased incidence of heat-related illness and infectious diseases.
  • Biodiversity and Environmental Threats:
  • South Asia is home to several biodiversity hotspots, such as the Western Ghats in India and the Eastern Himalayas.
  • However, the region faces significant environmental threats, such as deforestation, air and water pollution, and climate change.
  • Deforestation is a major problem in the region, with logging and land use change leading to habitat destruction and loss of biodiversity.

South Asia

An underutilized asset of South Asia: Analysis

  • South Asia’s people are its biggest asset but remain wastefully underutilized:
  • With nearly half its population under the age of 24 and over one million young people set to enter the labour force every month until 2030, the region could reap an enviably high demographic dividend.
  • Stunting one of the significant challenges: South Asia is also home to over one third of the world’s stunted children. And a child born in the region today can, by the age of 18, expect to attain only 48% of their full productive potential.
  • Governments spending on Health and education: South Asian governments on average spend just 1% of GDP on health and 2.5% on education. In comparison, the global average is 5.9% on health and 3.7% on education.
  • COVID-19 pandemic, a blow to regions human capital: The COVID-19 pandemic, which pushed an additional 35 million people across South Asia into extreme poverty, dealt an unprecedented blow to the region’s human capital. Among its most woeful impacts is a rise in learning poverty, or the inability to read and understand a simple text by age 10. Ineffective remote instruction, during the pandemic increased South Asia’s learning poverty from 60% to 78%.
  • The poorest and most vulnerable people fell further behind: For example, in Bangladesh, the poorest students lost 50% more in terms of learning than the richest students. Several countries still show little to no signs of recovery, and South Asia’s students could lose up to 14.4% of their future earnings.

Interventions that can make a difference

  • Affordable education: Recent evidence suggests that even simple and low-cost education programmes can lead to sizable gains in skills.
  • For instance:
  • In Bangladesh attending a year of additional pre-school through two-hour sessions significantly improved literacy, numeracy, and social-development scores.
  • In Tamil Nadu, six months of extra remedial classes after school helped students catch up on about two-thirds of lost learning linked to 18 months of school closures.
  • In Nepal, government teachers ran a phone tutoring programme that helped increase students’ foundational numeracy by 30%.
  • Robust systems for crisis management: The need for countries to have robust systems in place to support individuals and families during times of crisis. Such systems, which can include social safety nets, health care, and education programs, can help to mitigate the impact of crises like the pandemic, protect vulnerable populations, and promote resilience. By investing in these systems before a crisis strikes, countries can better prepare themselves to respond to the challenges that may arise.
  • Use data and technology: Effective systems are needed to respond to crises quickly and maintain vital services like healthcare and education. Coordination across sectors is important. Data and technology play a crucial role in the delivery of services, human development systems should ensure they are effectively used.

South Asia

World Bank study: Interdependence of health, education and skills for human development

  • A new World Bank study, Collapse and Recovery: how COVID eroded human capital and what to do about it, analyses the pandemic’s impacts on young people, stresses the multi-dimensional and complementary nature of human development.
  • The health, education, and skills people acquire at various stages of their lives, build and depend on each other.
  • To be effective, human development systems must recognise and exploit these overlapping connections. In other words, they should be agile, resilient and adaptive.

Conclusion

  • The road ahead for South Asia is rocky. The next crisis may be just around the corner. A robust human development system would not only mitigate the damage but also help ensure lives and livelihoods are protected. It could provide the resilience South Asia needs to prosper in an increasingly volatile world. While the outlook is grim, it is important to remember that well-designed and implemented interventions can make a difference if governments act fast.

Mains question

Q. South Asia possesses remarkable human capital, but it remains underutilized and has been further impacted by the COVID-19 pandemic. Discuss and suggest what can be done to address the issues?

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Private: Testing CTA Designs

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: 4-day work week, advantages and disadvantages

Testing…

  • Much is being made about the major breakthrough in one of the largest-ever experiments with a four-day workweek in Britain. Sixty-one companies were part of the six-month trial and 56 of them have opted to continue with the program, while 18 have made it permanent. 4 Day Week Global trial, overseen by Autonomy, aimed to improve work-life balance by allowing workers to work four days instead of five with the same salary and workload.

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Rest of the Content –

  • Improved Work-life balance: Having a positive work-life balance can also allow professionals to adopt a better attitude about their work, as they can return to their jobs well-rested. This can help employees remain productive and enthusiastic while working.
  • Increased job satisfaction: With more free time, employees may feel more satisfied with their jobs and be more engaged at work.
  • Reduced absenteeism and turnover: Offering a four-day workweek could make companies more attractive to potential employees, and employees may be less likely to miss work or leave their jobs if they have a better work-life balance.
  • Increased productivity: Some studies have shown that shorter workweeks can actually boost productivity, as employees may be more focused and efficient during their work hours.
  • Positive environmental impact: Working four days per week decreases the number of times a professional commute to work. This is helpful to the environment, as most vehicles produce emissions that can harm the environment.

Four-day workweek

Potential disadvantages

  • Limited impact: The benefits of a four-day workweek may be limited in certain industries or job types, such as those that require shift work or have strict deadlines.
  • Increased workload: Employees may feel pressure to complete the same amount of work in fewer hours, resulting in an increased workload and potential burnout.
  • Reduced productivity: Some employees may find it difficult to maintain focus and productivity over longer workdays. This could lead to a decrease in overall output and quality of work.
  • Impact on customer service: If businesses are closed for an extra day each week, it may be more difficult to provide customer service or maintain consistent operating hours.
  • Reduced income: With a shorter workweek, employees may see a reduction in their pay, which could be a disadvantage for those who rely on their income to cover living expenses.

Examples of companies/organizations considering a four-day workweek

  • Microsoft Japan: In 2019, the tech giant conducted a trial where employees worked a four-day week and saw a 40% increase in productivity.
  • Iceland: A number of companies and organizations in Iceland have experimented with shorter workweeks, including the country’s government, which is exploring a four-day workweek for public servants.
  • New Zealand: Unilever New Zealand recently announced it would be trialing a four-day workweek for all of its employees, while the country’s prime minister, Jacinda Ardern, has previously spoken in favor of the idea.
  • Spain: The government of Spain has proposed a three-year trial of a four-day workweek, with the goal of improving work-life balance and boosting productivity.

Four-day workweek

Feasibility of Four-day workweek in India’s context

  • Will require a careful analysis: The feasibility and impact of a four-day workweek in India would depend on various factors such as industry type, workforce demographics, and cultural norms. Implementing a four-day workweek in India would require careful analysis of various factors.
  • For instance: With the rise of remote work and the increased focus on work-life balance four day week option could be helpful to enhance productivity with improved work life balance in corporate sector.
  • Complex regulations: India’s labour laws and regulations are complex and provide significant protections for workers. Any changes to work arrangements, including a four-day workweek, would need to comply with these laws and ensure that employees’ rights and benefits are protected.
  • For example: Any reduction in working hours would need to be accompanied by appropriate compensation and benefits to ensure that employees do not suffer financial losses.
  • Specific needs of industries: The feasibility of a four-day workweek would depend on the specific needs of different industries.
  • For instance: While some knowledge-based sectors may be well-suited to a four-day workweek, industries that require continuous operations or shift work, such as manufacturing or healthcare, may face significant challenges in implementing a shorter workweek.

Conclusion

  • It’s important to carefully consider the potential advantages and disadvantages of a four-day workweek before implementing it in any workplace. The impact may vary depending on the specific work arrangements and the needs of the employees and customers.

Mains question

Q. Four days work week resurfaces in the public discussion again and again. In this light analyze the feasibility of four day work week.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Four-day workweek: Analysis

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: 4-day work week, advantages and disadvantages

Four-day workweek

Central Idea

  • Much is being made about the major breakthrough in one of the largest-ever experiments with a four-day workweek in Britain. Sixty-one companies were part of the six-month trial and 56 of them have opted to continue with the program, while 18 have made it permanent. 4 Day Week Global trial, overseen by Autonomy, aimed to improve work-life balance by allowing workers to work four days instead of five with the same salary and workload.

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Advantages of implementing a four-day workweek

  • Improved Work-life balance: Having a positive work-life balance can also allow professionals to adopt a better attitude about their work, as they can return to their jobs well-rested. This can help employees remain productive and enthusiastic while working.
  • Increased job satisfaction: With more free time, employees may feel more satisfied with their jobs and be more engaged at work.
  • Reduced absenteeism and turnover: Offering a four-day workweek could make companies more attractive to potential employees, and employees may be less likely to miss work or leave their jobs if they have a better work-life balance.
  • Increased productivity: Some studies have shown that shorter workweeks can actually boost productivity, as employees may be more focused and efficient during their work hours.
  • Positive environmental impact: Working four days per week decreases the number of times a professional commute to work. This is helpful to the environment, as most vehicles produce emissions that can harm the environment.

Four-day workweek

Potential disadvantages

  • Limited impact: The benefits of a four-day workweek may be limited in certain industries or job types, such as those that require shift work or have strict deadlines.
  • Increased workload: Employees may feel pressure to complete the same amount of work in fewer hours, resulting in an increased workload and potential burnout.
  • Reduced productivity: Some employees may find it difficult to maintain focus and productivity over longer workdays. This could lead to a decrease in overall output and quality of work.
  • Impact on customer service: If businesses are closed for an extra day each week, it may be more difficult to provide customer service or maintain consistent operating hours.
  • Reduced income: With a shorter workweek, employees may see a reduction in their pay, which could be a disadvantage for those who rely on their income to cover living expenses.

Examples of companies/organizations considering a four-day workweek

  • Microsoft Japan: In 2019, the tech giant conducted a trial where employees worked a four-day week and saw a 40% increase in productivity.
  • Iceland: A number of companies and organizations in Iceland have experimented with shorter workweeks, including the country’s government, which is exploring a four-day workweek for public servants.
  • New Zealand: Unilever New Zealand recently announced it would be trialing a four-day workweek for all of its employees, while the country’s prime minister, Jacinda Ardern, has previously spoken in favor of the idea.
  • Spain: The government of Spain has proposed a three-year trial of a four-day workweek, with the goal of improving work-life balance and boosting productivity.

Four-day workweek

Feasibility of Four-day workweek in India’s context

  • Will require a careful analysis: The feasibility and impact of a four-day workweek in India would depend on various factors such as industry type, workforce demographics, and cultural norms. Implementing a four-day workweek in India would require careful analysis of various factors.
  • For instance: With the rise of remote work and the increased focus on work-life balance four day week option could be helpful to enhance productivity with improved work life balance in corporate sector.
  • Complex regulations: India’s labour laws and regulations are complex and provide significant protections for workers. Any changes to work arrangements, including a four-day workweek, would need to comply with these laws and ensure that employees’ rights and benefits are protected.
  • For example: Any reduction in working hours would need to be accompanied by appropriate compensation and benefits to ensure that employees do not suffer financial losses.
  • Specific needs of industries: The feasibility of a four-day workweek would depend on the specific needs of different industries.
  • For instance: While some knowledge-based sectors may be well-suited to a four-day workweek, industries that require continuous operations or shift work, such as manufacturing or healthcare, may face significant challenges in implementing a shorter workweek.

Conclusion

  • It’s important to carefully consider the potential advantages and disadvantages of a four-day workweek before implementing it in any workplace. The impact may vary depending on the specific work arrangements and the needs of the employees and customers.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Singapore Declaration of ILO

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Singapore Declaration

Mains level: Labour reform

CONTEXT: The 17th Asia-Pacific Regional Meeting of the International Labour Organisation (ILO) set ten-point priorities of national action under the Singapore Declaration.

Singapore Declaration

  • It seeks to draw attention for the member countries to deal with the issue of dwindling wages of workers, inflation and unemployment.
  • It was adopted by the delegates representing governments, employers and workers’ governments, employers and workers in the regions.
  • Members agreed that social dialogue is essential to address labour market challenges and finding solutions in crisis situations such as the COVID-19 pandemic, natural disasters, and economic uncertainty.

Key point priorities

  1. Ensure labour protection for all through the promotion of freedom of association
  2. Recognition of the right to collective bargaining, including for workers in vulnerable situations and workers in the informal economy, as enabling rights for decent work
  3. Closing gender gaps, increase women’s labour force participation, promote equal pay for work of equal value, balance work and responsibilities, and promoting women’s leadership.
  4. Develop and implement inclusive labour market programmes and policies that support life transitions and demographic shifts.
  5. Pursue collective and determined efforts to promote and accelerate a smooth and sustained transition from the informal to formal economy
  6. Strengthen governance frameworks and respect for freedom of association for migrant workers
  7. Strengthen the foundation for social and employment protection and resilience
  8. Expanding social protection to all workers, guaranteeing universal access to comprehensive, adequate and sustainable social protection for all

 

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Delhi HC fumes over Compensation delay to kin of sewer death victims

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Plight of sanitation workers in India

sanitation

“My head hangs in shame,” said the Chief Justice of Delhi High Court while condemning the Delhi Development Authority (DDA) for not paying ₹10 lakh each as compensation to the family of person who died after inhaling toxic gases inside a sewer.

Why such criticism by the Delhi HC?

  • Cleaning of sewers and septic tanks has led to at least 351 deaths since 2017.

Manual sanitary works in India

  • Manual scavenging is the practice of removing human excreta by hand from sewers or septic tanks.
  • India banned the practice under the Prohibition of Employment as Manual Scavengers and their Rehabilitation Act, 2013 (PEMSR).
  • The Act bans the use of any individual for manually cleaning, carrying, disposing of or otherwise handling in any manner, human excreta till its disposal.
  • In 2013, the definition of manual scavengers was also broadened to include people employed to clean septic tanks, ditches, or railway tracks.
  • The Act recognizes manual scavenging as a “dehumanizing practice,” and cites a need to “correct the historical injustice and indignity suffered by the manual scavengers.”

Why is it still prevalent in India?

  • Low awareness: Manual scavenging is mostly done by the marginalized section of the society and they are generally not aware about their rights.
  • Enforcement issues: The lack of enforcement of the Act and exploitation of unskilled labourers are the reasons why the practice is still prevalent in India.
  • High cost of automated: The Mumbai civic body charges anywhere between Rs 20,000 and Rs 30,000 to clean septic tanks.
  • Cheaper availability: The unskilled labourers, meanwhile, are much cheaper to hire and contractors illegally employ them at a daily wage of Rs 300-500.
  • Caste dynamics: Caste hierarchy still exists and it reinforces the caste’s relation with occupation. Almost all the manual scavengers belong to lower castes.

Various policy initiatives

  • Prohibition of Employment as Manual Scavengers and their Rehabilitation (Amendment) Bill, 2020: It proposes to completely mechanise sewer cleaning, introduce ways for ‘on-site’ protection and provide compensation to manual scavengers in case of sewer deaths.
  • Prohibition of Employment as Manual Scavengers and their Rehabilitation Act, 2013: Superseding the 1993 Act, the 2013 Act goes beyond prohibitions on dry latrines, and outlaws all manual excrement cleaning of insanitary latrines, open drains, or pits.
  • Rashtriya Garima Abhiyan: It started national wide march “Maila Mukti Yatra” for total eradication of manual scavenging from 30th November 2012 from Bhopal.
  • Prevention of Atrocities Act: In 1989, the Prevention of Atrocities Act became an integrated guard for sanitation workers since majority of the manual scavengers belonged to the Scheduled Caste.
  • Compensation: As per the Prohibition of Employment of Manual Scavengers and their Rehabilitation (PEMSR) Act, 2013 and the Supreme Court’s decision in the Safai Karamchari Andolan vs Union of India case, a compensation of Rs 10 lakh is awarded to the victims family.
  • National Commission for Safai Karamcharis (NCSK): It is currently a temporary non-statutory body that investigates the conditions of Safai Karamcharis (waste collectors) in India and makes recommendations to the Government.

 Other initiatives for sanitation workers

  • The ministry now has proper distinction between sanitation work and manual scavenging.
  • The practice of manual scavenging no longer takes place in the country as all manual scavengers had been accounted for and enrolled into the rehabilitation scheme, said the ministry.
  • The enumeration of sanitization workers is soon to be conducted across 500 AMRUT (Atal Mission for Rejuvenation and Urban Transformation) cities, as a part of National Action Plan for Mechanised Sanitation Ecosystem (NAMASTE).
  • The NAMASTE scheme aims to eradicate unsafe sewer and septic tank cleaning practices.

Way forward

  • Regular surveys and social audits must be conducted against the involvement of manual scavengers by public and local authorities.
  • There must be proper identification and capacity building of manual scavengers for alternate sources of livelihood.
  • Creating awareness about the legal protection of manual scavengers is necessary.

 

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Moonlighting: Overemployment or Underpayment

Note4Students

From UPSC perspective, the following things are important :

Prelims level: what is moonlighting.

Mains level: Impact of moonlighting on comapnies and employment.

MoonlightingContext

  • In July, Kotak Securities said in a study that at least 60% of 400 employees surveyed said they themselves had, or knew someone who had engaged in moonlighting.

What is mean by moonlighting?

  • Moonlighting is a state where employees work for remuneration with entities other than their employers. It is not defined in any of the statutes in India. However, there are enactments that deal with double employment.

MoonlightingHow does it affect companies and what are latest examples?

  • Wipro: According to Wipro CEO, there is a lot of chatter about people moonlighting in the tech industry. This is cheating plain and simple. The company sacked 300 employees following the discovery that they were working for rival firms on the side, leading to conflict of interest.
  • Infosys: Infosys has warned staff against moonlighting, saying it could lead to termination.
  • Effect of WFH: Another software firm DXC Technologies said that moonlighting by employees was a challenge for employers but that wouldn’t affect its WFH (work from home) policy that has worked well for both the firm and its staff.
  • Moonlighting policy: Swiggy announced a moonlighting policy’ that allows employees to pursue their passion for economic interests alongside their fulltime employment.”

MoonlightingWhat is the Legal status of moonlighting?

  • Factory act: Section 60 of the Factories Act deals with restriction on double employment stating that “No adult worker shall be required or allowed to work in any factory on any day on which he has already been working in any other factory, save in such circumstances as may be prescribed. However, this enactment is applicable only to employees working in factories.
  • The Tamil Nadu Shops & Establishments Act, 1947: There are State enactments which deal with employment of persons working in offices, banks, shops, etc. In Tamil Nadu, it is termed as The Tamil Nadu Shops & Establishments Act, 1947. However, there is no provision wherein dealing with dual employment.
  • Glaxo Laboratories (I) Limited vs Labour Court, Meerut and others: The apex court held that “The employer has hardly any extra territorial jurisdiction. He is not the custodian of general law and order situation or the Guru or mentor of his workmen for their well-regulated cultural advancement. If the power to regulate the behaviour of the workmen outside the duty hours and at any place wherever they may be was conferred upon the employer, contract of service may be reduced to contract of slavery.” This case was not specifically about moonlighting but the court’s observation gives us an idea as to how the law may view such cases.

MoonlightingWay forward

  • More earning: The Minister of State for Skill Development and Entrepreneurship, and Electronics and IT, said that employers should not to suppress employees who want to monetise, develop and demonstrate but also urged employees not to violate their agreements with employers.
  • Working hours: Moonlighting is subject to law of the land. The sphere of employment cannot be extended by the employer beyond working hours and outside his place of employment.
  • Socialistic view: The Courts of law in India dealing with employment are Writ Courts and Labour Courts, which exercise jurisdiction based on equity or fairness. Therefore, the Courts may lean in favour of the employee unless the contravention of the employee has led to serious prejudice and loss to the employer

Conclusion

  • Employees are not the slaves of employers. What they do beyond the working hours is none of the business of employer unless it affects company financially or causes substantial damage to business. Government should bring the legal statute to regulate moonlighting and prevent the unjustified punishment of employees.

Mains Question

Q. What is moonlighting? Why employees do moonlighting? Discuss the legal framework about moonlighting in India.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Labour Codes

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Labour codes

Mains level: Not Much

Addressing to the National Labour Conference, Prime Minister said that the Centre had taken initiatives to abolish laws from “the period of slavery” that reflected a slavery mentality through the Labour Codes.

New Labour Codes

The four codes likely to be implemented in FY23 are:

  1. Code on Wages
  2. Industrial Relations Code
  3. Social Security Code, and
  4. Occupational Safety, Health and Working Conditions Code

Objectives of the Labour Code

  • The new labor codes are aimed at facilitating ease of doing business in the country and seek to replace 29 cumbersome laws.
  • The objective is to encompass over 500 million organized and unorganized sector workers—90% of the workforce which has been outside labour laws.
  • The idea is to ensure that they receive wage security, social security and health security, gender equality in terms of remuneration, a minimum floor wage, make the lives of inter-state migrant workers easier.

What is the current status of the codes?

  • The central government has completed the process of finalizing the draft rules, state governments are in the process of drafting the same.
  • With labor being a concurrent subject, states are in the process of pre-publishing draft rules for these reforms.

How many labour laws do Indian states have?

  • The simplification of 29 labour laws into the four labour codes is expected be a watershed moment for labour reforms.
  • India currently has a web of multiple labour legislations, over 40 central laws and 100 state laws involving labour.
  • The Second National Commission on Labour (2002) recommended simplification to bring about transparency and uniformity.

What are the major reforms in these codes?

  • Social security benefits: With organized sector workers being approximately 10% of the total workforce, the new codes may ensure that social security benefits are for all.
  • Take-home salary: As per the proposed labour codes, total allowances such as house rent, leave, travel etc. are to be capped at 50% of the salary, while basic pay should account for the remaining 50%.
  • Four days work: There could also be a permissible four-day work week of 12 hours per day.

How will it affect ease of doing business?

  • Labour productivity: It is likely to improve with both employees and employers developing a sense of being partners in wealth creation.
  • Labour reform: A transparent environment in terms of workers’ compensation, clear definition of employee rights and employer duties.
  • Compliance un-burdening: Simplified labour codes making compliance easier are likely to attract investments.
  • Formalization of the economy: With more workers in the organized sector, leakage in terms of direct as well as indirect taxes may be plugged.

Also read

[Burning Issue] New Labour Laws

 

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Labour policies need to change for better quality livelihoods

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Universal basic income.

Mains level: Social security ,Inclusive growth.

Context

  • One of the biggest economic fallout of the pandemic has been the deteriorating labour market conditions.
  • Given the ebb and flow of the pandemic, the growth recovery is likely to be fragmented and will weigh on the number and types of jobs available.

What is quality and sustainable livelihood?

  • “A livelihood comprises the capabilities, assets and activities required for a means of living. A livelihood is sustainable when it can cope with and recover from stresses and shocks and maintain or enhance its capabilities and assets both now and in the future, while not undermining the natural resource base.’’

Sustainable livelihoods objectives

  • improved access to high-quality education, information, technologies and training and better nutrition and health;
  • a more supportive and cohesive social environment;
  • more secure access to, and better management of, natural resources;

Definition of labour welfare

  • Labour welfare relates to taking care of the well-being of workers by employers, trade unions, governmental and non-governmental institutions and agencies.
  • Welfare includes anything that is done for the comfort and improvement of employees and is provided over and above the wages.

Why labour law is needed

  • Labour law aims to correct the imbalance of power between the worker and the employer; to prevent the employer from dismissing the worker without good cause; to set up and preserve the processes by which workers are recognized as ‘equal’ partners in negotiations about their working conditions etc.

Constitutional mandate

  • Article 41 – The state shall within the limits of its economic capacity and development make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement and in other cases of underserved want.
  • Article 42 – The state shall make provision for securing just and humane conditions of work and for maternity relief.

Challenges in labour welfare in India

  • Technical glitches: Under the Constitution of India, Labour is a subject in the concurrent list where both the Central and State Governments are competent to enact legislations. As a result, a large number of labour laws have been enacted catering to different aspects of labour e.g. occupational health, safety, employment etc.
  • Loopholes: Because of the predominantly heavy handed labour regulations (also called as Inspector Raj) with exploitable gaps, the MNCs and domestic organizations have resorted to alternate ways i.e. employing contract labour at less than half the payroll of a permanent employee.
  • Gaps in labour laws: One of the main reasons for labour reforms is the concept of contract labour. Trade Unions suggest that this concept itself should be removed. There is stringent hiring and firing process defined in Industry Disputes Act. It makes it mandatory for the organization to seek Government permission before removing an employee.

Global best practices  

  • Universal basic income pilot project: For two years Finland’s government gave 2,000 unemployed citizens €560 a month with no strings attached. It was the first nationwide basic income experiment. The concept is slowly becoming difficult for people to ignore.

How will dynamic policies and labour codes respond?

  • Labour productivity: It is likely to improve with both employees and employers developing a sense of being partners in wealth creation.
  • Labour reform: A transparent environment in terms of workers’ compensation, clear definition of employee rights and employer duties.
  • Compliance un-burdening: Simplified labour codes making compliance easier are likely to attract investments.
  • Formalization of the economy: With more workers in the organized sector, leakage in terms of direct as well as indirect taxes may be plugged.

Conclusion

  • The guiding principle for India’s labour policy reformers should not merely be ring fencing jobs but safeguarding workers through social assistance, re-employment support (such as that which is provided in several Western nations) and skill building, and supporting employers in employee training and development.

Mains question

Q. Why there is need to make labour policies more dynamic? Do you think universal basic income approach will be the best way forward for achieving quality livelihood?

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Labour welfare necessity

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Labour welfare initiatives

Context

  • One of the biggest economic fallout of the pandemic has been the deteriorating labour market conditions.
  • In the years ahead when the health crisis subsides and the economy witnesses a rebound, the healing of the labour market may take some more time. This is because the impact of recovery on this market is always felt with a lag.
  • Given the ebb and flow of the pandemic, the growth recovery is likely to be fragmented and will weigh on the number and types of jobs available.

Definition

  • Labour welfare relates to taking care of the well-being of workers by employers, trade unions, governmental and non-governmental institutions and agencies.
  • Welfare includes anything that is done for the comfort and improvement of employees and is provided over and above the wages.

What are labour rights?

  • Labour rights or workers’ rights are both legal rights and human rights relating to labour relations between workers and employers. These rights are codified in national and international labour and employment law. In general, these rights influence working conditions in relations of employment.

Why labour law is needed

  • Labour law aims to correct the imbalance of power between the worker and the employer; to prevent the employer from dismissing the worker without good cause; to set up and preserve the processes by which workers are recognized as ‘equal’ partners in negotiations about their working conditions etc.

Constitutional mandate

  • Article 41 – The state shall within the limits of its economic capacity and development make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement and in other cases of underserved want.
  • Article 42 – The state shall make provision for securing just and humane conditions of work and for maternity relief.

Necessity for welfare

  • There were only 25 million during the initial period of industrial growth, while the strength of the workers is increasing year after year and hence, need for a mechanism to look into the welfare of the labour.
  • Workers put in long hours of work in unhealthy surrounding and the drudgery of the factory work continues to have adverse effect. To counter these welfare measures were felt necessary.
  • As a result of hardwork, they fall prey to alchoholism, gambling and other immoral activities results in absenteeism and other problems in the organisation. Hence the need was felt.

Scope for labour welfare in India

  • Contribute to the productivity of labour and efficiency of the enterprise.
  • Raise the standard of living of workers by indirectly reducing the burden on their purse.
  • Be in tune and harmony with similar services obtaining in a neighbouring community where an enterprise is situated.
  • Be based on an intelligent prediction of the future needs of industrial work and be so designed as to offer a cushion to absorb the shock of industrialization and urbanization
  • Be administratively viable and essentially development in outlook.

Government steps in this direction

  • Social Security Measures: The social security measures would help man to face the contingencies as such it is difficult for him either to work or to get work and support himself and his family. Thus social security measure provides a self balancing social insurance or assistance from public funds.
  • Social Insurance: is described as the giving in return for contribution, benefits up to subsistence level, as of right and without a means test, so that an individual may build freely upon it.
  • Social Assistance: is provided as an supplement to social insurance for those needy persons who cannot get social insurance payments and is offered after a means test.
  • Public Service: is a programme constituting the third main type of social security. They are financed directly by the government from its general revenues in form of cash payments or services to every member of the community falling within a defined category.

Case study of Finland

  • Universal basic income pilot project: For two years Finland’s government gave 2,000 unemployed citizens €560 a month with no strings attached. It was the first nationwide basic income experiment. The concept is slowly becoming difficult for people to ignore.

Challenges in labour welfare in India

  • Technical glitches: Under the Constitution of India, Labour is a subject in the concurrent list where both the Central and State Governments are competent to enact legislation. As a result, a large number of labour laws have been enacted catering to different aspects of labour e.g. occupational health, safety, employment etc.
  • Loopholes: Because of the predominantly heavy-handed labour regulations (also called as Inspector Raj) with exploitable gaps, the MNCs and domestic organizations have resorted to alternate ways i.e. employing contract labour at less than half the payroll of a permanent employee.
  • Gaps in labour laws: One of the main reasons for labour reforms is the concept of contract labour. Trade Unions suggest that this concept itself should be removed. There is stringent hiring and firing process defined in Industry Disputes Act. It makes it mandatory for the organization to seek Government permission before removing an employee.

Conclusion

  • Labour Welfare helps labourers improve their working conditions, providing social security and raising their standard of living.
  • Raise the employee’s morale use the workforce more effectively besides removing dissatisfaction help to develop loyalty in workers towards the organization.

Mains question

Q.What is labour welfare according to you? Why it is needed? Explain the challenges in front of Indian labour reforms.

 

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

India’s gig workforce to reach 2.35 Cr by 2030: NITI Aayog

Note4Students

From UPSC perspective, the following things are important :

Prelims level: NA

Mains level: Regulation of Gig Economy

A NITI Aayog report has identified that is expected to grow to 2.35 crore by 2029-30.

Do you know?

According to a study released by NITI Aayog, the number of gig workers in India is estimated to be 77 lakh in 2020-21. Isn’t it too low to imagine? Seems like there is huge under-reporting.

What is the Gig Economy?

  • In a gig economy, temporary, flexible jobs are commonplace and companies tend toward hiring independent contractors and freelancers instead of full-time employees.
  • A gig economy undermines the traditional economy of full-time workers who rarely change positions and instead focus on a lifetime career. e.g Employee models of Uber, Ola, Swiggy etc
  • In this economy, tech-enabled platforms connect the consumer to the gig worker to hire services on a short-term basis.
  • Gig workers include self-employed, freelancers, independent contributors and part-time workers.

Where does gig culture exist in Indian Economy?

  • Sectors such as media, real estate, legal, hospitality, technology-help, management, medicine, allied and education are already operating in gig culture.
  • The gig economy can benefit workers, businesses, and consumers by making work more adaptable to the needs of the moment and demand for flexible lifestyles.

Key Drivers for Gig Economy

  • Unconventional work approach by millennials: Hectic lifestyles of employees in private sectors have created a negative perception of full-time employment among millennials.
  • Emergence of a start-up culture: The start-up ecosystem in India has been developing rapidly. For start-ups, hiring full-time employees leads to high fixed costs and therefore, contractual freelancers are hired for non-core activities.
  • MNCs are hiring contractual employees: MNCs are adopting flexi-hiring options, especially for niche projects, to reduce operational expenses after the pandemic.
  • Rise in freelancing platforms: Rise in freelancing platforms has also aided in the development of the gig economy.
  • Business Models: Gig employees work on various compensation models such as fixed-fee (decided during contract initiation), time & effort, actual unit of work delivered and quality of outcome.
  • Impact of Covid-19: Many laid-off employees are focusing on developing skills to avail freelance job opportunities and become a part of this burgeoning economy.

Why is Gig Economy preferred by workers?

  • Profit through multiple work: One can work on freelancing as well as work full-time somewhere else.
  • Women empowerment: It is very beneficial for womenwho work on this concept when they cannot continue their work or take a break from career due to marriage or child birth.
  • Leisure and dependency: Retired peoplecan stay active after retirement as this will keep them engaged away from loneliness and depression and can earn as well on their own.
  • Flexibility and diversity to the workers: It offers flexibility when workers can work according to their convenience and schedule rather than routine like in full-time jobs.
  • Work from home: The travel costs and energy to travel to the workplace is reduced.

Why is Gig Economy preferred by Employers?

  • Efficiency, efficacy and productivity of workers in the gig economy are much more than that of a stable full-time job.
  • More rconomical for employers-when employment givers can’t afford to hire full-time workers, they hire people for specific projects and pay them.
  • Start-up companies and entrepreneurs – who do not have big financial space – can grow only if they can leverage the services of contract employees or freelancers.
  • In a gig economy, businesses save resources in terms of benefits, office space and training.
  • Competition and efficiency among workers is improved.

Challenges faced in Gig economy

  • No perks and benefits: There are no labour welfare emoluments like pension, gratuity, etc. for the workers.
  • Job insecurity: Gig workers may face unfair termination. They may also attain minimum wages and less paid leave.
  • No legal protection: Workers do not have the bargaining power to negotiate a fair deal with their employers.
  • Unionization of workers will be difficult.
  • Confidentiality of documents etc. of the workplace is not guaranteed
  • Urban nature: The gig economy is not accessible for people in many rural areas where internet connectivity and electricity is unavailable.

New classification by NITI Aayog: Platform vs. Non-platform Workers

  • The NITI Aayog report broadly classifies gig workers into platform and non-platform-based workers.
  • The consequent platformisation of work has given rise to a new classification of labour — platform labour — falling outside of the purview of the traditional dichotomy of formal and informal labour.
  • While platform workers are those whose work is based on online software applications or digital platforms.
  • Non-platform gig workers are generally casual wage workers and own-account workers in the conventional sectors, working part-time or full time.

Recommendations made by NITI Aayog

  • The NITI Aayog has recommended steps to provide social security, including paid leave, occupational disease and accident insurance, support during irregularity of work and pension plans for the country’s gig workforce.
  • It has also recommended introducing a ‘Platform India initiative’ on the lines of the ‘Startup India initiative’.

 

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The job puzzle

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Employment challenge

Context

The government has assured the creation of one million jobs over the next one-and-a-half years. This may be optimistic, but if it does materialise, the employment landscape will change dramatically.

Background

  • What is the unemployment rate? Expressed in percentage, the unemployment rate is defined as the share of people who are without any job.
  • Joblessness in the country essentially relates to educated young adults seeking jobs in the formal economy.
  • The government recently announced it would recruit 10 lakh people in “mission mode” over the next one-and-a-half years.
  • The announcement came at a time when the unemployment rate for youth (aged 15-29 years) in urban areas has been hovering at over 20 per cent for the last several quarters.

What is the employment situation in India today?

  • If jobs are being created on a progressive basis, there will be an increase in income generation, which in turn, should spur consumption.
  • Therefore, if consumption picks up – this can be indicated by the growth in the consumer goods segments — then one can be confident of jobs being created.
  • What is the situation in India? Consumer durable goods have been registering negative or slightly positive growth for the last five years or so — this is a reflection of the purchasing power of the people that ultimately can be linked to job creation.
  • There have been talks of start-up economy in the country and their achievements.
  • Interestingly, it is a well-known fact that, globally, 80-85 per cent of start-ups fold up in the first couple of years mainly due to non-viable models that fail the scaling-up challenge.
  • Therefore, while start-ups sound exciting, job creation at scale cannot be part of these experiments, unless there is an assured flow of funds.

Challenge in recruiting 10 lakh people

  • It will be a really big task given that presently the central government offices house around 3.45 million personnel as per the budget for 2022-23.
  • Short time frame: The first challenge is in recruiting such a large number in this short period of time considering that there are fairly lengthy processes involved in hiring people to government departments.
  • Finding meaningful role: Hiring such a number is good for the country, but finding meaningful roles for them in various departments needs to be seriously examined.
  • Quite clearly, plans need to be in place to provide work to this set of new employees.
  • Increase in cost for the government: The third issue that would have to be kept in mind is the increase in cost for the government.
  • As per the budget for 2022-23, the average outgo per employee was around Rs 12.20 lakh.
  • Assuming the new set earns half of the existing average, the additional cost would be at least Rs 60,000 crore.
  • The salary outlay for the year was Rs 4.22 lakh crore.
  • These provisions would have to be made in subsequent budgets.

Conclusion

The overall unemployment picture looks complex today. While the government’s intent to add over a million jobs in the next 18 months is laudable, the task is audacious and challenging from both an administrative and financial point of view.

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Recruitment of 10 lakh people in “mission mode

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Job creation by the government

Context

The government recently announced that 10 lakh government jobs will be provided over the next 18 months on a “mission mode”.

Background

  • The government recently announced it would recruit 10 lakh people in “mission mode” over the next one-and-a-half years.
  • The announcement came at a time when the unemployment rate for youth (aged 15-29 years) in urban areas has been hovering at over 20 per cent for the last several quarters.
  • According to the Quarterly Bulletin of Periodic Labour Force Survey (PLFS), the youth unemployment rate, according to current weekly status, stood at 20.8 per cent in urban areas during October-December 2021.
  • The annual PLFS report too shows that the overall youth unemployment rate, according to usual status (ps+ss), was at 12.9 per cent — 18.5 per cent in urban areas and 10.7 per cent in rural areas — during July-June 2020-21.

Three takeaways from the announcement

  • One, the creation of employment is indeed a problem and can no longer be hidden from the public discourse.
  • Two, the private sector, especially modern sectors such as the service and manufacturing sectors, which are dominated by multinational companies, have not created many jobs.
  • Even if the Information Technology sector or the modern gig economy have created jobs, these are either very high-skilled jobs or low-skilled ones.
  • Three, the government in the Nehruvian scheme of development occupied an important place in the labour market.
  • The government is now forced to step in as persistently rising inflation, unemployment and underemployment threaten to politically affect it.

Employment data and issues with it

  • Government is at present relying on the Employees’ Provident Fund Organisation/National Pension System/Employees’ State Insurance Scheme registrations and exits as indicators of the formal labour market.
  • This could be misleading as companies may be increasing registrations to cross the threshold to become eligible to fall under any of these.
  • Formalisation: Hence, this might be more a case of formalisation rather than employment generation.
  • Second, media reports show that more than 85% of those aspiring for those 10 lakh jobs could be consumed by existing vacancies in Central government departments (8,72,243).
  • The decline in PSU jobs: Third, 241 central public sector enterprises (CPSEs) have been shedding jobs in recent years.
  • The decline in quality of jobs: Even though the labour force and workforce participation rates have increased marginally, there is a decline in the quality of jobs, viz. there is a rise in the unpaid segment of the self-employed and a rise in the share of the agricultural sector in total employment over the last three Periodic Labour Force Surveys (43% to 47%).

Role of the private sector

  • The private sector creates jobs in response to market forces and while taking into consideration radically altering technological developments.
  • We cannot avoid placing the government at the centre of employment creation beyond a certain point.
  • Projects in the modern private sector consume a lot of capital to generate very few jobs.
  • For instance, recently, there was a report that the Adani Group has invested ₹70,000 crore (or ₹700 million) in Uttar Pradesh to create merely 30,000 jobs.
  • Foreign Direct Investment, which at any rate is highly capital-intensive, goes mostly into the non-manufacturing sectors.

Way forward

  • The government’s role in employment generation has entered into popular discourse and discussions on policy formation.
  • The government should play a significant role soon.
  • Government as principal employment generator: The government should re-establish its role as the principal employment generator through jobs in its ministries and CPSEs and through assured employment generation programmes like MGNREGA.

Conclusion

Employment is not merely about numbers and growth figures.  We need to concentrate on enabling the creation of decent work and a sustainable labour market to which India is committed as a member of the United Nations and the International Labour Organization.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Enemy Property in India

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Enemy Property

Mains level: Not Much

The Central Bureau of Investigation (CBI) has registered some cases on allegations that huge losses to the exchequer was caused by leasing out prime-value land under the Custodian of Enemy Property for India (CEPI) on forged documents.

Why in news?

  • Hectares of commercial land located in Uttar Pradesh were leased out at nominal rates in favour of the lessees through manipulation.

What is “Enemy Property”?

  • In the wake of the India-Pakistan wars of 1965 and 1971, there was the migration of people from India to Pakistan.
  • Under the Defence of India Rules framed under The Defence of India Act, 1962, the Government of India took over the properties and companies of those who took Pakistani nationality.
  • These “enemy properties” were vested by the central government in the Custodian of Enemy Property for India.
  • The same was done for property left behind by those who went to China after the 1962 Sino-Indian war.
  • The Tashkent Declaration of January 10, 1966 included a clause that said India and Pakistan would discuss the return of the property and assets taken over by either side in connection with the conflict.
  • However, the Government of Pakistan disposed of all such properties in their country in the year 1971 itself.

Dealing with enemy property

  • The Enemy Property Act, enacted in 1968, provided for the continuous vesting of enemy property in the Custodian of Enemy Property for India (CEPI).
  • The central government, through the Custodian, is in possession of enemy properties spread across many states in the country.
  • Some movable properties too, are categorised as enemy properties.
  • In 2017, Parliament passed The Enemy Property (Amendment and Validation) Bill, 2016, which amended The Enemy Property Act, 1968, and The Public Premises (Eviction of Unauthorised Occupants) Act, 1971.

 

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What are ‘Green Jobs’, mentioned by PM in his Environment Day speech?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Green Jobs

Mains level: Green Economy

At an event to mark World Environment Day recently, PM mentioned India’s efforts to create ‘green jobs’.

What are ‘Green Jobs’?

  • ‘Green jobs’ refer to a class of jobs that directly have a positive impact on the planet, and contribute to the overall environmental welfare.
  • Jobs involving renewable energy, conservation of resources, ensuring energy efficient means are categorised under the same.
  • In all, they are aimed at reducing the negative environmental impact of economic sectors and furthering the process of creating a low-carbon economy.
  • The idea behind a low-carbon economy or decarbonisation is fairly simple — it is about maintaining a sustainable economy.

India and ‘green jobs’

  • The Skill Council for Green Jobs was launched by the Union government on October 1, 2015.
  • Aligned to the National Skill Development Missions, it was set up to be a not-for-profit, independent, industry-led initiative.

Why need Green Jobs?

  • The UNEP’s 2019 Emissions Gap report dictates that it is essential for greenhouse gas emissions to reduce by 7.6% per annum between the years 2020 to 2030.
  • This is necessary to reach the target that was set during the Paris Agreement.
  • Failing to meet the same would consequently result in a failure to effectively combat global warming.
  • Consequently, a decarbonized economy plays a key role in ensuring a greener, safer, healthier and more sustainable planet to inhabit.

Way forward

  • According to the ILO, India moving to a green economy by the next decade would alone create about 3 million jobs in the renewable energy sector.
  • The renewable energy sector created about 47,000 new jobs in 2017 accounting for a 12% increase in just the span of a year.
  • For India ‘green jobs’ can prove immensely useful to the country with sectors like renewable energy, waste management, green transport and urban farming.
  • An integrated, systematic approach is crucial to ensuring this.

 

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Gig Workers’ Rights

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Gig Economy

Mains level: Read the attached story

The Union Labour Ministry is organizing a program aimed at sharing information and good experiences on policies and global practices relating to gig and platform workers and their social security.

What is the Gig Economy?

  • In a gig economy, temporary, flexible jobs are commonplace and companies tend toward hiring independent contractors and freelancers instead of full-time employees.
  • A gig economy undermines the traditional economy of full-time workers who rarely change positions and instead focus on a lifetime career. e.g Employee models of Uber, Ola, Swiggy etc
  • In this economy, tech-enabled platforms connect the consumer to the gig worker to hire services on a short-term basis.
  • Gig workers include self-employed, freelancers, independent contributors and part-time workers.

Where does gig culture exist in Indian Economy?

  • Sectors such as media, real estate, legal, hospitality, technology-help, management, medicine, allied and education are already operating in gig culture.
  • The gig economy can benefit workers, businesses, and consumers by making work more adaptable to the needs of the moment and demand for flexible lifestyles.

Key Drivers for Gig Economy

  • Unconventional work approach by millennials: Hectic lifestyles of employees in private sectors have created a negative perception of full-time employment among millennials.
  • Emergence of a start-up culture: The start-up ecosystem in India has been developing rapidly. For start-ups, hiring full-time employees leads to high fixed costs and therefore, contractual freelancers are hired for non-core activities.
  • MNCs are hiring contractual employees: MNCs are adopting flexi-hiring options, especially for niche projects, to reduce operational expenses after the pandemic.
  • Rise in freelancing platforms: Rise in freelancing platforms has also aided in the development of the gig economy.
  • Business Models: Gig employees work on various compensation models such as fixed-fee (decided during contract initiation), time & effort, actual unit of work delivered and quality of outcome.
  • Impact of Covid-19: Many laid-off employees are focusing on developing skills to avail freelance job opportunities and become a part of this burgeoning economy.

Why is Gig Economy preferred by workers?

  • Profit through multiple work: One can work on freelancing as well as work full-time somewhere else.
  • Women empowerment: It is very beneficial for womenwho work on this concept when they cannot continue their work or take a break from career due to marriage or child birth.
  • Leisure and dependency: Retired peoplecan stay active after retirement as this will keep them engaged away from loneliness and depression and can earn as well on their own.
  • Flexibility and diversity to the workers: It offers flexibility when workers can work according to their convenience and schedule rather than routine like in full-time jobs.
  • Work from home: The travel costs and energy to travel to the workplace is reduced.

Why is Gig Economy preferred by Employers?

  • Efficiency, efficacy and productivity of workers in the gig economy are much more than that of a stable full-time job.
  • More rconomical for employers-when employment givers can’t afford to hire full-time workers, they hire people for specific projects and pay them.
  • Start-up companies and entrepreneurs – who do not have big financial space – can grow only if they can leverage the services of contract employees or freelancers.
  • In a gig economy, businesses save resources in terms of benefits, office space and training.
  • Competition and efficiency among workers is improved.

Challenges faced in Gig economy

  • No perks and benefits: There are no labour welfare emoluments like pension, gratuity, etc. for the workers.
  • Job insecurity: Gig workers may face unfair termination. They may also attain minimum wages and less paid leave.
  • No legal protection: Workers do not have the bargaining power to negotiate a fair deal with their employers.
  • Unionization of workers will be difficult.
  • Confidentiality of documents etc. of the workplace is not guaranteed
  • Urban nature: The gig economy is not accessible for people in many rural areas where internet connectivity and electricity is unavailable.

Way Forward

  • The gig economy has been on the rise and is expected to beat the pre-pandemic estimates due the expected influx of gig workers transitioning from full-time employment.
  • While the government has taken the initial steps to ensure social security of gig workers, the ‘Code on Social Security’ needs to be fine-tuned.

 

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State of (un)employment in India

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Labour force participation rate (LFPR)

Mains level: Unemployment in India

Data from the Centre for Monitoring Indian Economy (CMIE) shows that India’s labour force participation rate (LFPR) has fallen to just 40% from an already low 47% in 2016.

What is LFPR?

  • Before understanding LFPR, we need to define the labour force itself.
  • According to the CMIE, the labour force consists of persons who are of age 15 years or older, and belong to either of the following two categories:
  1. are employed
  2. are unemployed and are willing to work and are actively looking for a job
  • There is a crucial commonality between the two categories — they both have people “demanding” jobs.
  • This demand is what LFPR refers to. While those in category 1 succeed in getting a job, those in category 2 fail to do so.
  • Thus, the LFPR essentially is the percentage of the working-age (15 years or older) population that is asking for a job; it represents the “demand” for jobs in an economy.
  • It includes those who are employed and those who are unemployed.
  • The Unemployment Rate (UER), which is routinely quoted in the news, is nothing but the number of unemployed (category 2) as a proportion of the labour force.

What is the significance of LFPR in India?

  • Typically, it is expected that the LFPR will remain largely stable.
  • As such, any analysis of unemployment in an economy can be done just by looking at the UER.
  • But, in India, the LFPR is not only lower than in the rest of the world but also falling. This, in turn, affects the UER because LFPR is the base (the denominator) on which UER is calculated.
  • The world over, LFPR is around 60%. In India, it has been sliding over the last 10 years and has shrunk from 47% in 2016 to just 40% as of December 2021.
  • This shrinkage implies that merely looking at UER will under-report the stress of unemployment in India.
  • Recent trend suggests that not only that more than half of India’s population in the working-age group is deciding to sit out of the job market, but also that this proportion of people is increasing.

How is it under-reported?

  • Imagine that there are just 100 people in the working-age group but only 60 ask for jobs — that is, the LFPR is 60% — and of these 60 people, 6 did not get a job. This would imply a UER of 10%.
  • Now imagine a scenario when the LFPR has fallen to 40% and, as such, only 40 people are demanding work. And of these 40, only 2 people fail to get a job.
  • The UER would have fallen to 5% and it might appear that the economy is doing better on the jobs front but the truth is starkly different.
  • The truth is that beyond the 2 who are unemployed, a total of 20 people have stopped demanding work.
  • Typically, this happens when people in the working-age get disheartened from not finding work.

So, what is the correct way to assess India’s unemployment stress?

  • When LFPR is falling as steadily and as sharply as it has done in India’s case, it is better to track another variable: the Employment Rate (ER).
  • The ER refers to the total number of employed people as a percentage of the working-age population.
  • By using the working-age population as the base and looking at the number of people with jobs, the ER captures the fall in LFPR to better represent the stress in the labour market.

ER trends in India

  • If one looks at the ER data (Chart 1), it becomes clear that while India’s working-age population has been increasing each year, the percentage of people with jobs has been coming down sharply.
  • Looking at the absolute numbers makes the stress even more clear.
  • In December 2021, India had 107.9 crore people in the working age group and of these, only 40.4 crore had a job (an ER of 37.4%).
  • Compare this with December 2016 when India had 95.9 crore in the working-age group and 41.2 crore with jobs (ER 43%).
  • In five years, while the total working-age population has gone up by 12 crore, the number of people with jobs has gone down by 80 lakh.

Why is India’s LFPR so low?

  • The main reason for India’s LFPR being low is the abysmally low level of female LFPR.
  • According to CMIE data, as of December 2021, while the male LFPR was 67.4%, the female LFPR was as low as 9.4%.
  • In other words, less than one in 10 working-age women in India are even demanding work.
  • Even if one sources data from the World Bank, India’s female labour force participation rate is around 25% when the global average is 47%.

Why do so few women demand work?

  • One reason is essentially about the working conditions — such as law and order, efficient public transportation, violence against women, societal norms etc — being far from conducive for women to seek work.
  • The other has to do with correctly measuring women’s contribution to the economy.
  • There are methodological issues in formally capturing women’s contribution to the economy since a lot of women in India are exclusively involved within their own homes.
  • Lastly, it is also a question of adequate job opportunities for women.

How do people who leave the labour force survive?

  • Households with more than one working member often witness this phenomenon.
  • The fall in the LFPR since 2016 has been accompanied by a fall in the proportion of households where more than one person is employed.
  • The fall in LFPR has largely been the result of the additional person employed in a typical household losing a job.

 

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Maharashtra develops Migration Tracking System (MTS)

Note4Students

From UPSC perspective, the following things are important :

Prelims level: MTS Project

Mains level: Migration tracking in India

In a first-of-its-kind project in the country, the Maharashtra government has developed a website-based migration tracking system (MTS) application to map the movement of vulnerable seasonal migrant workers through individual unique identity numbers.

What is MTS Project?

  • The MTS project is envisaged to maintain the continuity of the Integrated Child Development Services (ICDS) like nutrition supply, immunisation and health check-up etc. to migrant beneficiaries.
  • It is targeted for children aged up to 18 years, lactating mothers and pregnant women registered with the Anganwadi centres.
  • Their migration will be tracked for ensuring the portability of the ICDS for their families in their destination districts within or outside the state until their return to their native places.

Need for such a project

  • Distress-driven seasonal migration of workers is quite prevalent in Maharashtra.
  • Due to lockdowns, a large number of women and children had got displaced and missed on their nutrition, vaccination and other services under the ICDS scheme.
  • Like other states, does not have any institutionalized mechanism to enumerate it.
  • So, through this initiative, the state has sought to capture the data of intra-district, inter-districts and interstate migration of such workers.

Working details of the project

  • Anganwadi workers have to first register the migrating beneficiaries from their areas on the MTS website app on their laptops or mobile phones by using the workers’ identity cards like Aadhaar, PAN card, or ration cards etc.
  • Other than names, the Anganwadi workers have to mention the age, weight, and height of the migrant children, who will be placed in nutritional categories like severe, moderate or acute.
  • Depending on this data, the nutrition benefits will be allocated to the children in their new locations.
  • On the MTS app, the Anganwadi workers would also collect details about various informal sectors — such as brick kilns, agriculture labour, stone crushing, construction work, sugarcane cutting or sugar factory — where the migrant workers are headed along with their children.

 

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Time Banking as a Crucial Tool to Empower Women

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Time Bank System

Mains level: Read the attached story

This newscard is an excerpt of an article originally published in the Down To Earth.

Defining Work

  • ‘Work’ was defined by Spanish economist Lourdes Beneria in 1999 as a paid economic activity linked to the market.
  • Both paid and unpaid work, however, are constituents of our economic life.
  • This leads to an ecosystem where unpaid and care work, performed for long hours, becomes invisible.

Narrative of Unpaid Work

  • Women perform 75 per cent of the world’s unpaid care work, and unfortunately it is not accounted for in a nation’s gross domestic product.
  • The largest source of women’s unpaid labour is domestic work.
  • These include household chores like grocery shopping, cooking, and cleaning as well as caregiving to the children, elderly and infirm.
  • In the absence of this, survival is perceived as a challenge for both individuals and society as every economy is dependent on unpaid labour and care services.

Time Poverty and unpaid work

  • This share of labour has a cost not only in terms of the unrecognised monetary value but also time poverty.
  • Time poverty is defined as “not having enough time” to pursue interests beyond unpaid domestic / care work.
  • Time poverty has a direct bearing on the ability of women to contribute to or participate in the labour market and / or public or political life.
  • Time poverty is also responsible for insufficient political participation of women globally.

Issues with unpaid work

  • Unpaid labour is not considered ‘real work’ and is often devalued by the men and society, who directly benefit from it.
  • The situation leads to emotional strain and combined with the time poverty, the costs often outweigh the benefits.
  • Often, women do not find enough time or motivation to participate in activities outside the household.
  • Female labour force participation rate is on a declining trend in major economies.

The conception of Time Banking

  • Time banking comes forward as a social innovation for increased empowerment of women.
  • Traditionally, household chores are expected to be performed by women. Women in general are more time poor than men.
  • Empowerment of women is limited by time poverty. In this context the concept of time banking was introduced
  • Time banking can be viewed as an opportunity cost of an unpaid activity in terms of the time sacrificed.

How does time bank function?

  • In time banks, one hour equals one time credit, regardless of the service being performed or the level of each person’s skill or gender.
  • The time banks are time-sharing cooperative among women, with people helping each other meet their day-to-day needs and address challenges in their community.
  • For each hour of a service exchanged, the service provider receives one, time credit and the beneficiary pays one, time credit.
  • The time bank networks tap into unused resources of people in the community to fill unmet needs of each other.

Significance of time banking for women

  • Time-banking can benefit women, their families and their communities by alleviating time poverty through the system of exchange services through time credits.
  • The system has the potential to improve the livelihoods of women and their families, thereby increasing overall economic activities.
  • There were time banks operating in more than 30 countries in the Americas, Africa and Europe as well as in Russia and China.
  • Most case studies showed that time banks have functioned most as community-building tools, economic drivers or within elder care.
  • They can also be utilised to prioritise women’s political participation.
  • This has a direct impact on women empowerment and entails benefits to individual women, their families and communities.

Time bank networks can be utilised for increasing political participation of women in the following ways:

  1. Directly: Through utilisation of time credits for campaigning for office
  2. Indirectly: By educating themselves or others on local issues or understanding their rights, accessing government programs and mobilising others.

Way forward

  • Across the world, there are examples in our everyday life of intra- and inter-family examples of informal time-sharing.
  • However, for tangible results on a community or economy scale, the concept needs scaling up and formalisation.
  • Time banking, if made a formal arrangement, has the potential of community building, civic inclusiveness and increasing economic activity.
  • Above all, it has the potential to act as the catalyst to women empowerment by formally recognising the economic value of unpaid labour and tapping the same across communities.

 

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Human Migration: Reasons & Impact

Note4Students

From UPSC perspective, the following things are important :

Prelims level: One Nation One Ration Card project

Mains level: Paper 2- Policy for migrant labourers

Context

Repeated surveys have found that the incomes of migrant households continue to be lower than pre-pandemic levels, even after returning to cities.

Lack of policy for migrants

  • In the wake of a nationwide lockdown, India was left shocked by the plight of migrant workers walking hundreds of kilometres.
  • They became the focus of large-scale relief efforts by governments and civil society alike.
  • The Government ramped up the One Nation One Ration Card (ONORC) project, announced the Affordable Rental Housing Complexes (ARHC) scheme, set up the e-Shram portal and began to draft a migration policy.
  •  Despite this, a cohesive migration policy guidance remains elusive.
  • Contribution of migrant workers: Today, a third of the nation’s workforce is mobile.
  • Migrants fuel critical sectors such as manufacturing, construction, hospitality, logistics and commercial agriculture.
  • Despite clear economic and humanitarian reasoning to bring migrants back into the policy discourse, the current policy scenario is at best fragmented and at worst waning.

Structural constraints

1] Politicisation of issue and fragmented policy response

  •  Migration is a highly politicised phenomenon in India.
  • ‘Destination States’ experience a tension between economic needs, which require migrant labour, and political needs, which promote nativist policies that impose domicile restrictions on employment and social security.
  • On the flip side, the ‘sending States’ are highly motivated to serve their “own people” because they vote in their source villages.
  • This fragmented policy response to internal migration follows from State-specific calculations.
  • Development policy in India has bet big on rural development as an antidote to migration.
  • This widespread ‘sedentary bias’ continues to influence policy even though migration is an important pathway for impoverished marginalised rural households to find economic security (and social emancipation).

2] Categorisation challenge

  • Migrants are a perennially fuzzy category in policy discourse, located inside two larger categories: the unorganised worker and the urban poor.
  • Even the e-Shram portal, which has made impressive progress in registering unorganised workers, has been unable to accurately distinguish and target migrants.
  • Policy interventions in major urban destinations continue to conflate the urban poor with low-income migrants.
  • Hence, slum development continues as the primary medium for alleviating migrant concerns, while in reality, most migrants live on worksites that are entirely out of the policy gaze.

3] Gaps in the data

  • Migration policy discourse is seemingly paralysed by the now well-acknowledged failure of official datasets to capture the actual scale and the frequency of internal migration in India.
  •  Data systems designed to periodically record only one spatial location have posed great challenges to welfare delivery for up to 500 million people who are part of multi-locational migrant households.
  • The novel coronavirus pandemic has placed a sharp focus on problems such as educating and vaccinating those children who accompany their migrant parents, or ensuring that migrant women avail maternity benefits at multiple locations.

Way forward: Strategic policy guidance by Centre and a platform for inter-State coordination

  • Policy in India often emerges from the ground up, taking decades to cement into national law and standard practice.
  • We have seen this in education and food security.
  • State’s initiatives: In migration too, many States have initiated data projects that can track migrants and generate dynamic real-time data that aid welfare delivery.
  • Maharashtra’s Migration Tracking System (MTS), Chhattisgarh’s State Migrant Workers Policy is premised on registering migrant workers at source and tracking them through phone-based outreach systems.
  • Multisectoral approach: There is further need for multisectoral approaches underpinned by a strategic convergence across government departments and initiatives.
  • Odisha’s Planning and Convergence Department, which offers an institutional mechanism for inter-departmental coordination, is one possible model.
  • Important role of the Centre:  State-level political economy constraints make the Centre’s role particularly crucial in addressing issues of inter-State migrant workers at ‘destination States’.
  • The NITI Aayog’s Draft Policy on Migrant Workers is a positive step forward.

Conclusion

Strategic initiatives to provide migrants safety nets regardless of location as well as bolster their ability to migrate safely and affordably must keep up the momentum toward migrant-supportive policy.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Labour Ministry launches ‘Donate a Pension’ Scheme 

Note4Students

From UPSC perspective, the following things are important :

Prelims level: ‘Donate a Pension’ Scheme

Mains level: Not Much

The Union Labour and Employment Ministry has launched the “donate a pension” scheme.

‘Donate a Pension’ Scheme

  • This scheme allows any citizen to pay the premium amount on behalf of an unorganized worker under the Pradhan Mantri Shram Yogi Maan-Dhan
  • Maan-Dhan scheme is a government scheme meant for old age protection and social security of unorganized workers.

Eligibility criteria and benefits

  • The scheme was launched in 2019, allows unorganized sector workers between 18 and 40 years who earn up to ₹15,000 a month to enroll by paying a premium amount between ₹55 and ₹200, depending on the age, that would be matched by the government.
  • On reaching the age of 60, the beneficiaries would get a ₹3,000 monthly pension.

Features of the scheme

  • The scheme allows a citizen to “donate the premium contribution of their immediate support staff such as domestic workers, drivers, helpers, caregivers, nurses in their household or establishment.
  • The donor can pay the contribution for a minimum of one year, with the amount ranging from ₹660 to ₹2,400 a year depending on the age of the beneficiary, by paying through maandhan.in or visiting a Common Service Centre.

 

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Local job laws that raise constitutional questions

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Article 16

Mains level: Paper 2- Reservation in jobs for locals

Context

Last week, the Punjab and Haryana High Court admitted a petition challenging the constitutionality of the Act, and stayed the implementation until it heard the case.

Laws raises constitutional questions

  • There are at least three important constitutional questions that arise from this Act.

[1] Violation of Article 19(1)(g)

  • Article 19(1)(g) of the Constitution guarantees freedom to carry out any occupation, trade or business.
  • There may be reasonable restrictions “in the interests of the general public”, and in particular related to specifying any professional or technical qualifications, or to reserve a sector for government monopoly.
  • This Act, by requiring private businesses to reserve 75% of lower end jobs for locals, encroaches upon their right to carry out any occupation.
  • In 2005, in the P.A. Inamdar case, Supreme Court said that reservation cannot be mandated on educational institutions that do not receive financial aid from the state, as that would affect the freedom of occupation.

[2] Violation of Article 16

  • The provision of reservation by virtue of domicile or residence may be unconstitutional.
  • Article 16 of the Constitution specifically provides for equality of opportunity for all citizens in public employment.
  • It prohibits discrimination on several grounds including place of birth and residence.
  • However, it permits Parliament to make law that requires residence within a State for appointment to a public office.
  • This enabling provision is for public employment and not for private sector jobs.
  • And the law needs to be made by Parliament, and not by a State legislature.

[3] Breaching of 50% limit

  • In the Indra Sawhney case in 1992, the Supreme Court capped reservations in public services at 50%.
  • It however said that there may be extraordinary situations which may need a relaxation in this rule.
  • It also specified that “in doing so, extreme caution is to be exercised and a special case made out”.
  • That is, the onus is on the State to make a special case of exceptional circumstances, for the 50% upper limit on reservations to be relaxed.
  • It stated that the 50% limit is “to fulfil the objective of equality”, and that to breach the limit “is to have a society which is not founded on equality but on caste rule”.
  • The Haryana Act does not further “caste rule” as it is for all residents of the State irrespective of caste but it breaches the notion of equality of all citizens of India.

[4] Against the conception of India as a one nation

  •  The Constitution conceptualises India as one nation with all citizens having equal rights to live, travel and work anywhere in the country.
  • These State laws go against this vision by restricting the right of out-of-State citizens to find employment in the State.
  • This restriction may also indirectly affect the right to reside across India as finding employment becomes difficult.
  • If more States follow similar policies, it would be difficult for citizens to migrate from their State to other States to find work.

[5] Economic implications

  • The move may potentially increase the costs for companies.
  • There may also be an increase in income inequality across States as citizens of poorer States with fewer job opportunities are trapped within their States.

Conclusion

The courts, while looking at the narrow questions of whether these laws violate fundamental rights, should also examine whether they breach the basic structure of the Constitution that views India as one nation which is a union of States, and not as a conglomeration of independent States.

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Issues with Population Control Bill

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Need for Population Control Policy

The Rajya Sabha has discussed a Private Member’s Bill on population regulation.

The Population Control Bill

  • First introduced in 2019, it is a private member bill proposed by Rakesh Sinha.
  • The purpose of the bill was to control the population growth of India.
  • The proposed bill then was signed by 125 Members of Parliament (MP) and is yet to become an act of law.

It seeks to amend Article 47 by inserting article 47A to the Constitution of India. It proposes that-

  1. The State shall promote small family norms by offering incentives in taxes, employment, education etc. to its people who keep their family limited to two children
  2. The state shall withdraw every concession from and deprive such incentives to those not adhering to small family norm, to keep the growing population under control.

Key provisions

  • Penalties: The 2019 bill talked about introducing penalties for couples not adhering to the two-child policy such as debarment from contesting in elections and ineligibility for government jobs.
  • Two-child policy: The 2020 bill proposes to introduce a two-child policy per couple.
  • Incentivizing adoption: It shall incentivize adoption through various measures such as educational benefits, taxation cuts, home loans, free healthcare, and better employment opportunities.
  • Birth spacings: It also proposes to ensure healthy birth spacing through measures related to augmenting the availability, accessibility and affordability of quality reproductive health services.

Issues with penal provisions

  • Alienation: If a family was penalized for more than two children, then the third child would develop a feeling of alienation that he is an unwanted child.
  • Bar on Women: The biggest victim of such would be women, irrespective of religion. They would be debarred in political participation.
  • Selective abortions: In India, the preference for male children may lead to a greater anti-female child sex selection because parents will only have “two attempts” to have babies.
  • Violation of reproductive autonomy: To control and regulate the number of children a family can have is a gross violation of human rights, the right to self-determination and an individual’s reproductive autonomy.
  • Violation of Individual Privacy: A right to procreation is not explicitly mentioned in the Constitution but it comes under the ambit of Article 21, as discussed in Jasvir Singh vs State of Punjab.
  • Remarriage issues: A divorced person who has two children with a prior partner cannot bear a child with their next spouse.

Why need such policy?

  • India had a land availability of only 1.2 hectare per person, while the resources that get regenerated automatically was 0.43 only.
  • We are an ecological debtor. The ecological footprint which we use and the gap between their regeneration is 187%.
  • If this continued for 30 years, then resources would be exhausted and people would not be able to lead a dignified life.
  • Some people see demographic dividend in the growing population but it was being used as cheap labour globally.

Way forward

  • The population of India is seen as the biggest obstacle to its economic development.
  • It is the fall guy for governments seeking to justify their incompetence.
  • No legislation must be enacted unless its future impact and social effect are first completely realized.

 

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What is E-SHRAM Portal?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: E-Shram Portal

Mains level: Unemployment since the pandemic

Over 2 crore people who have signed up for the Centre’s portal for unorganised sector workers hold a Graduate Degree.

E-Shram

  • On August 26, 2021, the Ministry of Labour and Employment (MOLE) launched the E-Shram, the web portal for creating a National Database of Unorganized Workers (NDUW), which will be seeded with Aadhaar.
  • It seeks to register an estimated 398-400 million unorganized workers and to issue an E-Shram card.

Issues with E-Shram

(A) Time constraints

  • Long process: Given the gigantic nature of registering each worker, it will be a long-drawn process.
  • No gestation period: The Government has not mentioned a gestation period to assess its strategy and efficiency.
  • No hasty process: Employers are or required their workers to register even. While the Government can appeal to them, any penal measure will hurt the ease of doing business.

(B) Pandemic hides

  • Considering the estimated 380 million workers as the universe of registration — debatable as the novel coronavirus pandemic has pushed lakhs of workers into informality.

(C) Data security

  • Privacy: One of the vital concerns of e-portals is data security, including its potential abuse especially when it is a mega-sized database.
  • No national framework yet: There are also media reports pointing out the absence of a national architecture relating to data security.
  • Local server issues: It has been reported that in some states such as Maharashtra, the server was down for a few days.

(D) Structural issue

  • Aadhaar seeding: Many workers will not have an Aadhaar-seeded mobile or even a smartphone. Aadhaar-seeding is a controversial issue with political overtones, especially in the North-eastern regions.
  • Eligibility: There are several issues concerning the eligibility of persons to register as well as the definitional issues.
  • Exclusion: By excluding workers covered by EPF and ESI, lakhs of contract and fixed-term contract workers will be excluded from the universe of UW. Hazardous establishments employing even a single worker will have to be covered under the ESI, which means these workers also will be excluded.
  • No benefits for the aged: The NDUW excludes millions of workers aged over 59 from its ambit, which constitutes age discrimination.

(D) Complex identities of workers

  • Migration: Many are circular migrant workers and they quickly, even unpredictably, move from one trade to another.
  • Mixed work: Many others perform formal and informal work as some during non-office hours may belong to the gig economy, for example as an Uber taxi or a Swiggy employee. They straddle formal and informal sectors.
  • Gig workers: Even though MOLE has included gig workers in this process, it is legally unclear whether the gig/platform worker can be classified first as a worker at all.

(E) Other impediments

  • Dependence on States: The central government will have to depend on the state governments for this project to be successful.
  • Lack of coordination: In many States, the social dialogue with the stakeholders especially is rather weak or non-existent. The success of the project depends on the involvement of a variety of stakeholders apart from trade unions.
  • Corruption: There is also the concern of corruption as middle-service agencies such as Internet providers might charge exorbitant charges to register and print the E-Shram cards.

Benefits: No immediate carrot

  • Workers stand to gain by registration in the medium to long run.
  • But the instant benefit of accident insurance up to ₹0.2 million to registered workers is surely not an attractive carrot.
  • The main point of attraction is the benefits they stand to gain during normal and crisis-ridden periods such as the novel coronavirus pandemic now which the Government needs to disseminate properly.

Way forward

  • E-Shram is a vital system to provide hitherto invisible workers much-needed visibility.
  • It will provide the Labour Market Citizenship Document to them.
  • The govt should go one step further for triple linkage for efficient and leakage-less delivery of all kinds of benefits and voices to workers/citizens: One-Nation-One-Ration Card (ONOR), E-Shram Card (especially bank account seeded), and the Election Commission Card.
  • Last but not least, registrations cannot be a source of exclusion of a person from receiving social assistance and benefits.

 

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World Employment and Social Outlook – Trends, 2022

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Unemployment since the pandemic

Global unemployment is projected to stand at 207 million in 2022 (21 million more than in 2019 before the COVID-19 pandemic began) says ILO World Employment and Social Outlook – Trends 2022.

World Employment and Social Outlook – Trends 2022

  • The report examines the impacts of the crisis on global and regional trends in employment, unemployment and labour force participation, as well as on job quality, informal employment and working poverty.
  • It also offers an extensive analysis of trends in temporary employment both before and during the COVID-19 crisis.

Key highlights

(1) Job Losses in 2022

  • It is estimated that in 2022 around 40 million people will no longer be participating in the global labour force.
  • The downgrade in the 2022 forecast reflects the impact of ever new variants of COVID-19 on the world of work.
  • Global working hours in 2022 will be almost two per cent below their pre-pandemic level.
  • This is equivalent to the loss of 52 million full-time jobs.

(2) Pauperization

  • The pandemic has pushed millions of children into poverty.
  • It is estimated that in 2020, an additional 30 million adults fell into extreme poverty (living on less than $1.90 per day in purchasing power parity) while being out of paid work.
  • The number of extreme working poor — workers who do not earn enough through their work to keep themselves and their families above the poverty line — rose by eight million.

(3) Impact on women

  • Women have been worse hit by the labour market crisis than men and this is likely to continue.
  • The closing of education and training institutions will have long-term implications for young people, particularly those without internet access.

Key suggestions

  • There is the need for a broad-based labour market recovery — the recovery must be human-centred, inclusive, sustainable and resilient.
  • The recovery must be based on the principles of decent work — including health and safety, equity, social protection and social dialogue.

Back2Basics: International Labour Organization (ILO)

  • The ILO is a UN agency whose mandate is to advance social and economic justice through setting international labour standards.
  • Founded in 1919 under the League of Nations, it is the first and oldest specialised agency of the UN.
  • The ILO has 187 member states: 186 out of 193 UN member states plus the Cook Islands.
  • The ILO’s international labour standards are broadly aimed at ensuring accessible, productive, and sustainable work worldwide in conditions of freedom, equity, security and dignity.

Its Governing Body

  • The Governing body is the apex executive body of the ILO which decides policies, programmes, agenda, budget and elects the Director-General.
  • It meets three times a year, in March, June and November.

Major reports released:

  1. World Employment and Social Outlook
  2. World Social Protection Report
  3. Global Wage Report

 

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All you need to know about the New  Labour Codes

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Labour codes

Mains level: Labour reforms in India

India is likely to implement four new labour codes on wages, social security, industrial relations, and occupational safety by the next fiscal year beginning 2022.

Must read:

[Burning Issue] New Labour Laws

New Labour Codes

The four codes likely to be implemented in FY23 are:

  1. Code on Wages
  2. Industrial Relations Code
  3. Social Security Code, and
  4. Occupational Safety, Health and Working Conditions Code

Objectives of the Labour Code

  • The new labor codes are aimed at facilitating ease of doing business in the country and seek to replace 29 cumbersome laws.
  • The objective is to encompass over 500 million organized and unorganized sector workers—90% of the workforce which has been outside labour laws.
  • The idea is to ensure that they receive wage security, social security and health security, gender equality in terms of remuneration, a minimum floor wage, make the lives of inter-state migrant workers easier.

What is the current status of the codes?

  • The central government has completed the process of finalizing the draft rules, state governments are in the process of drafting the same.
  • With labor being a concurrent subject, states are in the process of pre-publishing draft rules for these reforms.

How many labour laws do Indian states have?

  • The simplification of 29 labour laws into the four labour codes is expected be a watershed moment for labour reforms.
  • India currently has a web of multiple labour legislations, over 40 central laws and 100 state laws involving labour.
  • The Second National Commission on Labour (2002) recommended simplification to bring about transparency and uniformity.

What are the major goals in these codes?

  • Social security benefits: With organized sector workers being approximately 10% of the total workforce, the new codes may ensure that social security benefits are for all.
  • Take-home salary: As per the proposed labour codes, total allowances such as house rent, leave, travel etc. are to be capped at 50% of the salary, while basic pay should account for the remaining 50%.
  • Four days work: There could also be a permissible four-day work week of 12 hours per day.

How will it affect ease of doing business?

  • Labour productivity: It is likely to improve with both employees and employers developing a sense of being partners in wealth creation.
  • Labour reform: A transparent environment in terms of workers’ compensation, clear definition of employee rights and employer duties.
  • Compliance un-burdening: Simplified labour codes making compliance easier are likely to attract investments.
  • Formalization of the economy: With more workers in the organized sector, leakage in terms of direct as well as indirect taxes may be plugged.

 

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Every third informal worker is now registered on E-Shram Portal

Note4Students

From UPSC perspective, the following things are important :

Prelims level: E-Shram Portal

Mains level: Welfare of the unorganized workers

Every third informal sector worker in India is now registered on the e-Shram portal with registration on the portal crossing the 14 crore mark in four months.

About E-Shram Portal

  • The Ministry of Labour and Employment has launched the E-Shram Portal for creating a National Database of Unorganized Workers (NDUW) this year.
  • The E-Shram portal will cover all unorganised workers of the nation and help link them to social security schemes of the Government of India.
  • Aadhaar with mobile number linked is mandatory for the registration.

Category of unorganized workers covered:

  1. Construction Worker
  2. Migrant Worker
  3. Gig & Platform Worker
  4. Street Vendor Worker
  5. Agriculture Worker
  6. Others

Broad objectives of this portal

  • Creation of a centralized database of all unorganized workers (UWs)
  • To improve the implementation efficiency of the social security services for the unorganized workers
  • Integration of Social Security Schemes meant for UWs being administered by MoLE and subsequently, those run by other ministries as well
  • Portability of the social security and welfare benefits to the migrant and construction workers
  • Providing a comprehensive database to Central and State Governments for tackling any National Crises like COVID-19 in future

Benefits of registration

  • Under the scheme, Rs 2.0 Lakh Accidental Insurance cover will be provided to every registered (on E-Shram portal) unorganized worker.
  • Every registered unorganized worker shall be issued an E- Shram card with a unique Universal Account Number (UAN).
  • He/She will be able to access the benefits of the various social security schemes through this Card anywhere anytime.

Who can register on this Portal?

Any individual satisfying the following conditions can register on the portal:

  • An unorganized worker (UW).
  • Age should be between 16-59 years.
  • Not a member of EPFO/ESIC or NPS (Govt. funded)

What is required for registration?

Following is required to register on the portal:

  • Aadhaar Number
  • Mobile number linked with Aadhaar.
  • Savings Bank Account Number with IFSC code

Registrations done so far

  • The latest data of the portal shows that the top five States in terms of number of registrations on e-Shram are U.P., West Bengal, Bihar, Odisha and Jharkhand.
  • Gender analysis of the data shows that 52.56% are female while 47.44% are male.
  • The data show that 42.64% of the registered workers are other backward classes (OBC) followed by 26.45% from general category, 22.54% from the scheduled caste and 8.38% from the Scheduled Tribe.
  • It also show that over 94% registered workers’ income is ₹10,000 per month or below while over 4% have income in the rage of ₹10,000 to ₹15,000 per month.
  • About 51% workers are farm laborers, 11% in construction, 10% in domestic and household work and 6.5% in the apparel segment.

 

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First ever All India Survey on Domestic Workers

Note4Students

From UPSC perspective, the following things are important :

Prelims level: All India Survey on Domestic Workers

Mains level: Not Much

Union Minister for Labour and Employment  has flagged off the first ever All All India Survey on Domestic workers being conducted by Labour Bureau.

All India Survey on Domestic Workers

  • The Survey  is aimed to estimate the number and proportion of domestic workers at National and State level.
  • It would help find percentage distribution of domestic workers with respect to Live-in/Live-out, formal/ Informal Employment, Migrant/Non-Migrant, their wages and other socio-economic characteristics.
  • The survey will also provide the Household Estimates of Live-in/Live-out domestic workers and average number of domestic workers engaged by different types of households.

Objectives of the Survey

  • Estimate the number/proportion of DWs at National and State level.
  • Household Estimates of Live-in/ Live-out DWs.
  • Average number of DWs engaged by different types of households.

Why need such Survey?

  • Domestic workers (DWs) constitute a significant portion of total employment in the informal sector.
  • However, there is a dearth of data on the magnitude and prevailing employment conditions of DW.
  • Hence with the view to have time series data on domestic workers, GoI has entrusted Labour Bureau to conduct an all-India survey on DWs.

Parameters of the Survey

The Domestic Worker Survey collects information on the following broad   parameters:

  • Household Characteristics such as HH size, Religion, Social Group, Usual Monthly Consumption Expenditure, Nature of Dwelling unit.
  • Demographic Characteristics such as Name, Age, Relation to Head, Marital Status, General Education Level, Usual Principal Activity Status, Subsidiary Activity Status and Status of DWs.
  • Information on Employer is also collected such as their preferences of DW regarding Gender and marital status, mode of payment of wages, number of days worked, mode of engagement, whether DW services were availed during ii COVID-19 pandemic, medical support given to DWs.

Scope of the Survey

  • All India States/UTs of India covered are 37 and Districts covered are742
  • Unit of Enumeration is Villages as per Census 2011 and Urban Blocks as per latest phase of UFS.
  • At the all-India level, a total number of 12766 First Stage Units (FSUs) i.e., 6190 villages and 6576 UFS blocks will be covered in the survey.
  • 1,50,000 Households i.e., the Ultimate Stage Units (USU) will be covered.

 

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Rising unemployment is yet to receive the attention it deserves from government

Note4Students

From UPSC perspective, the following things are important :

Prelims level: LFPR

Mains level: Paper 3- Rising unemployment

Context

India’s unemployment rate in August was 8.3 per cent. This was higher than the 7 per cent recorded in July. The month-to-month variations notwithstanding, these are all very high unemployment rates.

Why inflation gets more attention in India than unemployment?

  • Periodic Labour Force Survey (PLFS) results showed the historically high unemployment rate of 6.1 per cent for 2017-18 (July to June). It was at a 45-year high.
  • New norm at 7-8 per cent: Till then, India was used to recording an unemployment rate of around 3 per cent. 
  • Today, an unemployment rate of 7-8 per cent seems to be the norm and such levels do not seem to matter.
  • The unemployment rate is not the most important labour market indicator for a country like India.
  • Why inflation gets preference: Between inflation and unemployment, the two economic indicators conjoined theoretically by the Phillips curve, it is inflation that wields political power.
  • Inflation hurts almost the entire population.
  • Equally importantly, high inflation rates can upset financial markets that in turn exert pressure on regulators to keep inflation in control.
  • Unemployment directly impacts only the unemployed, who don’t count much.
  • Worse still, society perceives being unemployed as an individual shortcoming, and not an outcome of a macroeconomic malaise.

What does low labour force participation rate (LFPR) indicate about the labour market in India?

  • The unemployment rate is a measure of the economy’s inability to provide jobs only for those who seek work.
  • But, in India, very often people do not look for jobs in the belief that none are available which is reflected in a low labour force participation rate (LFPR).
  • India’s LFPR is at around 40 per cent when the global rate is close to 60 per cent.
  • It is important that this belief in the futility of a job hunt is overcome by an explosive creation of new good quality formal jobs.

Why employment rate is a useful indicator for India

  • A useful labour market metric for a country like India is the employment rate.
  • This measures the proportion of the population over 14 years of age that is employed.
  • The definition of employment needs to be changed, at present, engaging in some economic activity for just one hour in any of the past seven days is counted as employment.
  • India’s record in providing employment to its people has been abysmally poor.
  • CMIE’s definition of employment indicates that in 2016-17, only 42.8 per cent of the working-age population was employed.
  •  In the year of the pandemic, it fell to 36.5 per cent.

Reverse migration in employment from manufacturing to low productivity employment

  • People are moving away from factories as manufacturing jobs shrink, to farms that provide shelter largely in the form of disguised unemployment.
  • It cannot be the desire of a nation to move people away from high productivity, better quality jobs in manufacturing to low productivity employment in agriculture or as gardeners or security guards in the household sector.
  • Employment opportunities need to expand in areas where labour is deployed to deliver higher productivity for enterprise and higher returns to labour.

Way forward

  • Increase investment: A large part of the solution to this lack of adequate jobs is in increasing investments.
  • Focus on demand size: For this, the investment climate needs to be business-friendly and government interventions must shift away from supply-side support to spurring demand.

Conclusion

The government needs to come up with policies for generating employment opportunities and stemming the reverse migration from manufacturing jobs to low productivity employment.

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E-Shram

Note4Students

From UPSC perspective, the following things are important :

Prelims level: E-Shram Portal

Mains level: National database for workers: Prospects and challenges

The E-Shram portal has come into existence more than a decade after the passage of the Unorganized Workers’ Social Security Act in 2008.

E-Shram

  • On August 26, 2021, the Ministry of Labour and Employment (MOLE) launched the E-Shram, the web portal for creating a National Database of Unorganized Workers (NDUW), which will be seeded with Aadhaar.
  • It seeks to register an estimated 398-400 million unorganized workers and to issue an E-Shram card.

Better late than never move

  • It has come about even after repeated nudging by the Supreme Court of India.
  • It is the result of state apathy.
  • Had the Central and the State governments begun these legally mandated processes on time, much of the distress of lakhs of vulnerable workers would have been avoided.
  • In fact, the political class owe an ‘apology’ to informal workers.

Issues with E-Shram

(A) Time constraints

  • Long process: Given the gigantic nature of registering each worker, it will be a long-drawn process.
  • No gestation period: The Government has not mentioned a gestation period to assess its strategy and efficiency.
  • No hasty process: Employers are or required their workers to register even.While the Government can appeal to them, any penal measure will hurt the ease of doing business.

(B) Pandemic hides

  • Considering the estimated 380 million workers as the universe of registration — debatable as the novel coronavirus pandemic has pushed lakhs of workers into informality.

(C) Data security

  • Privacy: One of the vital concerns of e-portals is data security, including its potential abuse especially when it is a mega-sized database.
  • No national framework yet: There are also media reports pointing out the absence of a national architecture relating to data security.
  • Local server issues: It has been reported that in some States such as Maharashtra, the server was down for a few days.

(D) Structural issue

  • Aadhaar seeding: Many workers will not have an Aadhaar-seeded mobile or even a smartphone. Aadhaar-seeding is a controversial issue with political overtones, especially in the North-eastern regions.
  • Eligibility: There are several issues concerning the eligibility of persons to register as well as the definitional issues.
  • Exclusion: By excluding workers covered by EPF and ESI, lakhs of contract and fixed-term contract workers will be excluded from the universe of UW. Hazardous establishments employing even a single worker will have to be covered under the ESI, which means these workers also will be excluded.
  • No benefits for the aged: The NDUW excludes millions of workers aged over 59 from its ambit, which constitutes age discrimination.

(D) Complex identities of workers

  • Migration: Many are circular migrant workers and they quickly, even unpredictably, move from one trade to another.
  • Mixed work: Many others perform formal and informal work as some during non-office hours may belong to the gig economy, for example as an Uber taxi or a Swiggy employee. They straddle formal and informal sectors.
  • Gig workers: Even though MOLE has included gig workers in this process, it is legally unclear whether the gig/platform worker can be classified first as a worker at all.

(E) Other impediments

  • Dependence on States: The central government will have to depend on the State governments for this project to be successful.
  • Lack of coordination: In many States, the social dialogue with the stakeholders especially is rather weak or non-existent. The success of the project depends on the involvement of a variety of stakeholders apart from trade unions.
  • Corruption: There is also the concern of corruption as middle-service agencies such as Internet providers might charge exorbitant charges to register and print the E-Shram cards.

Benefits: No immediate carrot

  • Workers stand to gain by registration in the medium to long run.
  • But the instant benefit of accident insurance upto ₹0.2 million to registered workers is surely not an attractive carrot.
  • The main point of attraction is the benefits they stand to gain during normal and crisis-ridden periods such as the novel coronavirus pandemic now which the Government needs to disseminate properly.

Way forward

  • E-Shram is a vital system to provide hitherto invisible workers much-needed visibility.
  • It will provide the Labour Market Citizenship Document to them.
  • The govt should go one step further for triple linkage for efficient and leakage-less delivery of all kinds of benefits and voices to workers/citizens: One-Nation-One-Ration Card (ONOR), E-Shram Card (especially bank account seeded) and the Election Commission Card.
  • Last but not least, registrations cannot be a source of exclusion of a person from receiving social assistance and benefits.

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Right to Sit to be mandated in Tamil Nadu

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Right to Sit

Mains level: Labour reforms

The Tamil Nadu government has tabled a Bill in the Legislative Assembly making it mandatory for establishments to provide seating facilities for employees.

Right to Sit

  • The Right to Sit is aimed to benefit thousands of employees of large and small establishments, particularly those working in textile and jewelry showrooms.
  • Persons employed in shops and establishments in the State are made to stand throughout their duty time resulting in varied health issues.
  • The bill mandates for every premises of establishments to have suitable seating arrangements for all employees so that they may take advantage of any opportunity to sit in the course of their work.
  • This would avoid the ‘on their toes’ situation throughout the working hours.

Inspired from Kerala

  • A few years ago, workers of textile showrooms in Kerala had gone on a protest demanding the ‘Right to Sit’, prompting the government there to amend the Kerala Shops and Establishments Act in 2018.
  • This in turn provided seating arrangements for them.

A move for women

  • Most owners of shops and other retail outlets forbid women, the bulk of the shop workforce, to sit.
  • Even leaning against a wall was punished. They have varicose veins and joint pain from standing.
  • Toilet breaks were strictly limited. This has led to urinary infections, kidney problems.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

[pib] E-Shram Portal:  National Database on Unorganized Workers (NDUW)

Note4Students

From UPSC perspective, the following things are important :

Prelims level: E-Shram Portal

Mains level: Welfare of the unorganized workers

The Union Ministry of Labour & Employment will launch the e-Shram portal – National Database on Unorganized Workers (NDUW).

What is the E-Shram Portal?

  • The government aims to register 38 crore unorganized workers, such as construction labourers, migrant workforce, street vendors and domestic workers, among others.
  • The workers will be issued an e-Shram card containing a 12-digit unique number, which, going ahead, will help in including them in social security schemes.
  • The government had earlier missed deadlines for creating the database, inviting criticism from the Supreme Court.

How will the registration for workers happen on the portal?

  • The registration of workers on the portal will be coordinated by the Labour Ministry, state governments, trade unions and CSCs.
  • Awareness campaigns would be planned across the country to enable nationwide registration of workers.
  • Following the launch of the portal, workers from the unorganized sector can begin their registration from the same day.
  • A national toll free number — 14434 — will also be launched to assist and address the queries of workers seeking registration on the portal.
  • A worker can register on the portal using his/her Aadhaar card number and bank account details, apart from filling other necessary details like date of birth, home town, mobile number and social category.

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The shaky foundation of the labour law reforms

Note4Students

From UPSC perspective, the following things are important :

Prelims level: One Nation One Ration Card

Mains level: Paper 2- Labour law reforms in issues in implementation

Context

The central government has deferred the possible date of implementation of labour codes to October 1, 2021, prolonging the wait before employers and workers could enjoy the benefits extended by the labour codes.

Labour law reforms: Key provisions

  • The government enacted the Code on Wages in August 2019 and the other three Codes, viz., the Industrial Relations Code, the Occupational Safety, Health and Working Conditions Code and Code on Social Security (CSS) in September 2020.
  • Universal minimum wage: The codes would extend universal minimum wages and social security, enable enhanced industrial safety and the provision of social security to gig workers, among other things.
  • Recognition of trade unions: The Industrial Relations Code provides for recognition of trade union(s) by employers, a labour right that eluded workers for seven decades.
  • Flexibility to employers: Employers celebrated the extension of tremendous flexibility to them, even those unasked, such as relief from framing standing orders for most firms.
  • The central government has deferred the possible date of implementation to October 1, 2021.

Issues in implementation

  • State’s have not issued draft rules: Major States such as Tamil Nadu, Kerala, West Bengal, Maharashtra, Haryana and Delhi have not issued the draft rules under any codes.
  • Even though the Code on Wages was enacted in August 2019, it was only in March 2021 that the central government notified the constitution of an advisory committee.
  • Safety concerns persist:  Industrial safety continues to be a grave concern even after the enactment of the Occupational Safety, Health and Working Conditions Code.
  • Lack of clarity on the determination of minimum wage: On June 3, 2021, the government announced an expert committee with a tenure of three years to advise on minimum wages.
  • Then, on July 12, 2021, the government announced that the wage index’s base year would be shifted from 1965 to 2019 to use the revised wage index to determine minimum wages.
  • The Government seems to be facing difficulty regarding the implementation of minimum wages.

Conclusion

Despite the gazetting of four Codes, age-old laws are in force. That reflects poorly on the governance abilities of the governments.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Emigration Bill 2021 does not go far enough

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Emigration Act 1983

Mains level: Paper 2- Emigration Bill 2021

Context

The Emigration Bill 2021 could be introduced in Parliament soon and presents a long-overdue opportunity to reform the recruitment process for nationals seeking employment abroad.

An overview of Emigration Act 1983

  • Labour migration is governed by the Emigration Act, 1983.
  • The Act sets up a mechanism for hiring through government-certified recruiting agents — individuals or public or private agencies.
  • It outlines obligations for agents to conduct due diligence of prospective employers,
  • Sets up a cap on service fees.
  • Establishes a government review of worker travel and employment documents (known as emigration clearances) to 18 countries mainly in West Asian states and South-East Asian countries.

What are the improvements in Emigration Bill 2021?

  • It launches a new emigration policy division.
  • It establishes help desks and welfare committees.
  • It requires manpower agencies to conduct pre-departure briefings for migrants.
  • It increases accountability of brokers and other intermediaries who are also involved in labour hiring.

Shortcoming in Emigration Bill 2021

  • Lacks human rights framework: The 2021 Bill lacks a human rights framework aimed at securing the rights of migrants and their families.
  • For example, in a country such as the Philippines, it explicitly recognises the contributions of Filipino workers and “the dignity and fundamental human rights and freedoms of the Filipino citizens”.
  • Workers to bear recruitment payments and service charges: the Bill permits manpower agencies to charge workers’ service fees, and even allows agents to set their own limits.
  • This provision goes against International Labour Organization (ILO) Private Employment Agencies Convention No. 181 and the ILO general principles and operational guidelines for fair recruitment.
  • The ILO Convention and guidelines recognises that it is employers, not workers who should bear recruitment payments including the costs of their visas, air travel, medical exams, and service charges to recruiters.
  • Criminalise worker: The Bill permits government authorities to punish workers by cancelling or suspending their passports and imposing fines up to ₹50,000 for violating any of the Bill’s provisions.
  • Criminalising the choices migrant workers make is deplorable, runs contradictory to the purpose of protecting migrants and their families, and violates international human rights standards.
  •  Recruiters and public officials could misuse the law to instil fear among workers and report or threaten to report them.
  • Gender dimension not adequadely addressed: This Bill does not also adequately reflect the gender dimensions of labour migration where women have limited agency in recruitment compared to their counterparts.
  • Women are more likely to be employed in marginalised and informal sectors and/or isolated occupations in which labour, physical, psychological, and sexual abuse are common.
  • Limited space for representation: The Bill also provides limited space for worker representation or civil society engagement in the policy and welfare bodies that it sets up.

Way forward

  • The Ministry of External Affairs must start at the top, and draft a clearer purpose which explicitly recognises the contributions of Indian workers, the unique challenges they face, and uphold the dignity and human rights of migrants and their families.

Conclusion

The new Bill is better than the Emigration Act 1983, but more reforms are needed to protect Indian workers.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Revival of Construction sector

Note4Students

From UPSC perspective, the following things are important :

Prelims level: GVA

Mains level: Paper 3- Limits of relying on high-growth sectors

Context

The latest estimates of the fourth quarter of financial year 2020-21 (January-March) brought some relief, for policymakers.

Interpreting the construction sector GVA increase

  • The construction sector showed a 15 per cent increase in gross value added (GVA) in the last quarter, which is nearly double the growth experienced by the sector in the previous year (7.7 per cent).
  • Sign of better times: The buoyant growth of this sector has been hailed by policymakers not just as a sign of better times to come,
  • Addressing distress: Growth in the construction sector is also considered as the capacity of the economy to address the distress that households have faced in the past year.
  • Addressing needs of workforce: The Chief Economic Advisor pointed to the high growth rates in construction possibly to indicate that growth would address the needs of the beleaguered workforce.
  • The Union budget 2021 has also allocated a considerable sum towards infrastructure and construction in the hopes of the sector playing a catalysing role.

Issues with relying on the growth of high-employment sector

  • No strong correlation: While GVA and/or GDP are considered as indicators of economic health, it has been argued in detail how it may not be prudent to rely on these alone as measures of economic welfare.
  • In particular, mere growth in a sector may not necessarily translate into benefits for its workers.
  • In the last quarter of 2019-2020, when construction GVA grew at nearly 8 per cent, employment in the same sector grew by 3 per cent based on our estimates from CMIE-CPHS.
  • Fallback employment option: The fact that employment grew in this sector even during a crisis year is largely because of the fact that the construction sector emerged as a fallback employment option for many displaced workers.
  • During “normal” times, the sector typically employs only about 10-15 per cent of India’s total workforce.
  • Even if this sector were to expand in line with its GVA growth, it will not be able to provide employment beyond a certain level.
  • Employment alone is not enough: Moreover, employment alone is not enough.
  • Earnings for an average daily wage worker in the sector have actually declined this year.
  • Again, the overall economic growth in GVA in the sector has not been passed on to the workers.

Way forward

  • Any relief effort that relies solely on economic growth as a means to uplift workers will be sorely inadequate as we see from the experience of workers in construction.
  • The need of the hour is to go beyond relying on sectoral growth as a means of delivering relief to workers.
  • Direct transfers of cash and food are also needed, as is livelihood support through employment guarantee programmes.

Conclusion

While boosting growth of high-employment sectors is one strategy to adopt, this has its limitations. The capacity of a sector is limited in terms of the number of workers that it can absorb, and the extent to which growth can benefit workers.


Back2Basics: What is GVA?

  • Gross value added (GVA) is an economic productivity metric that measures the contribution of a corporate subsidiary, company, or municipality to an economy, producer, sector, or region.
  • GVA is essentially a measure of the “net” value of output — deducting the cost of any input that went into its production from its total value.
  • GVA thus adjusts gross domestic product (GDP) by the impact of subsidies and taxes (tariffs) on products.

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[pib] Periodic Labour Force Survey (2019 –2020)

Note4Students

From UPSC perspective, the following things are important :

Prelims level: PLFS

Mains level: Unemployment in India

The Periodic Labour Force Survey (PLFS) Annual Report for July, 2019 to June 2020 was recently released by the National Statistical Office (NSO).

Periodic Labour Force Survey

  • Considering the importance of the availability of labor force data at more frequent time intervals, National Statistical Office (NSO) launched PLFS in April 2017.
  • The objective of PLFS is primarily twofold:
  1. to estimate the key employment and unemployment indicators (viz. Worker Population Ratio, Labour Force Participation Rate, Unemployment Rate) in the short time interval of three months for the urban areas only in the Current Weekly Status (CWS).
  2. to estimate employment and unemployment indicators in both ‘Usual Status’ and CWS in both rural and urban areas annually.

Various dimensions of the survey

The PLFS gives estimates of Key employment and unemployment Indicators:

  • Labour Force Participation Rate (LFPR): LFPR is defined as the percentage of persons in the labor force (i.e. working or seeking or available for work) in the population.
  • Worker Population Ratio (WPR): WPR is defined as the percentage of employed persons in the population.
  • Unemployment Rate (UR): UR is defined as the percentage of persons unemployed among the persons in the labor force.
  • Activity Status- Usual Status: When the activity status is determined on the basis of the reference period of the last 365 days preceding the date of the survey, it is known as the usual activity status of the person.
  • Activity Status- Current Weekly Status (CWS): The activity status determined on the basis of a reference period of the last 7 days preceding the date of the survey is known as the CWS of the person.

Highlights of the third report

  • The Labour force participation ratio has increased to 40.1% in 2019-20 from 37.5% and 36.9%, respectively, in the last two years.
  • Worker population rate improved to 38.2% in 2019-20 compared with 35.3% in 2018-19 and 34.7% in 2017-18.
  • The unemployment rate fell to 4.8% in 2019-20. In 2018-19, it stood at 5.8% and 6.1% in 2017-18.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Need for social security to migrant and informal workers

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Recommendation 202

Mains level: Paper 2- Social security for migrant labour

Context

The migrants’ crisis after the two covid waves compelled policy-makers to make certain provisions for them in the schemes announced for the assistance of the poor.

Supreme Court judgement on the issue

  • On June 29, the Supreme Court finally delivered its judgment on the plight of migrant labour.
  • The judgement was notable for two main reasons.
  • First, it recognised that there was the large-scale exclusion of migrant workers and other informal workers from existing schemes due to the lack of their registration and outdated eligibility lists.
  • It noted that no benefits will be denied to migrant workers for want of an Aadhaar card and that food assistance will be provided for migrants who were not covered by the National Food Security Act.
  • Second, it connected informal workers and migrant workers, both of whom experience exclusion, and mandated that the portal for registration of all informal/migrant workers should be fully operational before July 31.

Advantages of providing social protection

  • Investment in social protection is not charity, it is an investment in workers’ productivity and in equitable growth.
  • Providing social protection is, as the UN mooted in 2009 when it spelt out the social protection floor (SPF) initiative after the global financial crisis, the surest way out of a crisis by boosting demand at the bottom of the pyramid.
  • The report of the Advisory Committee of the ILO, in which India was represented by its labour secretary, provides a strong rationale for instituting a universal SPF during economic crises.
  • As a result, all constituents of the ILO adopted Recommendation 202 on social protection floors at the International Labour Conference in 2012.

Inadequate provisions by government

  • The Unorganised Workers’ Social Security Act, was approved by Parliament in December 2008.
  • But it lacks the mandatory elements of the NCEUS’s proposals and included neither a National Minimum Social Security Package, nor the provision for mandatory registration.
  • Estimates show that the central government’s expenditure on all major social protection programmes declined from 1.96 per cent of GDP in 2008-09 to 1.6 per cent in 2013-14 and to only 1.28 per cent in 2019-20.

Way forward

  • The National Commission for Enterprises in the Unorganised Sector (NCEUS) had pointed out that the circular migrant workers were a disadvantaged segment among informal workers.
  • Comprehensive law: The NCEUS had advocated a comprehensive law for the protection of the rights of all informal workers, including migrants, home workers, and domestic workers.
  • Universal registration: NCEUS had also recommended a universal registration mechanism based on self-declaration, with the issuance of a smart social security card, and a National Minimum Social Security Package.
  • Guaranteed social security/social protection: We need the provision of a minimum level of guaranteed social security/social protection for all informal workers and their households within a definite time frame.
  • More public spending: Guaranteed social protection would involve a clear framework and a commitment to greater public resources being spent on social protection as a large class of workers in India do not have an identifiable employer and a contributory social insurance framework will not work for them.
  • Recommendation 202: Government should embrace ILO’s Recommendation 202 and work towards these in a time-bound manner.

Conclusion

To end the silent, painful, and enduring crisis for the workers, as well as the crisis for the economy, the government must urgently recognise the right to social security, embedded both in the Indian Constitution and international covenants.

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Caste-wise split in MGNREGA wage payments

Note4Students

From UPSC perspective, the following things are important :

Prelims level: MGNREGA

Mains level: MGNREGA

The Centre has asked the States to split wage payments under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme into separate categories for Scheduled Castes, Scheduled Tribes and others from this financial year.

What is MGNREGA?

  • The MGNREGA stands for Mahatma Gandhi National Rural Employment Guarantee Act of 2005.
  • This is a labour law and social security measure that aims to guarantee the ‘Right to Work’.
  • The act was first proposed in 1991 by P.V. Narasimha Rao.

The objectives of the MGNREGA are:

  • To enhance the livelihood security of the rural poor by generating wage employment opportunities.
  • To create a rural asset base that would enhance productive ways of employment, augment and sustain a rural household income.

What is so unique about it?

  • MGNREGA is unique in not only ensuring at least 100 days of employment to the willing unskilled workers, but also in ensuring an enforceable commitment on the implementing machinery i.e., the State Governments, and providing a bargaining power to the labourers.
  • The failure of provision for employment within 15 days of the receipt of job application from a prospective household will result in the payment of unemployment allowance to the job seekers.
  • Any Indian citizen above the age of 18 years who resides in rural India can apply for the NREGA scheme. The applicant should have volunteered to do unskilled work.
  • Employment is to be provided within 5 km of an applicant’s residence, and minimum wages are to be paid.
  • Thus, employment under MGNREGA is a legal entitlement.

Answer this PYQ in the comment box:

Q.Among the following who are eligible to benefit from the “Mahatma Gandhi national rural employment guarantee act”?

(a) Adult members of only the scheduled caste and scheduled tribe households.

(b) Adult members of below poverty line (BPL) households.

(c) Adult members of households of all backward communities.

(d) Adult members of any household.

What is the move?

  • States were asked to verify if job cards for SC and ST beneficiaries were being properly allocated at the field level.
  • They were told they would be given fund allocations according to this criterion, indicating that labour budgets would also be segregated on a caste basis.
  • It was aimed at timely wage payments.

Reasons behind

  • There is some inbuilt positive discrimination in the scheme, reflected in the fact that more than 50% of workers are women and almost 40% are SC/ST.
  • However, it felt that the proposed reform would not help SC/ST workers, but would expose all workers to further uncertainties as the system struggles with changes.

Issues with the announcement

  • Workers’ advocates feared this move would cause unnecessary delays and complications in the payment system, and worried that it could lead to a reduction in scheme funding.
  • The rationale was very simple. It is not as if the payments made to SC and ST are not reported on the NREGA website, but overall, in terms of the budgetary outlay.
  • When people take an assessment merely on the Budget head under which the programme is budgeted, then they miss out on this intricate nuance.
  • So the Finance Ministry advised that both the Centre and States should make Budget provisions under SC and ST components as well.

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World Employment and Social Outlook: Trends 2021

Note4Students

From UPSC perspective, the following things are important :

Prelims level: World Employment and Social Outlook: Trends 2021

Mains level: Unemployment since the pandemic

The report titled World Employment and Social Outlook was recently released by the International Labour Organization (ILO).

About the report

  • The report analyses the impact of the crisis on the labour market across the world.
  • It offers projections for recovery and gives details of the unequal impact of the crisis on different groups of workers and enterprises and calls for a broad-based human-centred recovery.

Findings of the report

  • There has been an unprecedented disruption to labour markets worldwide due to the COVID-19 pandemic, which has affected the lives of the younger generation and brought about disruption to their education.
  • Also made it more difficult for them to enter the labour market and hold on to their jobs.
  • The pandemic worsened long-standing inequalities with many women workers dropping out of the labour force.
  • For informal and low-skilled workers, working from home was not an option.
  • Many had to face huge health risks to keep their jobs, often with no access to social security benefits.

Major highlights of the report

  • Global unemployment is expected to be at 205 million in 2022, surpassing the 2019 level of 187 million.
  • The jobs shortfall induced by the novel coronavirus disease (COVID-19) pandemic was 75 million in 2021 and is expected to be 23 million in 2022.
  • An estimated additional 108 million workers and their family members now live in poverty.

The long road to recovery

  • The recovery would remain fragile in many countries due to the uneven rollout of vaccination campaigns and higher levels of public debt and deficits that would make it difficult to tackle the effects of the pandemic.
  • There is an urgent need to build back better — create productive employment opportunities and foster long-term labour market prospects for the most vulnerable.
  • There is a need to strengthen social protection schemes like the MGNREGS in India and make sure nobody is left behind.
  • This would require strong institutions and social dialogue and strong international cooperation to fight global disparities.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Issues in Social Security Code 2020

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Provision in Social Security Code 2020

Mains level: Paper 2- Issues with the Social Security Code 2020

Provisions in Social Security Code 2020

  • India’s Parliament in September 2020 passed a Social Security Code (SS Code 2020).
  • The SS Code 2020 merges existing social security laws and attempts to include informal workers within the ambit of social security administration.
  • The SS Code 2020 amalgamates and rationalises the provisions of eight existing central labour laws.
  • Of these acts, employees provident fund, employees state insurance (ESI), maternity benefit, gratuity are entirely for organised sector workers. 
  • Employee threshold removed: For employees’ state insurance, the existing employee threshold has been withdrawn.
  • Now the central government can extend ESI benefits to any organisation irrespective of the number of workers employed.

Key benefits not available to informal workers in Social Security Code 2020

  • Maternity benefit: Under the SS Code, the provision of maternity benefit has not been made universal.
  • Maternity benefit is presently applicable for establishments employing 10 workers or more.
  • The definition of ‘Establishment’ in the proposed code did not include the unorganised sector.
  • Hence, women engaged in the unorganised sector would remain outside the purview of maternity benefit.
  • Employees Provident Fund: The SS Code maintains that the Employees’ Provident Fund Scheme will remain applicable, as before, to every establishment in which 20 or more employees are employed.
  • Thus, for informal sector workers, access to employees’ provident fund remains unfulfilled too in the new code.
  • Payment of gratuity: Gratuity shall be payable to eligible employees by every shop or establishment in which 10 or more employees are employed, or were employed, on any day of the preceding 12 months.
  • But although payment of gratuity was expanded in the new Code, it still remains inaccessible for a vast majority of informal workers.

Challenges faced by informal workers in availing social security

  • Registration barrier: To avail social security, an informal worker must register herself on the specified online portal to be developed by the central government.
  • Absence of definition: The absence of definite and unambiguous provisions in the present code would further complicate achievement of universal registration.
  • Lack of awareness: Experience shows that there is an awful lack of awareness among informal workers regarding social security schemes.
  • Lack of digital literacy: Online registration places a further challenge as most informal workers lack digital literacy and connectivity.
  • Lack of documents: Informal workers also find it difficult to furnish all documentary papers required as part of the registration process.
  • Furnishing proof of livelihood and income details in the absence of tangible employer-employee relations is very difficult.
  • Such requirements deter informal workers from completing the registration and they continue to remain outside the social security ambit.

Way forward

The provision of social security could be used to formalise the workforce to a certain extent. Employers could have been made to own up to the responsibility of providing social security to their workers.

1) Inter-State cooperation

  • As unorganised workers are spread across the length and breadth of India, inter-State arrangement and cooperation becomes imperative.
  • The central government should conceptualise a basic structure, which if successful, should be adopted by States after necessary customisation.

2) Universal coverage

  • The unorganised workforce is all encompassing, minus the minuscule regular workers of organised sectors.
  • This identity should be primal and all unorganised workers should have basic social security coverage, irrespective of labour market classifications.
  • The code fails to undertake such inclusion in a meaningful way.

Conclusion

The Social Security Code fails to provide adequate protection to informal workers, who constitute 91% of the workforce. The pandemic and misery brought by it on these informal workers highligths the need for universal social security.

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Why has Indian manufacturing been losing jobs since 2016?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not Much

Mains level: Unemployment issues in India

The State of Working India (SWI) 2021 has documented the impact of one year of Covid-19 in India, on jobs, incomes, inequality, and poverty.

Highlights of the SWI 2021

  • The SWI 2021 showed that the pandemic had forced people out of their formal jobs into casual work, and led to a severe decline in incomes.
  • There is a sudden increase in poverty over the past year.
  • Maharashtra, Kerala, Tamil Nadu, Uttar Pradesh, and Delhi, contributed disproportionately to job losses.
  • Unsurprisingly, these are also the states that suffered the maximum Covid caseload.

Labour Participation Rate (LPR) is the ratio of the labour force to the population greater than 15 years of age. It is defined as the section of working population in the age group of 16-64 in the economy currently employed or seeking employment.

Worsened with COVID

  • It pointed to an ailment of the Indian economy that has not only been a longstanding one but also one that has gotten worse over the past few years even without the help of Covid.
  • Agriculture, mines, manufacturing, real estate and construction, financial services, non-financial services, and public administrative services sectors account for 99% of total employment in India.
  • The number of people employed in the manufacturing sector of the economy has come down from 51 million to 27 million — that is, almost halving in the space of just four years!
  • For instance, the number of people employed in agriculture is going up.
  • Equally disheartening is that employment in non-financial services (such as providing education and entertainment industry etc.) has fallen sharply.

Why are these trends worrisome?

  • It is important to understand that traditionally Indian policymakers have been of the view that the manufacturing sector is our best hope to soak up the surplus-labour otherwise employed in agriculture.
  • Manufacturing is well suited because it can make use of the millions of poorly educated Indian youth, unlike the services sector, which often requires better education and skill levels.
  • For the longest time, India has struggled to get its manufacturing industries to create a growing bank of jobs.
  • But, and this is what the CMIE data shows, what is happening in the past 4-5 years is that far from soaking up excess labour from other sectors of the economy, manufacturing is actually letting go of workers.

Return to Agriculture

  • India has seen a hike in the number of people “employed” in agriculture over the past year.
  • This is nothing but disguised unemployment.
  • Essentially, labourers and workers are returning to their rural homes in the absence of jobs either in manufacturing or services.

Why is Indian manufacturing failing to create jobs?

  • On the face of it, every past government has come out with a policy to boost manufacturing jobs. But still, the situation is getting worse.
  • There are different ways to look at this question.
  1. One is to look at why manufacturing has struggled to create as many jobs in the past
  2. The second is to look at the specific reasons why manufacturing has been bleeding jobs, instead of creating them, since 2016-17.

Let’s tackle the historical question first.

  • If one looks at any of the sectors in the economy — agriculture, industry, services — starting a manufacturing unit requires the highest amount of fixed investment upfront (relative to the output that may be generated later).
  • In other words, it is a big commitment on the part of an entrepreneur to put up a huge amount of money without necessarily knowing how it will all pan out.
  • What has traditionally made this truly risky is the highly extractive nature of governments.
  • In simpler terms, far too often governments have been corrupt, with officials and politicians extracting bribes.

Less focus on manufacturing goods

  • As regards the demand for manufacturing goods, experts point out that Indians have always consumed relatively less of manufacturing goods and relatively more of food and services.

There are two possible reasons for this.

  1. One, most Indians are quite poor and hence most of the income is spent on food.
  2. Two, repairs and maintenance are a very high part of our consumption choice.
  • In other words, when Indians buy a manufactured product — say a refrigerator — they tend to use it for much longer than in developed countries.

Core of the problem

  • The trouble lies with policymakers repeatedly neglecting the labour-intensive industries.
  • Since the second five year plan, the P C Mahalanobis strategy was to gain self-reliance by investing in capital intensive industries so that India does not have to import machines etc. from other countries.
  • The hope was that the demand from Indian consumers will make the domestic industry viable.
  • But Indian domestic demand was quite anaemic due to poverty levels.

Other policy lacunas

  • As against the capital intensive industries, which were involved in making heavy machines, the labour-intensive ones (such as leather, handicrafts, textiles etc.) were reserved for the small-scale industry framework.
  • But while the labour-intensive manufacturing firms could not match the capital-intensive firms in terms of GDP value or growth of output, they did have a distinct advantage of creating more jobs.
  • But, by treating them as small-scale industries, policies held back their growth.
  • Moreover, India did not push for integrating its labour-intensive manufacturing in the global supply chains by aggressively following exports.
  • Instead, the idea was to substitute imports in the name of self-reliance.

What has happened since 2016-17?

  • Things have become worse over the past five odd years despite the Indian government unveiling its ambitious Make in India (MII) initiative and the latest Production-Linked Incentive (PLI) scheme.
  • For one India is repeating the same mistakes with MII and PLI schemes.
  • They are again aimed more at capital intensive manufacturing, not labour intensive ones.
  • Moreover, India is reverting to the protectionist approach, aimed at self-reliance, yet again in recent years.
  • Further, much like in the past, this time, too, the domestic demand is weak for aggressively boosting labour-intensive industries aimed at capturing the export markets.

Conclusion

  • The growing rift in the fortunes of informal and formal manufacturing could be the reason why India is seeing such a massive decline in manufacturing jobs.
  • The government has tried its level best to push for greater formalization but it has often been accused of not understanding the nature and functioning of India’s informal economy.

Way forward

  • For the same level of employment, formality is good.
  • But if there is a trade-off between formality and employment generation, choosing formality may not be so beneficial. And this trade-off appears to be quite sharp in India.
  • Indian manufacturing is still at best hope for creating new jobs and soaking up excess unskilled labour through better infrastructure and easier regulatory support — to create millions of new jobs.

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Section 142 of the Social Security Code – 2020 Notified

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Section 142

Mains level: Paper 2- Section 142 of social security code

Aadhaar mandatory

  • The Union government has made Aadhaar mandatory for availing social security benefits, and for registration on a national informal workers’ database being developed for migrants.
  • The labour ministry has notified section 142 of the social security code.
  • It allows authorities to collect Aadhaar details for the database of beneficiaries under various social security schemes.
  • The move will be applicable to both formal and informal workers and may also help in curbing duplication of data by keeping imposters at bay, authorities said.
  • However, people who don’t have Aadhaar will not be denied of benefits, the ministry claims.

National informal workers’ database

  •  National database for unorganized workers is at an advanced stage of development by National Informatics Centre.
  • The portal is aimed at collection of data for unorganized workers, including migrant workers for the purpose of giving benefits of the various schemes of the government.
  • An inter-state migrant worker can register himself on the portal on the basis of submission of Aadhaar alone.

——————————————————//—————————————–

BACK2BASICS

  • The Code on Social Security, 2020 is a code to amend and consolidate the laws relating to social security with the goal to extend social security to all employees and workers either in the organised or unorganised or any other sectors.
  • The Social Security Code, 2020 brings unorganised sector, gig workers and platform workers under the ambit of social security schemes, including life insurance and disability insurance, health and maternity benefits, provident fund and skill upgradation, etc. The act amalgamates 9 central labour enactments relating to social security.
  • To access complete Act, you can click on the link given below:

https://labour.gov.in/sites/default/files/SS_Code_Gazette.pdf

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India’s migrant workers need better policies

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- Policy for migrant labourers and related issues

The article analyses the draft policy document for migrant labourers prepared by the NITI Aayog.

Draft policy by NITI Aayog

  • The Niti Aayog, on the request of the Ministry of Labour and Employment, has prepared an umbrella policy document for migrant labourers, including informal sector workers.
  • The draft policy makes significant strides in providing a perspective on recognising the magnitude and role of migrant workers, their problems and vulnerabilities, and the role and responsibilities of various stakeholders in addressing these.
  •  It states that a sound policy must be viewed from a “human rights, property rights, economic, social development, and foreign policy lens”.
  • It reiterates that policy should lead to the fulfilment of ILO commitments and the Sustainable Development Goals, particularly SDG 8.8 on the protection of labour rights and providing a safe and secure working environment for all workers, particularly migrants.

Portability of social protection to address vulnerabilities

  • The policy describes many sources of vulnerabilities of migrant labourers, ranging from their invisibility and political and social exclusion to informal work arrangements, exploitation and denial of labour rights, lack of collective voice, exclusion from social protection arrangements, formal skills, health, education, and housing.
  • Following from this, it identifies portability of social protection, voting rights, right to the city (the collective ownership and participation of citizens in cities they have helped build) and health, education and housing facilities as key issues to be dealt with.
  • It also reflects on the need for pro-poor development and provision of livelihoods in the source areas.

Governance structure

  • The draft policy proposes a governance structure with the Ministry of Labour as the nodal ministry and a dedicated unit under it which will act as a focal point for inter-ministerial and Centre-state coordination.
  • It also proposes mechanisms for coordinating the effort on inter-state migration, especially on principal migration corridors.
  • The policy document creates a framework under which migrant workers and their families can access entitlements and possibly work in a safer and better environment.

Issues need to be addressed

1) Failure to address cause of migration of labour

  • The National Commission for Rural Labour argued way back in 1991 that unequal development was the main cause of labour migration.
  • In the last three decades, disparities in development and inequalities have grown ceaselessly, calling for deep correctives.
  • Without such correction, migration and the adverse inclusion of migrants in labour markets is bound to grow unchecked.
  • The report falls short of acknowledging this.

2) Exclusion of migrants urban local governments

  • While the report correctly pinpoints the exclusion of migrants by urban local governments in the provision of basic entitlements, it fails to acknowledge the root cause of the lopsided urban development strategy.
  • The urban strategy has catered to national and global capital and the urban middle classes, marginalising the poor, particularly the migrants.

3) Denial of social security

  • The report also makes a false dichotomy between approaches which rely on cash transfers and special dispensations and a second approach which enhances the agency and capability of migrants and removes constraints on these.
  • The denial of the first approach has led the report to brush aside the migrants’ and informal workers’ right to social security.
  • Social security is acknowledged as a universal human right in international covenants to which India is a signatory and is given due place in the Constitution.
  • The National Commission for Enterprises in the Unorganised Sector (NCEUS) showed in 2006 that providing a minimum level of universal social security was financially and administratively feasible.
  • The Commission also recommended a universal registration system and issuance of smart social security cards, but its recommendations have unfortunately remained a dead letter.

4) Approach towards labour rights and labour policy

  • By putting grievance and legal redressal above regulation and enforcement on which it remains silent, the report puts the cart before the horse.
  • Surprisingly, the report does not take stock of the new labour codes, mentioning only the defunct laws that were subsumed by them.
  • The Codes accentuate the very problems — informality, precarity, the role of contractors and the lack of organisation — which the report itself describes.
  • The Codes, in promoting ease of business, have tilted the balance firmly in favour of capital.

Conclusion

In essence, the draft policy framework identifies the problems but fails to address the policy distortions which lie at their root. Hopefully, however, the draft will be opened up for further discussions and feedback to enrich and complete what is already a significant beginning.

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NITI Aayog’s Draft National Policy on Migrant Workers

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Migration pattern in India

Mains level: Welfare of the migrant workers

Spurred by the exodus of 10 million migrants from big cities during the Covid-19 lockdown, the NITI Aayog has prepared a draft national migrant labour policy.

Highlights of the Policy

  • The draft describes two approaches to policy design:
  1. To focus on cash transfers, special quotas, and reservations
  2. To enhance the agency and capability of the community and thereby remove aspects that come in the way of an individual’s own natural ability to thrive

A rights-based approach

  • The policy rejects a handout approach, opting instead for a rights-based framework.
  • It seeks to remove restrictions on the true agency and potential of the migrant workers.
  • The goal a/c to the document should not be to provide temporary or permanent economic or social aids”, which is “a rather limited approach”.
  • Migration, the draft says, should be acknowledged as an integral part of the development and government policies should not hinder but…seek to facilitate internal migration.

Issues with existing law

  • The 2017 report argued that specific protection legislation for migrant workers was unnecessary.
  • Migrant workers aren’t yet integrated with all workers as part of an overarching framework that covers regular and contractual work.
  • The report discussed the limitations of The Inter-State Migrant Workers Act, 1979, which was designed to protect labourers from exploitation by contractors by safeguarding their right to non-discriminatory wages.
  • It mentions that the Ministry of Labour and Employment should amend the 1979 Act for “effective utilization to protect migrants”.

Restructuring the institutions

The NITI draft lays down institutional mechanisms to coordinate between Ministries, states, and local departments to implement programmes for migrants.

  • Nodal agency: It identifies the Ministry of Labour and Employment as the nodal Ministry for implementation of policies, and asks it to create a special unit to help to converge the activities of other Ministries.
  • Resources centre: This unit would manage migration resource centres in high migration zones, a national labour Helpline, links of worker households to government schemes, and inter-state migration management bodies.
  • Migration corridors: On the inter-state migration management bodies, it says that labour departments of source and destination states along major migration corridors, should work together through the migrant worker cells.
  • Labour officers from source states can be deputed to destinations – e.g., Bihar’s experiment to have a joint labour commissioner at Bihar Bhavan in New Delhi.
  • Role for Panchayats: Alongside the long-term goal, policies should promote the role of panchayats to aid migrant workers and integrate urban and rural policies to improve the conditions of migration.
  • Migration management: Panchayats should maintain a database of migrant workers, issue identity cards and passbooks, and provide “migration management and governance” through training, placement, and social-security benefit assurance, the draft says.

Ways to stem migration

  • Even as it underlines the key role of migration in development, the draft recommends steps to stem migration.
  • The draft asks source states to raise minimum wages to bring a major shift in the local livelihood of tribal that may result in stemming migration to some extent.
  • The absence of community building organisations (CBO) and administrative staff in the source states have hindered access to development programmes, pushing tribals towards migration, the draft says.
  • The “long term plan” for CBOs and panchayats should be to “alleviate distress migration policy initiatives” by aiming “for a more pro-poor development strategy in the sending areas.

The importance of data

  • The draft calls for a central database to help employers “fill the gap between demand and supply” and ensures “maximum benefit of social welfare schemes”.
  • It asks the Ministries and the Census office to be consistent with the definitions of migrants and subpopulations, capture seasonal and circular migrants, and incorporate migrant-specific variables in existing surveys.
  • Both documents see limited merit in Census data that comes only once a decade.
  • It asked the National Sample Survey Office to include questions related to migration in the periodic labour force survey and to carry out a separate survey on migration.

Preventing exploitation

  • The policy draft describes a lack of administrative capacity to handle issues of exploitation.
  • State labour departments have little engagement with migration issues, and are in “halting human trafficking mode”, the draft says.
  • The local administration, given the usual constraints of manpower, is not in a position to monitor.
  • This has become the breeding ground for middlemen to thrive on the situation and entrap migrants which leads to potential exploitation and trafficking.

Specific recommendations

  • The draft asks the various ministries to use Tribal Affairs migration data to help create migration resource centres in high migration zones.
  • It asks the Ministry of Skill Development and Entrepreneurship to focus on skill-building at these centres.
  • The Ministry of Education should take measures under the Right to Education Act to mainstream migrant children’s education, to map migrant children, and to provide local-language teachers in migrant destinations.
  • The Ministry of Housing and Urban Affairs should address issues of night shelters, short-stay homes, and seasonal accommodation for migrants in cities.
  • The National Legal Services Authority (NALSA) and Ministry of Labour should set up grievance handling cells and fast track legal responses for trafficking, minimum wage violations, and workplace abuses etc.

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Drafting labour code keeping in mind the realities of informal sector workers

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Issues of the informal workforce

The article highlights the vulnerabilities of workers in the informal sector and also highlights the issues in the draft rules in the labour codes.

Context

  • The budget referred to the implementation of the four labour codes.
  • There is also a provision of Rs 15,700 crore for MSMEs, more than double of this year’s budget estimate.

Impact of pandemic on informal workers

  • India’s estimated 450 million informal workers comprise 90 per cent of its total workforce, with 5-10 million workers added annually.
  • Nearly 40 per cent of these employed with MSMEs.
  • According to Oxfam’s latest global report, out of the total 122 million who lost their jobs in 2020, 75 per cent were lost in the informal sector.
  • The National Human Rights Commission recorded over 2,582 cases of human rights violation as early as April 2020.

Issues with the draft rules in labour code

  • The rush to clear the labour codes and form the draft rules shows little to no intent on part of the government to safeguard workers.
  • The draft rules envisage wider coverage through the inclusion of informal sector and gig workers, at present the draft rules apply to manufacturing firms with over 299 workers.
  • This leaves 71 per cent of manufacturing companies out of its purview.
  • The draft rules mandate the registration of all workers (with Aadhaar cards) on the Shram Suvidha Portal to be able to receive any form of social security benefit.
  • This would lead to Aadhaar-driven exclusion and workers will be unable to register on their own due to lack of information on the Aadhaar registration processes.
  • A foreseeable challenge is updating information on the online portal at regular intervals, especially by the migrant or seasonal labour force.
  • It is also unclear as to how these benefits will be applicable in the larger scheme of things.

Neglect of informal sector

  • The draft rules fail to cater to the growing informal workforce in India.
  • The growing informal nature of the workforce and the lack of the state’s accountability makes it a breeding ground for rising inequality.
  • The workers face the risk of violations of their human and labour rights, dignity of livelihood, unsafe and unregulated working conditions and lower wages.

Consider the question “Assess the impact of covid pandemic on workers in the informal sector. Also examine the issues with the draft rules in the labour code.”

Conclusion

The Code on Social Security was envisaged as a legal protective measure for a large number of informal workers in India but unless the labour codes are made and implemented keeping in mind the realities of the informal sector workers, it will become impossible to bridge the inequality gap.

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India’s internal migration

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not Much

Mains level: Migration trends in India

This newscard presents data on India’s internal migration considering the mass exodus which was visible during the lockdowns.

The displacement of people during the imposition of lockdown has been described as the second-largest since the Partition of the country.

 

Also read:

[Burning Issue] Migrant workers amid COVID-19 outbreak

India’s internal migration

(1) Number of migrants

  • As of 2020, India has an estimated 600 million migrants. Roughly half of India is living in a place where it wasn’t born.
  • It would be roughly double the size of the fourth-largest nation on the planet — the United States.

(2) Nature of migration

  • The bulk of the internal migration in India is within one district itself. An estimated 400 million Indians “migrate” within the district they live in.
  • The next 140 million migrate from one district to another but within the same state.
  • And only about 60 million — that is, just 10% of all internal migrants — move from one state to another.

(3) Type of Migration

  • There are other misconceptions as well. Typically, it is thought that most migration happens when people from rural areas move to urban areas.
  • That is incorrect. The most dominant form of migration is from rural to rural areas.
  • Only about 20% of the total migration (600 million) is from rural to urban areas.
  • In fact, 20% of the total migration is from one urban area to another urban area.
  • As such, urban migration (rural to urban as well as urban to urban) accounts for 40% of the total migration.

(4) Comparison with other countries

  • India’s proportion of internal migrants (as a percentage of the overall population) is much lower than some of the comparable countries such as Russia, China, South Africa and Brazil.
  • All have much higher urbanisation ratios, which is a proxy for migration level.
  • In other words, as India adopts a strategy of rapid urbanisation, levels of internal migration will increase further.

Impact of COVID

The reality of a migrant worker’s existence is much more complicated than those sharply defined numbers.

Not all migrants were equally affected

  • The worst-hit were a class of migrants that felt under the group “vulnerable circular migrants”.
  • These are people who are “vulnerable” because of their weak position in the job market and “circular” migrants because even though they work in urban settings, they continue to have a foothold in the rural areas.
  • Such migrants work in construction sites or small factories or as rickshaw pullers in the city but when such employment avenues dwindle, they go back to their rural setting.
  • In other words, they are part of the informal economy outside agriculture.

“Data insufficient”

  • The truth is that even now all the estimates mentioned above are individual estimates.
  • The official data — be it the Census or the National Sample Survey — is more than a decade old.
  • In fact, Census 2011 migration data was made publicly available only in 2019.

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[pib] SAKSHAM Portal

Note4Students

From UPSC perspective, the following things are important :

Prelims level: SAKSHAM portal

Mains level: MSMS sector and its job potential

The Technology Information, Forecasting and Assessment Council (TIFAC) has launched SAKSHAM, a dynamic job portal for mapping the skills of Shramiks.

The name SAKSHAM closely leans towards HRD, Employment and Entrepreneurship developments.  Make a note of it. It can create confusion while revision.

SAKSHAM

  • SAKSHAM is an acronym for Shramik Shakti Manch.
  • The portal with the demand and supply data uses an algorithm and AI tools, for geospatial information on demand and availability of Shramiks, and also provides analysis on skill training programmes of Shramiks.
  • It would directly connect Shramiks with MSMEs and facilitate placement of blue-collar jobs.
  • The pilot portal originally initiated with two districts is now being launched as an all India portal.

Key features

  • A dynamic job portal – an opportunity for Shramiks and MSMEs
  • Facilitate the creation of 10 lakh blue-collar jobs
  • Direct connect between Shramiks and MSMEs, no middleman in between
  • Minimise migration of Shramiks – job opportunity in proximate MSMEs

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Centre’s new labour codes to allow 4-day work per week

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Various labour laws

Mains level: 4-day work and its benefits

The Centre under its new labour codes would soon provide an option for organisations to allow their employees to work for four days in a week.

What is the news?

  • The proposed new labour codes could provide companies with the flexibility of four working days in a week.

What does this mean?

  • The working hour’s limit of 48 hours for a week will remain unchanged.
  • This implies that there will be long working hours if the working days are reduced.
  • Having a reduced number of working days does not mean a cut in paid holidays.
  • Therefore, when the new rules will provide the flexibility of four working days, it would imply three paid holidays.

Roll out of the proposal

  • The Ministry of Labour and Employment is likely to complete the process to finalise the rules for four labour codes soon.
  • The provision of flexibility to have reduced working days of four days in the labour code rules will mean that companies will not require prior government nod to enact it.

Why such a move?

  • The well-being of employees improves with less workload. Working parents can spare more time for the childcare.
  • It helps the economy and the environment since power and fuel consumption is reduced.

Ahead of Labour reforms

  • The ministry is in the final phase of amalgamating 44 central labour laws into four broad codes.
  • The four Codes include- Code on Wages, Industrial Relations, Occupational Safety, Health and Working Conditions (OSH) and Social Security Codes.

 

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Quality gigs, a solution to urban unemployment

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Unemployment

Mains level: Paper 3- Support to gig workers

With the lack of NREGA equivalent in the urban area government has to find ways to provide income support and employment. The article suggests ways to do the same.

Slowdown in employment recovery

  • The Indian economy has been gradually recovering from historic contraction of negative 23.9%.
  • This recovery has shifted focus away from the employment question, considered resolved after a sharp rally following the collapse in employment numbers in April.
  • More recent data from the Centre for Monitoring Indian Economy, however, point to a gradual slowdown in employment recovery.

NREGA: employment support in rural area

  • For labour coming back to rural India, employment support came in the form of the National Rural Employment Guarantee Scheme (NREGA), which witnessed a 243% increase in person workdays.
  • This increased dependency on NREGA, has seen the Rural Development Ministry spend nearly 90% of its increased ₹86,4000 crore allocation by the month of November.
  • In several Indian cities, however, closed businesses have meant that millions of workers have either had to leave or have had to take up new forms of work.

Supporting gig workers

With no urban equivalent to the NREGA on the horizon, there must be an increased impetus on evaluating, regulating and supporting new forms of employment.

1) Evaluation

  •  Our current understanding of gig work is based on the limited disclosures made by the platforms themselves.
  • Furthermore, most regulators continue to remain in the dark on basic questions surrounding platform labour.
  • As of now, there exists no authoritative estimate on the total number of gig workers in India.
  • The centralised nature of the platforms and the larger platform labour market should make the collating of this data relatively straightforward for the Labour Ministry.

2) Regulation

  • The next step is significantly more sensitive and involves regulation.
  • The reason for the sensitivity primarily revolves around the varied nature of gig work.
  • While some workers use these platforms as a “side hustle”, for others it continues to serve as a primary source of employment.
  • This dynamic is further complicated by the risk of a one-size-fits-all regulatory strategy.
  • Such regulatory strategies are unintentionally hurting the similar, yet distinct, market for highly skilled (and highly paid) freelancers.

Way forward

  • A more viable strategy then would involve conditional government partnerships with platforms under some of its flagship schemes.
  • The successful pilot of Swiggy’s Street Food Vendors programme under the PM SVANidhi, or PM Street Vendor’s Atma Nirbhar Nidhi scheme, may prove to be an illustrative example.
  •  Creation of jobs, alongside the voluntary adoption of quality standards, is an example of a mutually beneficial partnership between the state and platforms.
  • Similar collaborations on urban employment, that require labour platforms to comply with disclosure norms and worker compensation standards to access government support, could create jobs while ensuring compliance.
  • Collaborating with platforms to employ workers, would bring down costs significantly (for both the state and their partners)  it would also create an environment where firms would be more likely to cooperate with the state.

Conclusion

Limited fiscal space and a growing need to fuel the country’s consumption base, must push the government to build symbiotic relationships with new partners.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Fixed-term employees

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Labour codes

Mains level: Paper 2- Challenges of contractual labour despite the provision of fixed-term employment

The recent incident of violence at the iPhone manufacturing factory brought into focus the issue of contract labour. The article explains the reasons for its persistence despite the provision of fixed-term employment.

Difference between a contract worker and fixed-term worker

  • Contract workers, who are hired via an intermediary (contractor) and are not on the payrolls of the company on whose shop floors they work.
  • Fixed-term employees can be directly hired by employers without mediation by a middleman.
  • They are ensured of the same work hours, wages, allowances, and statutory benefits that permanent workers in the establishment are entitled to.
  • Employers are not required to provide retrenchment benefits to fixed-term employees.
  • With an aim to discourage the use of contract workers the government introduced the option of fixed-term employment in the Code on Industrial Relations (2020).

Issues with the provision of fixed-term employment

  • Fixed-term employment in India is indeed quite open-ended.
  • The Code does not specify a minimum or maximum tenure for hiring fixed-term employees.
  • Nor does it specify the number of times the contract can be renewed.
  • The absence of such safeguards can lead to an erosion of permanent jobs.
  • Workers may find themselves moving from one fixed-term contract to another, without any assurance of being absorbed as permanent workers by their employer.

So, why firms still hire contract workers?

  • The cost of hiring contract workers continues to remain lower than the cost of hiring fixed-term employees. who are required to be paid pro-rata wages and social security including gratuity.
  • In addition, the monitoring, legal compliance, and litigation costs are shifted onto the contractor in case of contract workers, thereby reducing the transaction costs of recruitment to firms.
  • To encourage a shift away from contract workers to fixed-term employees, the government should have completely prohibited the use of contract labor in core activities
  • Instead of completely prohibiting contract workers in core activities the Labour Code on Occupational Safety and Health has allowed it under certain conditions.
  • Such a provision encourages the use of contract workers, undermining the initiative of introducing fixed-term employment.

Using PLI and Atmanirbhar Bharat to boost formal job creation

  • The production linked incentive scheme (PLI) offers government subsidies for a limited period which is five years for mobile handsets.
  • The objective of the PLI scheme is to create “good jobs”.
  • It may have been more useful to link these incentives for which a financial outlay of Rs 1.45 lakh crore has been approved over five years for 10 sectors explicitly to job creation.
  • Significantly, under the Atmanirbhar Bharat Rozgar Yojana, the government is offering provident fund subsidies to employers for hiring new formal workers.
  • Both these programs could jointly be leveraged to give a big boost to formal job creation in the manufacturing sector.

Consider the question “Examine the reasons for the persistence of contractual labour despite the option of fixed-term employment. Also suggest the ways to increase the employment opportunities that are secure.” 

Conclusion

The government should focus on the creation of employment opportunities that are secure through policies and laws.

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Provisions for platform workers in the labour code and issues with them

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Provision in labour codes

Mains level: Paper 2- Provisions for gig workers and platform workers in the labour codes

The article examines the provision made for the platform workers and the gig workers in the labour codes passed by the Parliament recently and explains the issues with it.

Context

  • The three new labour codes passed by Parliament recently acknowledge platform and gig workers as new occupational categories in the making.

Definition issue

  • The specific issues of working in factories, the duration of time needed on a factory floor, and associated issues are recognised as the parameters for defining an ideal worker.
  • The Code on Wages, 2019, tries to expand this idea by using ‘wages’ as the primary definition of who an ‘employee’ is.
  • Yet, the terms ‘gig worker’, ‘platform worker’ and ‘gig economy’ not defined with in connection with their wages.
  • The new Code on Social Security allows a platform worker to be defined by their vulnerability — not their labour, nor the vulnerabilities of platform work.

Issues with the code

  • Since the laws are prescriptive, what is written within them creates the limits to what rights can be demanded, and how these rights can be demanded.
  • Platform delivery people can claim benefits, but not labour rights.
  • This distinction makes them beneficiaries of State programmes.
  • This does not allow them to go to 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 lapses[ ex. choice of pay, work hours etc].

Benefits with no guarantee

  • In the Code on Social Security, 2020, platform workers are now eligible for benefits like maternity benefits, life and disability cover, old age protection, provident fund, employment injury benefits, and so on.
  • None of these are secure benefits.
  • This means that from time to time, the Central government can formulate welfare schemes that cover these aspects of personal and work security, but they are not guaranteed.
  • Actualising these benefits will depend on the political will at the Central and State government-levels and how unions elicit political support.
  • The language in the Code is open enough to imply that platform companies can be called upon to contribute either solely or with the government.

Consider the question “What are the provisions for gig workers and platform workers in the new labour code? What are the issues with the provision?”

Conclusion

The ‘platform worker’ identity has the potential to grow in power and scope, but it will be mediated by politicians, election years, rates of under-employment, and large, investment- heavy technology companies that are notorious for not complying with local laws.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Labour code reforms address basic needs

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Various provisions of labour code

Mains level: Paper 2- Labour code reforms

The article highlights the key provision of the labour code and how it will help in removing the various hurdles faced by the key stakeholders.

Increase in the threshold for closure/lay-off and its impact

  • The Industrial Relations Code 2020 increased the threshold for retrenchment/closure or lay-off without requiring government approval, from 100 to 300 workers.
  • This will help in addressing the matter of expansion of the firms.
  • In 2014, Rajasthan had increased the threshold of taking prior permission of the government before retrenchment.
  • The reform has helped firms to set up larger operations in Rajasthan, and the same amendment was followed by 15 states.

Fixed Term Employment(FTE): Ensuring flexibility and tackling exploitation

  • In many jobs employees are required for a few months such as infrastructure projects, textiles and garments, food and agro-processing, etc.
  • However, the contractual employment workforce is quite often exploited with respect to wages, social security, and working conditions as well as welfare facilities.
  • Fixed Term Employment is an intervention to enable the hiring of employees directly instead of hiring through contractors, which will ensure flexibility.
  • For employees, all statutory entitlements and service conditions equivalent to those of a regular employee have now been made applicable.
  • The Code on Industrial Relations also extends the benefit of gratuity even for an FTE contract of one year, which is five years in the case of regular employees.

Strengthening the formal economy

  • The inclusion of the gig and platform workers in the Social Security Code 2020 is a step towards strengthening the formal economy.
  • The provision for insurance coverage has been extended to plantation workers, and free annual health check-ups and a bipartite safety committee has been introduced for establishments such as factories, mines and plantation sectors in place of hazardous factories.
  • The ESIC and EPFO requirements will now apply to establishments employing less than 10 and 20 workers respectively on a volunteer basis.

Ensuring female labour force participation

  • Falling women’s workforce participation in India has been a matter of concern for a long time.
  • Female labour force participation is a driver of growth and, therefore, participation rates indicate the potential for a country to grow more rapidly.
  • The new Code ensures the employment of women in night shifts for all types of work.

Expansions of the provisions for migrant workers

  • The Occupational Health, Safety & Working Conditions Code expands the definition of a migrant worker.
  • The expanded definition includes workers who would be directly employed by the employer besides those employed through a contractor.
  • Also a migrant, who comes on his own to the destination state, can declare himself a migrant worker by registering on an electronic portal.
  • Registration on the portal has been simplified and there is no requirement of any other document except Aadhaar.
  • For de-licencing/de-registration, it is mandated to notify registering officers about the closure of their establishment and certify payment of dues to all employed workers.
  • This will ensure that workers will not be exploited even during the closure of the concerned establishment.

Other provisions

  • The introduction of a concept of conducting web-based inspections can be seen as an attempt of matching corporate needs in the digital world.
  • The provision for a 14-day notice period before strikes and lockdowns would allow both workers and employers to attempt resolving the issues.
  •  The codes also promote lifelong learning mechanism to match the evolving skill sets required for technology and process changes through the introduction of a reskilling fund.

Consider the question “What are the various provision added in the three labour code and how it will help revive the economy and tackle barriers in the expansion of firms?”

Conclusion

The reform measures address basic needs — to revive the economy and tackle barriers in the expansion of firms. Moreover, they promote the employment of women as well as reskilling of the workforce for the deployment of migrants.

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Changes in the labour laws needs to discussed and debated

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Labour Code Bills

Mains level: Paper 2- Issues with the labour laws

Increase in the jobs without employment security

  • Between 2004-05 and 2017-18, the share of salaried workers outside agriculture without any written contract increased from 60 per cent to 71 per cent.
  • Even in private and public limited companies, this share increased from 59 per cent to 71 per cent.
  • In the government and the public sector the share of such workers increasing from 27 per cent to 45 per cent over the period.
  • Many of the wage jobs in the organised sector came through contractors.
  • In organised manufacturing, the reported share of contract labour increased from 13 per cent in 1995-06 to 36 per cent in 2017-18.

Policy response

  • A policy to deal with the problem of employment security was much needed.
  • The response came in the form the three revised labour Code Bills — on Industrial Relations, Occupational Safety, Health and Working Conditions, and Social Security.
  • These were introduced in Parliament in the Monsoon Session, and approved on September 23.
  • These three labour codes, along with the Code on Wages approved earlier, touch the lives of every Indian worker.

 “Fixed term” worker

  • In 2018, the government amended the Standing Orders on Employment Act and introduced the category of “fixed term” worker.
  • That category creates a permanent cadre of temporary workers, with no prospects of career growth and job security.

Changes and issues with the Bills

  • 1) Government had rationalised fixed-term employment by arguing that industries had resorted to the third-party engagement of contract labour to get around the rigidities in firing workers.
  • But that has not stopped the Codes from further liberalising the provisions relating to employment of contract labour and making their regulation applicable only in establishments employing 50 or more workers, instead of 20 or more.
  • 2) The key provisions which regulate the employment of inter-state migrant workers have been further diluted and made applicable only to establishments employing 10 or more such workers, compared to five earlier.
  • 3) Along with the provisions of retrenchment, the applicability of the Standing Orders, which regulate the categorisation as well as the terms of employment of workers in establishments, has also been raised from 100 to 300 workers.
  • 4) The threshold for factories has now been doubled — from 10 to 20 workers with power — thereby eliminating a large number of important regulatory provisions for the smaller factories.
  • 5) Relevant governments have been given much more leeway in exempting establishments from the applicability of a whole range of provisions in the Code.
  • 6) Inspection provisions have been diluted in all the Codes and will no longer even be complaints based.
  • 7)  The changes have also made legal industrial action a virtual impossibility, and the presence of unions less possible.

Conclusion

Informality contributes to inequality and to conditions which make sustainable growth impossible, and economic recovery more difficult. It also creates conditions in which employers under-invest in workers’ capacities and workers are not invested in a company’s future — leading to low productivity and lack of competitiveness.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Code on Wages 2019

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2-Issues with the Code on the Wages

The article discusses the issues in the Code on Wages (yet to be notified) 2019 and how it fails to achieve what it seeks to achieve.

Code on Wages 2019

  • The Code on Wages, 2019 seeks to consolidate and simplify four pieces of legislation into a single code. These 4 legislations are-
  • 1) Payment of Wages Act, 1936.
  • 2) Minimum Wages Act, 1948.
  • 3) Payment of Bonus Act, 1965.
  • 4) Equal Remuneration Act, 1976.
  • Its object and reasons stated that even the Second National Commission on Labour- 2002 suggested consolidating all labour laws into four codes.

Issues with the consolidation

  • While the previous four pieces of legislation had a total of 119 sections, the new Code has 69 sections.
  • Any consolidation will impact the length of the sections.
  • Further, all requirements for enforcing the Act, have been relegated to the Rules.
  • As a result, the delegated pieces of legislation (Rules) will be bigger than the Code; this is no way to condense prior pieces of legislation.
  • All the four repealed pieces of legislation were enacted historically at different points in time and to deal with different situations.
  • The combining of asymmetrical laws into a single code is not an easy task and will only create its own set of new problems.
  • The central government will have the power to fix a “floor wage”.
  • Once it is fixed, State governments cannot fix any minimum wage less than the “floor wage”.
  •  The concept should be for a binding minimum wage and not have dual wage rates — a binding floor wage and a non-binding minimum wage.
  • Neither the Code nor the Rules (presently, draft Rules) prescribe the qualifications and experience required for appointment of competent authority.
  • Anew provision (Section 52) has been introduced where an officer will be notified with power to impose a penalty in the place of a judicial magistrate.
  • An essential judicial function is now sought to be vested with the executive in contravention of Article 50 of the Constitution.

Issue of MGNREGA wages

  • There were cases as to whether the Minimum Wages Act would have an over-riding effect over the provisions of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005.
  • Several High Courts have placed the Minimum Wages Act to override MGNREGA.
  • That has been set to rest by excluding MGNREGA from the purview of the Code on Wages.
  • That has been set to rest by excluding MGNREGA from the purview of the Code on Wages.

Conclusion

The Code on Wages (yet to be notified) has neither succeeded in consolidation of laws nor will it achieve the expansion of the coverage of workers in all industries in the unorganised sector.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

New versions of labour codes – key proposals and concerns

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not Much

Mains level: Labour reforms

The government has introduced new versions of three labour codes – Industrial Relations Code Bill, 2020, Code on Social Security Bill, 2020 and Occupational Safety, Health and Working Conditions Code Bill, 2020.

Try this PYQ:

Q.Disguised unemployment generally means:

(a) A large number of people remain unemployed

(b) Alternative employment is not available

(c) Marginal productivity of labour is zero

(d) Productivity of workers is low

What are the key proposals?

(1) Industrial Relations Code Bill, 2020

  • In this, the government has proposed to introduce more conditions restricting the rights of workers to strike, alongside an increase in the threshold relating to layoffs and retrenchment.
  • The Code has raised the threshold for the requirement of a standing order — rules of conduct for workmen employed in industrial establishments — to over 300 workers.
  • This implies industrial establishments with up to 300 workers will not be required to furnish a standing order, a move which experts say would enable companies to introduce arbitrary service conditions for workers.
  • These steps are likely to provide more flexibility to employers for hiring and firing workers without government permission.

(2) Social Security Code

  • It proposes a National Social Security Board which shall recommend to the central government for formulating suitable schemes for different sections of unorganised workers, gig workers and platform workers.
  • Also, aggregators employing gig workers will have to contribute 1-2 per cent of their annual turnover for social security, with the total contribution not exceeding 5 per.

(3) Occupational Safety, Health and Working Conditions Code

  • This code has defined inter-state migrant workers as the worker who has come on his own from one state and obtained employment in another state, earning up to Rs 18,000 a month.
  • The proposed definition makes a distinction from the present definition of only contractual employment.
  • The Code, however, has dropped the earlier provision for temporary accommodation for workers near the worksites.
  • It has though proposed a journey allowance — a lump sum amount of fare to be paid by the employer for to and fro journey of the worker to his/her native place from the place of his/her employment.

What are the other proposals for workers?

  • The IR Code Bill has also proposed a worker re-skilling fund.
  • The contributions for the fund are only detailed from the employer of an industrial establishment amounting to fifteen days wages last drawn by the worker immediately before the retrenchment along with the contribution from such other sources.
  • The mention of ‘other sources’ for funding the re-skilling fund is vague.

What are the concerns raised over the new labour codes?

  • Analysts say the increase in the threshold for standing orders will water down the labour rights for workers in small establishments having less than 300 workers.
  • The increase is uncalled for and shows the government is very keen to give tremendous amounts of flexibility to the employers in terms of hiring and firing.
  • Dismissal for alleged misconduct and retrenchment for economic reasons will be completely possible for all the industrial establishments employing less than 300 workers.
  • The Industrial Relations Code also introduces new conditions for carrying out a legal strike.
  • The time period for arbitration proceedings has been included in the conditions for workers before going on a legal strike as against only the time for conciliation at present.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Labour law Reforms

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Various labour laws

Mains level: Labour reforms in India

This session of Lok Sabha has passed 3 Historic and path-breaking Labour Codes.

UPSC may ask the major laws subsumed under these Labour Codes.

What are the 3 bills?

The 3 bills which were passed are

  1. Industrial Relations Code, 2020
  2. Code on Occupational Safety, Health & Working Conditions Code, 2020 &
  3. Social Security Code, 2020

All the labour laws (29 in number) being amalgamated into 4 labour codes are :

Name of the Code 

Amalgamated laws

Wage Code

 

4 laws –

  1. The Payment of Wages Act, 1936
  2. The Minimum Wages Act, 1948
  3. The Payment of Bonus Act, 1965
  4. The Equal Remuneration Act, 1976
IR Code

 

3 laws –

  1. The Trade Unions Act, 1926
  2. The Industrial Employment (Standing orders) Act, 1946
  3. The Industrial Disputes Act, 1947
OSH Code

 

13 laws –

  1. The Factories Act, 1948
  2. The Plantations Labour Act, 1951
  3. The Mines Act, 1952
  4. The Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955
  5. The Working Journalists (Fixation of Rates of Wages) Act, 1958
  6. The Motor Transport Workers Act, 1961
  7. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966
  8. The Contract Labour (Regulation and Abolition) Act, 1970
  9. The Sales Promotion Employees (Conditions of Service) Act, 1976
  10. The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979
  11. The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981
  12. The Dock Workers (Safety, Health and Welfare) Act, 1986
  13. The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996
Social Security Code

 

9 laws –

  1. The Employees’ Compensation Act, 1923
  2. The Employees’ State Insurance Act, 1948
  3. The Employees Provident Fund and Miscellaneous Provisions Act, 1952
  4. The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
  5. The Maternity Benefit Act, 1961
  6. The Payment of Gratuity Act, 1972
  7. The Cine Workers Welfare Fund Act, 1981
  8. The Building and Other Construction Workers Welfare Cess Act, 1996
  9. The Unorganised Workers’ Social Security Act, 2008

 

Here are the key features of these bills:

 (A) Social Security Code, 2020

  • The facility of ESIC would now be provided in all 740 districts. At present, this facility is being given in 566 districts only.
  • EPFO’s coverage would be applicable on all establishments having 20 workers. At present, it was applicable only on establishments included in the Schedule.
  • Provision has been made to formulate various schemes for providing comprehensive social security to workers in the unorganised sector.
  • A “Social Security Fund” will be created on the financial side in order to implement these schemes.
  • Work to bring newer forms of employment created with the changing technology like “platform worker or gig worker” into the ambit of social security has been done in the Social Security Code.
  • Provision for Gratuity has been made for Fixed Term Employee and there would not be any condition for minimum service period for this.
  • With the aim of making a national database for unorganised sector workers, registration of all these workers would be done on an online portal and this registration would be done on the basis of Self Certification through a simple procedure.

 (B) Occupational Safety, Health & Working Conditions Code, 2020

  • Free health checkup once a year by the employer for workers which are more than a certain age.
  • A legal right for getting Appointment Letter given to workers for the first time.
  • Cine Workers have been designated as Audio Visual Worker so that more and more workers get covered under the OSH code. Earlier, this security was being given to artists working in films only.

(C)  Industrial Relations Code, 2020

Efforts made by the Government for quickly resolving disputes of the workers include:

  • Compulsory facility for Helpline for redressal of problems of migrant workers.
  • Making a national database of migrant workers.
  • Provision for the accumulation of one day leave for every 20 days worked when work has been done for 180 days instead of 240 days.
  • Equality for women in every sphere: Women have to be permitted to work in every sector at night, but it has to be ensured that provision for their security is made by the employer and consent of women is taken before they work at night.
  • In the event of the death of a worker or injury to a worker due to an accident at his workplace, atleast 50 % share of the penalty would be given. This amount would be in addition to Employees Compensation.
  • Provision of “Social Security Fund” for 40 Crore unorganized workers alongwith GIG and platform workers and will help Universal Social Security coverage
  • Occupational Safety & Health Code to also can now over cover workers from IT and Service Sector.
  • 14 days notice for Strike so that in this period amicable solution comes out.

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Urban unemployment in India

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Issue of employment in India

The article discusses the issue of vulnerability of informal jobs in India and suggests the steps to address the problem.

The urban unemployment in India crept up to 9.83% in August as against 9.15% in July, according to monthly unemployment data released Tuesday by the Center for Monitoring Indian Economy (CMIE). In other words, roughly one in every 10 person in urban areas cannot find work

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Boosting demand with wage hike

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Issue of wage growth

The article discusses the threat posed to the Indian economy by the subdued demand following the return of the labourers to their urban jobs.

Rural employment issue

  • About 30 million migrant workers rushed home to their villages during the pandemic.
  • About 60 per cent of out-migration from rural India is aspiration-led.
  • Income earned in urban jobs is 2.5 higher than earned in rural area.
  • Though rural economy has been recovering faster than the urban economy, this optimism could prove short-lived, as eventually the more long-lasting determinants of rural wages could prevail.

What are the determinants of rural wages

1) NREGA wages

  • The government has raised the rural employment guarantee programme (NREGA) wages and outlays.
  • Demand for the scheme is outpacing supply.
  • This demand-supply mismatch means that it may not be an effective driver of higher rural wages.

2) Low construction activities

  • Many rural Indians, especially those without land, have become building labourers.
  • 70 per cent of construction is related to real estate and property developers are dependent on funding from struggling non-banking financial companies.
  • Until this type of lending restarts, construction may not normalise.
  • And that means rural wages may not rise quickly either.

3) Rising debt level

  • The increase in borrowing and fall in inflation over the last few years has increased the “real” indebtedness of rural Indians.
  • This affected particularly the landowners who pay villagers to farm their land.
  • This is likely to hurt their ability to pay high wages.

3 Reasons why wage outlook could be dimmer

  • As migrant labours start to return to their urban jobs, their wage outlook appears to be bleak for 3 reasons.
  • 1) As during demonetisation, workers could find jobs again, but at lower wages.
  • 2) There could be a second-round of pandemic-led labour market weakness, driven by job losses and falling wages from the first round.
  •  3) We find that both rural and urban wages are driven by economic growth, India’s post-pandemic medium-term growth falling by one percentage point to 5 per cent does not bode well.

Way forward

  • Weak wages could keep demand subdued. To offset this policymakers have an important role to play.
  • 1) In particular, policymakers may have to ensure that capital is allocated efficiently.
  • After all, investment is the only way to increase the economy’s capacity to create well-paying jobs.
  • 2) Bringing back investment growth would also involve capital re-allocation.
  • This means taking it away from sectors that are not working and redeploying it in sectors that are.
  • Improving the Insolvency and Bankruptcy Code procedure is a key step here.
  • 3) Another important step is to improve the health of banks as they are the ones allocating capital by giving loans.
  •  Implementation of the 5-Rs — recognition, restructuring, resolution, recapitalisation and reforms — for the banking sector may be particularly useful here.

Consider the question “After supply-side disruption is over, India’s growth may suffer from the subdued wage growth. Suggest the steps to avoid this from happening.”

Conclusion

Supply disruption caused by reverse migration won’t last long, but led by lower wages, demand could remain weak, requiring policy intervention.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

National Recruitment Agency: Taking jobs closer to people

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- National Recruitment Agency

Recruitment reform in the form of National Recruitment Agency will resolve many issues faced by the youth appearing for the multiple government exam.

Context

  • On average, 2.5-3 crore candidates appear for about 1.25 lakh vacancies in the central government every year.
  • But from next year, the NRA will conduct the CET and based on the score, one can apply for a vacancy with the respective agency.

NRA: Composition and functioning

  • The NRA will have representatives from the Ministry of Railways, Ministry of Finance/Department of Financial Services, Staff Selection Commission (SSC), Railway Recruitment Boards (RRBs) and Institute of Banking Personnel Selection (IBPS).
  • A multi-agency body, the NRA will conduct a Common Eligibility Test (CET) to screen/shortlist candidates for the Group B and C (non-technical) posts.
  • The NRA shall conduct a separate CET each for the three levels of graduate, higher secondary (12th pass) and the matriculate (10th pass) candidates for those non-technical posts to which recruitment is presently carried out by the SSC, RRBs and IBPS.

How it will benefit youth

  • It will eliminate multiple tests and save time as well as resources.
  • It will give a big boost to transparency.
  • The multiple recruitment examinations are a burden on the candidates, as also on the respective recruitment agencies, involving avoidable/repetitive expenditure, law and order/security-related issues and venue-related problems.
  • The NRA is a combination of convenience and cost-effectiveness for candidates.
  • Examination centres in every district would greatly enhance access to the candidates located in far-flung areas, with a special focus on creating examination infrastructure in the 117 Aspirational Districts.
  • This will prove a great boon to crores of aspirants residing in hilly, rural and remote areas and most importantly, for female candidates.
  • Taking job opportunities closer to the people is a radical step that would greatly enhance ease of living for the youth.

Consider the question “Recruitment reform in the form of National Recruitment Agency is a radical step that would greatly enhance ease of living for the youth.”

Conclusion

Taking job opportunities closer to the people is a radical step that would greatly enhance ease of living for the youth.

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Three areas to work on to put India on the path to growth

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3-Areas to put work on to put India on the path of growth

The article suggests the three areas on which country should work on to make it resilient in the future. These three areas include the labour laws for informal employment, conditions of our cities and the strength of our rural economy.

Background

  • The Prime Minister, while addressing the Confederation of Indian Industry (CII) annual meeting urged to think big and partner with the government in putting India on the path to growth.
  • There is much that we can be achieved if government and industry work towards the same objective, and in a spirit of mutual trust.

Let’s look into some areas

1) Employment

  • Over 85 per cent of employment in India is in the informal sector.
  • The Centre for Monitoring the Indian Economy (CMIE) estimates that between mid-March and mid-April, 120 million people lost their jobs.
  • With this unemployment rise to an all-time high of 27 per cent.
  • There was reverse migration on an unprecedented scale — some 10 million people abandoned cities to return to their native villages.
  • As economic activity has restarted in cities, CMIE reports that unemployment is now down to around 9 per cent.

3 Problems we must address

1) Need for labour regulation

  • We have stringent labour laws to protect workers, but this covers only the 15 per cent formal sector employment.
  • The 85 per cent of our workforce who are informally employed have almost no protection, and employers have almost complete flexibility.
  • We need to address both the formal and informal labour spectrum to get the balance right between flexibility and protection for all labour.

Way forward

  • Everyone must have a minimum level of protection, and every employer a minimum level of flexibility.
  • This calls for a new social contract to define a well-calibrated social security system.
  • This huge project demands good faith and strong leadership by industry, labour and government.

2) Living conditions of our cities

  • We need a massive private home-building programme.
  • It probably needs much more liberal land-use regulations — our cities have among the least generous floor-space indices (FSI) in the world.
  • New York, Hong Kong, and Tokyo have an FSI five times Mumbai’s.
  • Again, this is a multi-year project, and it involves state and city governments partnering with private developers.
  • India is unique in having 70 per cent of our population still residing in rural areas.
  • We must encourage the migration of people to higher productivity occupations in our cities.
  • And we must ensure that clean, affordable and accessible housing is available for all in our cities.

3) Strength of our rural economy

  • Reverse migration is also an opportunity to collaborate in spreading the geography of development.
  • We need a three-pronged approach:
  • 1) As Ashok Gulati has often argued, the easiest way to grow farmer incomes is by having them grow more value-added crops.
  • Exports of fruits and vegetables must be consistently encouraged.
  • The cultivation of palm plantations with potential for huge import substitution, we need corporate farming as the gestation period of seven years for the first crop is too much for the average farmer to handle.
  • The Atmanirbhar agricultural reforms, which permit contract farming, and open up agricultural markets, are major medium-term reforms. Implemented right, they can transform agricultural markets.
  • 2) We need to encourage agro-processing near the source.
  • Fostering entrepreneurship in rural and semi-urban areas would combine nicely with local processing.
  • 3) We need to invest even more massively in rural connectivity.
  • Today, we would add digital connectivity to road connectivity to level the playing field for all regardless of where they live.

Consider the question “What are the vulnerabilities in our economic structure that were highlighted by the covid pandemic? Also suggest the measures to make our rural economy strong and resilient to such shocks.”

Conclusion

The task is huge, and only collaboration between all levels of government (Union, state, and city) and our dynamic private sector can hope to make substantial progress.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Job Losses during Lockdown

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not Much

Mains level: Coronovirus induced job-losses

The data by the Centre for Monitoring Indian Economy (CMIE) briefs us about the job losses due to lockdown restrictions imposed because of the COVID pandemic.

We can utilize this data as examples for answer writing.

CMIE data on job losses

  • Salaried jobs: They suffered the biggest hit during the lockdown, with a total loss estimated to be at 18.9 million during April-July.
  • Informal and non-salaried jobs: They have shown improvement during the same period increasing to 325.6 million in July from 317.6 million last year, an increase of 2.5 per cent.
  • Small traders, hawkers and daily wage labourers: They were the worst hit by the lockdown in April, comprising 91.2 million of the jobs lost from the total loss of 121.5 million in that month.
  • Farm employment: A sharp rise was seen in June to 130 million, with good rains and the consequent sowing absorbing a lot of the labour that was lost in non-farm sectors.

About CMIE

  • CMIE, or Centre for Monitoring Indian Economy, is a leading business information company.
  • It was established in 1976, primarily as an independent think tank.
  • CMIE produces economic and business databases and develops specialised analytical tools to deliver these to its customers for decision making and for research.
  • It analyses the data to decipher trends in the economy.

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Importance of increasing the income of those at the bottom of income pyramid

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Marginal propensity to consume

Mains level: Paper 3- Income level and demand problem

India’s growth has been fuelled by demand which has dampened owing to various factors. One untapped source of demand could be the group which lies at the bottom of income pyramid. This article suggests the ways to increase the income of this group.

Structural demand problem

  • India’s structural demand problem predates the COVID-19 shock.
  • This problem has been compounded after lockdown as jobs have been lost and incomes have collapsed.
  • Boosting domestic demand is critical for an economic revival as external demand is likely to remain muted.
  • It is argued that India’s growth story has been driven by demand generated by those who are at the top of India’s socio-economic pyramid
  • But the demand from that section has now plateaued.

So, where the demand is going to come from?

  •  Turn to those at the bottom of the pyramid.
  • Those at the bottom of pyramid have a high marginal propensity to consume.
  • But realising the untapped demand potential of this group requires enhancing their incomes and earnings.

Division of India’s workforce

  • Periodic Labour Force Survey (2018-19) tells us that less than 10 per cent of the workforce is engaged in regular formal jobs.
  • Another 14 per cent are engaged in regular informal jobs with average monthly earnings (Rs 9,500), which is roughly equivalent to or slightly below a minimum wage.
  • The self-employed and casual workers account for 50 per cent and 24 per cent of the workforce respectively and report average earnings that are considerably below a decent minimum amount.
  • Casual workers, who are unlikely to receive work on every day of the month, are at the bottom of the employment structure.

How to increase the earning of those at the bottom of employment structure

  • Devising strategies that enhance productivity growth in the informal economy could increase their income.
  • Raising the minimum wages of the worst-off workers.
  • At present, under the Minimum Wage Act,  India has a complex set of minimum wages which offer different wages by occupation type and skill levels.
  • The Code on Wages (2019) seeks to universalise minimum wages and extend them to the unorganised sector.

Way forward

  • 1) Ensuring a decent minimum wage for those who are the bottom of the distribution — the casual labour, would be helpful in this context.
  • This will help set a higher wage floor for others engaged in low-paid work, including regular informal workers.
  • 2) It is also important that minimum wages are paid in public workfare programmes too, in particular MGNREGA works.
  • At present, MGNREGA wages are not covered under the Minimum Wages Act.
  • 3) The minimum wage can be linked to the consumption expenditure of the relatively better-off group of workers.

Consider the question “India’s growth story is scripted by demand which has been tapering off. The new source of demand could be those at the bottom of income structure. Suggest the strategies to increase the income of this group which could then translate into demand.”

Conclusion

The Indian employment challenge today cannot be seen independently of the problem of inadequate income. The above intervention will not only enable income enhancement of those in low-paid work but also add fuel to demand and growth, this time from those at the bottom of the distribution.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Garib Kalyan Rojgar Abhiyaan

Note4Students

From UPSC perspective, the following things are important :

Prelims level: MGNREGA, Garib Kalyan Rojgar Abhiyaan

Mains level: Garib Kalyan Rojgar Abhiyaan

PM Modi has launched the Garib Kalyan Rojgar Abhiyaan, an employment scheme for migrant workers.

Practice question for mains:

Q. Discuss the silent success of MGNREGA in COVID-19 times.

Garib Kalyan Rojgar Abhiyaan

  • It is a skill-based employment scheme aimed primarily at migrant workers who have returned to their villages to escape the COVID lockdown distress.
  • With a 125-workday mandate to create public infrastructure, with the involvement of 11 central departments, the Rs 50,000-crore initiative will focus on job creation.
  • It will be implemented in 116 districts in six states — UP, MP, Jharkhand, Odisha, Rajasthan and Bihar — that saw the maximum number of migrant workers returning over the last three months.

Works under the scheme

  • The government has identified 25 work areas for employment in villages, for the development of various works.
  • These 25 works or projects are related to meet the needs of the villages like rural housing for the poor, Plantations, provision of drinking water through Jal Jeevan mission,  Panchayat Bhavans, community toilets, rural mandis, rural roads, other infrastructure like Cattle Sheds, Anganwadi Bhavans etc.

Must read:

[Burning Issue] Reorienting MGNREGA in times of COVID

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Paying attention to condition of migrant workers

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Acts related to workers

Mains level: Paper 3- Migrant workers

Issue of migrant workers caught attention of the nation amid lockdown. This issue has wider implications for the economy. This article highlights need for formulating a program to deal with the migrant labourers’ issue in its entirety.

Issue with many implications: Migrant labour

  • Out of the total labour force of 465 million workers, around 91 per cent (422 million) were informal workers in 2017-18.
  • The Economic Survey (2017) estimated 139 million seasonal or circular migrants.
  • Circular urban migrants perform essential labour and provide services.
  • Hence, this issue has implications for livelihoods, agriculture, food security, and safety net policy as well as programme responses.

Existing and proposed legal provision

  • There exists The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act of 1979.
  • Despite this act, there is no central registry of migrant workers.
  • The Occupational Safety, Health and Working Conditions Code of 2019 has been introduced in Parliament.
  • This code seeks to promote the welfare of migrant workers and legal protection for their rights.
  • The code seeks to merge 13 labour laws, including the Inter-state Migrant Workmen Act, 1979 into a single law.

One nation, one ration card

  • “One nation one ration card” addresses the problem of ration-card portability.
  • The move would benefit nearly 670 million people and will be completed by March 2021.

Provisions in the package for migrant workers, small farmers, street vendors

  • There is a provision of Rs 30,000 crore through NABARD, in addition to the already existing Rs 90,000 crore allocation, for the rabi harvest and post-harvest rabi-related work for small and marginal farmers.
  • Further, Rs 2 lakh crore concessional credit will be provided to two crore farmers across the country.
  • About Rs 11,000 crore was allocated for the urban poor, which includes the migrant workers, for building shelter homes for the homeless.
  • Several government-funded housing projects in major cities would be developed into affordable rental housing complexes on a PPP mode.

Free grains for two months

  • The Centre will transfer 8 lakh metric tonnes of grain and 50,000 metric tonnes of chana to state governments.
  • Form this stave will provide 5 kg of grain (wheat or rice) per labourer and 1kg of chana per family per month for two months free.
  • This is expected to benefit up to eight crore migrant workers.

Program for growth and structural transformation

  • Devicing such a program requires a review of national legal, regulatory and institutional concerns in resettlement and rehabilitation of migrant labourers.
  • There is a need to adopt a human rights approach to address the socio-legal issues.
  • The resolution of contradictions in trade, fiscal, monetary and other policies would also require.
  • Following 3 policy changes are urgently required.
  • 1)The implementation of the report of the task force on migration (2017).
  • 2)Expansion of the outreach of the Integrated Child Development Services– to include migrant women and children.
  • 3) Inclusion of migrant children in the annual work plans of Sarva Shiksha Abhiyan.
  • Given the environment of uncertain livelihoods it is necessary to strengthen the resilience of the financial system and skill workers.
  • The issues and challenges of migrant workers require leveraging information and communication technologies and the JAM trinity.

Consider the question “Migrant workers issue is an issue with many implications. This issue needs to be considered in its entirety to formulate a speedy and effective response. In light of this suggest the required policy changes.”

Conclusion

The debilitating physical effects of the coronavirus necessitate coordinated and concerted efforts by all stakeholders to meet the challenges of the present and the expectations of the future. We shall overcome.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Reshaping the gig economy

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Gig economy

Mains level: Paper 3- Gig economy and issue it faces

3 min

The shockwave that pandemic sent through the economy has been reshaping the global job market. Gig economy would have to accommodate the new entrants. This article underlines the changes in the gig economy after the pandemic. Four areas that need attention are also discussed here.

What constitutes gig economy?

  • The word “gig” includes in its current parlance all freelancers, disconnected from the workplace.
  • Example: drivers of Uber, delivery boys of Zomato, plumbers and electricians of Urban Clap.
  • The gig economy is not confined to low-skilled jobs. Skilled professionals are also part of it.

How pandemic is reshaping the gig economy

  • Aviation, hospitality, automobile entertainment and retail are some of the hardest hit sectors.
  • The classic gig anchors- Uber and AirBnB, have laid off thousands of people.
  • In contrast to this, highly skilled professionals —laid off by employers — are joining the gig bandwagon.
  • Surely, job demand will far outstrip supply, at least in the short-term.

What does the future hold?

  • A Deloitte report from April notes that Indian organisations are considering to expand the share of gig workers.
  • Declining full-time jobs will lead to increased assignment-based hiring.
  • For instance, a graphic designer working from home could be in demand with a media house or Netflix may hire AI designer paid by an hour to personalize streaming.
  • But, what is missing in picture? The national database is missing.

4 focus areas of gig economy

1. National database: A missing link

  • National database of job seekers and job creators can connect firms with qualified candidates.
  • A prospective employee would need access to a job database, sorted by skill, geography, duration and emoluments.
  • Companies should be able to dip into the data pool of talent, experience, location, qualification and expectation.
  • Currently, both data sets are fragmented and stored in silos.
  • The government could play the role of a facilitator, in partnership with the private sector.

2. Regulatory protection to gig workforce

  • The gig economy increases employee vulnerability.
  • This segment of the economy so far has been outside the ambit of regulatory labour policies.
  • Social protection like wage protection, health benefits and safety assurance should be made available to gig workers.
  • The Karnataka government has considered introducing a new labour legislation focused on the gig economy.

3. Prepare college students for freelancing

  • Apart from regular campus placements, the placement cells need to reorient and focus on preparing students for freelancing opportunities.
  • For the educated youth, this could be the first step towards entrepreneurship.

4. Gender equality

  • Gender is another crucial dimension of the digital labour markets.
  • The low enrolment of girls for higher education in science, technology, engineering and math would constrict their opportunity in the gig world.
  • Going ahead, this would need greater policy attention to ensure gender parity.

Consider the question “What is the gig economy? Suggest the policy measures to make it more resilient in the present economic context disrupted by the pandemic.”

Conclusion

The government and the private sector would need to collaborate along with academia to build adequate safeguards in the unfolding eco-system.

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The Urban Learning Internship Program (TULIP)

Note4Students

From UPSC perspective, the following things are important :

Prelims level: TULIP

Mains level: Various employment measures

The govt. has launched the TULIP program for providing internship opportunities to fresh Graduates in all ULBs & Smart Cities.

Possible prelims question:

Q. The TULIP program recently seen in news is related to: HRD/Floriculture/Urban Livelihood etc.

TULIP

  • TULIP is a portal jointly developed by the Ministry of HRD, Ministry of Housing & Urban Affairs, and All India Council for Technical Education (AICTE).
  • It will help reap the benefits of India’s demographic dividend as it is poised to have the largest working-age population in the world in the coming years.
  • It would help enhance the value-to-market of India’s graduates and help create a potential talent pool in diverse fields like urban planning, transport engineering, environment, municipal finance etc.
  • It will further the Government’s endeavours to boost community partnership and government- academia-industry-civil society linkages.
  • This launch is also an important stepping stone for the fulfillment of MHRD and AICTE’s goal of 1 crore successful internships by the year 2025.

Why need such a program?

  • India has a substantial pool of technical graduates for whom exposure to real-world project implementation and planning is essential for professional development.
  • General education may not reflect the depth of productive knowledge present in society.
  • Instead of approaching education as ‘doing by learning,’ our societies need to reimagine education as ‘learning by doing.’

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Three thresholds in Industrial Disputes Act that need revision

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Industrial Disputes Act 1947

Mains level: Paper 2- Threshold limits in IDA and issues with it.

Sometimes the measures we come up with end up doing exactly the opposite of what they were supposed to do. This might be the case with some provisions in the Industrial Dispute Act. This article deals with 3 such provisions in the IDA. So, what are these provisions? How the issues caused by these provisions could be resolved? Read to know more…

How provisions of IDA could be detrimental?

  • What made so many migrants suddenly long for their village after lockdown?
  • The answer lies in our Industrial Disputes Act (IDA), the motherboard of our labour laws.
  • IDA has encouraged short-term employment, low skills and zero security.
  • It did this by setting up thresholds which disincentivised long-term commitment of workers to entrepreneurs and vice versa.
  • It also kept firms informal and unwilling to invest in human capital.
  • This is why when the lockdown happened, it turned into a migrant crisis.

Let’s look at  3 thresholds in IDA that are causing harm

  • 1) Hire more than 99 workers, and you will have to notify the government before you can fire any one of them.
  • 2) Hire more than 20 and you open yourself up to provident fund commitments and bonus payments.
  • 3) If you want to deny workers severance pay, never keep them continuously employed for more than 240 days.

So, how IDA ends up discouraging formalisation?

  • Given these provisions in the IDA, entrepreneurs are reluctant to hire more than 99 workers for over 240 days.
  • The employers are naturally tempted to observe these thresholds and duck under the radar.
  • This is made easier by the fact that these thresholds mesh well with the fear that the middle-class — and upwards — have of a working-class takeover.
  • As a result, these thresholds have only encouraged the informal sector, where both unregistered labour and unregistered entrepreneurs dominate.
  • It has led to the proliferation of informal enterprises and low-skill workers.
  • In the first 15 years of this century itself, over half the increase in total employment has been that of contract workers.
  • This has also led to a phenomenal rise in MSMEs as the IDA has discouraged entrepreneurs from harbouring any ambitions to grow big and formal.
  • The MSMEs have, consequently, increased in number from 3.6 crore units in 2012 to about 6 crore today.
  • Since there are constraints on both the workforce size and duration of employment, upskilling and R&D naturally become early casualties.
  • India spends only 0.7 per cent of its GDP in R&D, one of the lowest in the world, while South Korea spends 4.2 per cent.

Contribution of MSME in GDP is not increasing

  • Over 94 per cent of MSMEs are in the Micro sector and their contribution to GDP is just not measuring up.
  • In 2012, MSMEs produced 37.54 per cent of our GDP.
  • But this number fell to 30.7 per cent in 2015, and in 2019 it decreased further to 29.7 per cent, though they are still working full throttle.
  • Yet, the lure to stay on the good side of the IDA thresholds is so compelling that even formal units are today outsourcing from the informal ones.
  • Over time, the IDA has succeeded in converting a large number of organised sector companies into strange, hybrid economic creatures, both fishy and foul.

But, how removal of the 3 thresholds will change the situation?

  • If the 3 mentioned thresholds are removed, every worker — regardless of factory size — is entitled to the same rights.
  • Likewise, every employer, regardless of factory size, can hire and fire workers.
  • There is greater freedom on both sides, but this freedom comes with a price that does not discourage either size or skills in an enterprise.
  • The worker can now be fired without notifying the government, but must be compensated with severance wages, regardless of the size of the firm.
  • Also, unlike the IDA, all the firms must have a formal dispute resolution board.
  • Now that the enterprises have been freed of the size threshold, entrepreneurs get no advantage in dwarfing their firms.
  • Other reforms can soon follow, such as allowing for workers’ representation in a firm’s supervisory board, as it happens in Germany.
  • Measures such as these create trust between employees and employers, and also remove the threatening spectre of a working-class strike.

Consider the question “Various provision of the Industrial Disputes Act which were enacted but with a different purpose now seems to place both the workers and employers in a disadvantageous position. In light of this statement, examine the issues with the threshold limits of the number of employees and number of employment days in the Industrial Disputes Act.”

Conclusion

In the ultimate analysis, the IDA does not produce winners, only losers. The workers remain skill-stunted and insecure, and the entrepreneurs, too, pull back from releasing their much-vaunted “animal spirits”. So, the IDA thresholds must go and not be merely fiddled with, as some states have done.


Back2Basics: Industrial Disputes Act 1947

  • The main purpose of the Industrial Disputes Act, 1947 is to ensure fair terms between employers and employees, workmen and workmen as well as workmen and employers.T
  • The objective of the Industrial Disputes Act is to secure industrial peace and harmony by providing machinery and procedure for the investigation and settlement of industrial disputes by negotiations.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

‘Rozgar Setu’ Scheme for skilled workers

Note4Students

From UPSC perspective, the following things are important :

Prelims level: ‘Rozgar Setu’ Scheme

Mains level: Various employment measures

The Madhya Pradesh has announced the launch of the ‘Rozgar Setu’ Scheme to help secure employment for skilled workers who have returned.

State schemes are quite often seen in the news. They are very important from the prelims perspective:

Rytha Bandu (Telangana): Cash transfer scheme of Rs 5,000/acre, per season

KALIA (Krushak Assistance for Livelihood and Income Augmentation) Scheme (Odisha)

Mukhya Mantri Krishi Aashirwad Yojana (Jharkhand)

Krishak Bandhu Scheme (West Bengal)

‘Rozgar Setu’ Scheme

  • The ‘Rozgar Setu’ scheme to provide work to the maximum number of returned skilled workers.
  • After such workers requiring employment are identified, the government will contact factory and workshop owners and contractors overseeing infrastructure projects such as road and bridge construction.
  • This would fulfil the manpower requirement of industries as well as provide employment to workers during the COVID-19 pandemic.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

[pib] National Migrant Information System (NMIS)

Note4Students

From UPSC perspective, the following things are important :

Prelims level: National Migrant Information System (NMIS)

Mains level: Inter-state workers migration

The National Disaster Management Authority (NDMA) has developed an online Dashboard – National Migrant Information System (NMIS).

Did you notice, the peculiarity of the NMIS? The portal is developed and maintained by the National Disaster Management Authority (NDMA) not Ministry of Labour & employment or Labour bureau.

About NMIS

  • The NMIS aims to capture the information regarding the movement of migrants and facilitate the smooth movement of stranded persons across States.
  • The key data pertaining to the persons migrating has been standardized for uploading such as name, age, mobile no., originating and destination district, date of travel etc., which States are already collecting.
  • States will be able to visualize how many people are going out from where and how many are reaching destination States.
  • The mobile numbers of people can be used for contact tracing and movement monitoring during COVID-19.

Benefits

  • The portal helps maintain a central repository on migrant workers and help in speedy inter-State communication/co-ordination to facilitate their smooth movement to native places.
  • It has additional advantages like contact tracing, which may be useful in overall COVID-19 response work.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Is the suspension of labour laws a silver bullet?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Various labour laws.

Mains level: Paper 2- Legal issues in the suspension of labour laws by the States.

In keeping with the exigencies caused by the pandemic, some State governments have suspended several provision of labour laws. This article analyses the implications of such suspensions. And also emphasises the lack of legal basis in the State governments actions. Evolution of the labour laws in India is also discussed here. So, what are these legal issues? Read to know more…

Some labour laws suspended by the UP government

  • The Uttar Pradesh government has issued an ordinance keeping in abeyance almost all labour statutes.
  • Which includes laws on maternity benefits and gratuity.
  • The Factories Act, 1948.
  • The Minimum Wages Act, 1948.
  • The Industrial Establishments (Standing Orders) Act, 1946.
  • The Trade Unions Act, 1926.
  • This will take away the protection conferred on organised labour by Parliament.

Some repressive labour laws in colonial era

  • Bengal Regulations VII, 1819 was enacted for the British planters in Assam tea estates.
  • Workers had to work under a five-year contract and desertion was made punishable.
  • Later, the Transport of Native Labourers’ Act, 1863 was passed in Bengal.
  • The Act strengthened control of the employers and even enabled them to detain labourers in the district of employment and imprison them for six months.
  • Bengal Act VI of 1865 was later passed to deploy Special Emigration Police to prevent labourers from leaving and return them to the plantation after detention.

Workers’ struggle in British India

  • The labour laws in India have emerged out of workers’ struggles, which were very much part of the freedom movement against oppressive colonial industrialists.
  • Since the 1920s there were a series of strikes and agitations for better working conditions.
  • Several trade unionists were arrested under the Defence of India Rules.
  • The workers’ demands were supported by our political leaders.
  • Britain was forced to appoint the Royal Commission on Labour, which gave a report in 1935.
  • The Government of India Act, 1935 enabled greater representation of Indians in law-making.
  • This resulted in reforms, which are forerunners to the present labour enactments.
  • The indentured plantation labour saw relief in the form of the Plantations Labour Act, 1951.

Acts passed in India to protect workers’ rights

  • The Factories Act lays down eight-hour work shifts, with overtime wages, weekly offs, leave with wages and measures for health, hygiene and safety.
  • The Industrial Disputes Act provides for workers participation to resolve wage and other disputes through negotiations so that strikes/lockouts, unjust retrenchments and dismissals are avoided.
  • The Minimum Wages Act ensures wages below which it is not possible to subsist.

Constitutional basis of the labour laws

  • These enactments further the Directive Principles of State Policy.
  • These laws also protect the right to life and the right against exploitation under Articles 21 and 23.
  • Trade unions have played critical roles in transforming the life of a worker from that of servitude to one of dignity.
  • In the scheme of socio-economic justice the labour unions cannot be dispensed with.

Is the suspension of labour laws legally sound?

  • The Supreme Court, in Glaxo Laboratories v. The Presiding Officer, Labour (1983) said about contract between employer and employee “the contract being not left to be negotiated by two unequal persons but statutorily imposed.”
  • The ‘two unequal’ here refers to the inequality between employee and employer.
  • In Life Insurance Corporation v. D. J. Bahadur & Ors (1980), the Supreme Court highlighted that any changes in the conditions of service can be only through a democratic process of negotiations or legislation.
  • Moreover, Parliament did not delegate to the executive any blanket powers of exemption. 
  • Section 5 of the Factories Act empowers the State governments to exempt only in case of a “public emergency”.
  • Which is explained as a “grave emergency whereby the security of India or any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance”.
  • There is no such threat to the security of India now.
  •  Labour is a concurrent subject in the Constitution and most pieces of labour legislation are Central enactments.
  • The U.P. government by Ordinance has said that labour laws will not apply for the next three years.
  •  How can a State government, in one fell swoop, nullify Central enactments?
  • The Constitution does not envisage approval by the President of a State Ordinance which makes a whole slew of laws enacted by Parliament inoperable in the absence of corresponding legislations on the same subject.
  • The orders of the State governments therefore lack statutory support. 

Consider the question, “Several State governments have resorted to the suspension of labour laws in the aftermath of corona crisis. Examine the implications of the suspension of the laws for the rights of the labours.”

Conclusion

Governments have a constitutional duty to ensure just, humane conditions of work and maternity benefits. The health and strength of the workers cannot be abused by force of economic necessity. Labour laws are thus civilisational goals and cannot be trumped on the excuse of a pandemic.

 

 

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Changing labour laws not a solution

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much.

Mains level: Paper 3- Changes in labour laws and growth in the economy.

Recently several State governments made changes in their labour laws and removed or expanded limits on working hours and changed several other provisions. The article argues that the move may not be as beneficial as it is thought to be. So, how come the changes turned out to be detrimental to the interests of the workers? and what are the other issues involved? Read to know more…

What changed laws mean?

  •  Uttar Pradesh introduced an ordinance that has scrapped most labour law for three years.
  • This was done ostensibly for two reasons- 1) creating jobs and 2)for attracting factories exiting China.
  • These laws deal with -the occupational safety, health and working conditions of workers, regulation of hours of work, wages and settlement of industrial disputes.
  • They apply mostly to the economy’s organised (formal) sector, that is, registered factories and companies, and large establishments in general.
  • Madhya Pradesh and Gujarat have quickly followed suit.
  • Reportedly, Punjab has already allowed 12-hour shifts per day.

Why it is not a good move?

  •  Significantly, migrant labour will be critical to restoring production once the lockdown is lifted.
  • In fact, factories and shops are already staring at worker shortages.
  • Instead of encouraging workers to stay back or return to cities by ensuring livelihood support and safety nets, State governments have sought to strip workers of their fundamental rights.
  • The abrogation of labour laws raises many constitutional and political questions.
  • Scrapping labour laws to save on labour costs will not help start the economy but will do exactly the opposite.
  • It will reduce wages, lower earnings (particularly of low wage workers) and reduce consumer demand.
  • Further, it will lead to an increase of low paid work that offers no security of tenure or income stability.
  • It will increase informal employment in the formal sector instead of encouraging the growth of formal work.

Demand is a reason for the slowdown

  •  There are no inherent shortages at the moment as the inflation rate remains moderate.
  • Before the lockdown, the annual GDP growth rate had plummeted to 4.7% during October-December quarter of 2019-20, from 8.3% in the full year of 2016-17.
  • The slowdown is due to lack of demand, not of supply, as widely suggested.
  • With massive job and income losses after the lockdown, aggregate demand has totally slumped, with practically no growth.
  • Therefore, the way to restart the economy is to provide income support and restore jobs.
  • This will not only address the humanitarian crisis but also help revive consumer demand by augmenting incomes.

2 concerns over the rationale of scrapping laws

  • The rationale for scrapping labour laws to attract investment and boost manufacturing growth poses two additional questions.
  • One, if the laws were in fact so strongly pro-worker, they would have raised wages and reduced business profitability.
  • But the real wage growth (net of inflation) of directly employed workers in the factory sector has been flat (2000-01 to 2015-16).
  • This is because firms have increasingly resorted to casualisation and informalisation of the workforce to suppress workers’ bargaining power.
  • Two, it is not right to blame the disappointing industrial performance mainly on labour market regulations.
  • Industrial performance is not just a function of the labour laws.
  • The industrial performance also depend on the size of the market, fixed investment growth, credit availability, infrastructure, and government policies.
  • In fact, there is little evidence to suggest that amendment of key labour laws by Rajasthan and Madhya Pradesh in 2014 took them any closer to their goal of creating more jobs or industrial growth.
  • The role of labour market regulations may be more modest than the strong views expressed against them in the popular debates.

Time to rationalise the labour laws

  • India’s complex web of labour laws, with around 47 central laws and 200 State laws, need rationalisation.
  • However, now more than ever before, reforms need to maintain a delicate balance between the need for firms to adapt to ever-changing market conditions and workers’ employment security.
  • Depriving workers of fundamental rights such as freedom of association and the right to collective bargaining, and a set of primary working conditions such as adequate living wages, limits on hours of work and safe and healthy workplaces, will create a fertile ground for the exploitation of the working class.
  • Presently, over 90% of India’s workforce is in informal jobs.
  • These informal jobs have no regulations for decent conditions of work, no provision for social security and no protection against any contingencies and arbitrary actions of employers.

Consider the question “There is a rising demand for reforms in the labours laws in India. Examine the issues with the current labour laws in India. Suggest the areas which require improvements “

Conclusion

The changes made by the State governments should not end up doing more harm than good. To ensure that there must be a careful calibration of the move and its consequences.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Changes in labour laws: legal but not appropriate

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Emergency provision dealing with internal disturbance/ Provisions related to ordinances

Mains level: Paper 2- Changes made in labour laws without consultation.

The article examines the changes made in the labour laws by several states. The legal route to make these changes are different. While some states used the Emergency provision, others used the Ordinance route. One major issue with these changes is that these were brought in without consultation.

What legal route was used by the States?

  • Changes were made by the several state government in the labour laws dealing with the maximum working hours and other provisions.
  • These changes have been made through notifications issued by the State governments and will be applicable for the next three months.
  • M.P. has also suspended most provisions of the Industrial Disputes Act, 1946 (except those related to retrenchment and layoffs) for 1,000 days for State undertakings.
  • In addition, M.P. issued an ordinance to amend two laws.
  • The M.P. Industrial Employment Standing Orders Act will apply to establishments with more than 100 workmen (up from the existing threshold of 50), in line with the Central Act.
  • The ordinance also enables the government to exempt establishments from the provision of another Act that provided for a labour welfare fund.
  • The Uttar Pradesh government has approved an ordinance that exempts establishments from all labour laws for three years with some exceptions.
  • As this will override provisions of some Central laws, it will require the assent of the President or, in effect, the assent of the Central government.
  • The question is, was there sufficient consultation before all these changes were made?

Constitutional provisions for the legal route taken: Emergency and ordinance

  • As per the Constitution, the legislature has the authority to make laws.
  • Such laws could delegate powers to the government which are in the nature of detailing some requirements.
  • For example, the Factories Act allows State governments to exempt factories from the provisions of the Act during public emergencies for a maximum period of three months.
  • A public emergency is defined as a grave emergency whereby the security of India or any part is threatened by war, external aggression or internal disturbance.
  • Most States have used this provision, presumably interpreting the current situation as an ‘internal disturbance’.
  • Haryana has used a provision that allows relaxation of work hours “to deal with an exceptional press of work”.
  • The Constitution also permits Central and State governments to make laws through the issuance of an ordinance when the legislature is not in session.
  • Such a law needs to be ratified by the legislature within six weeks of the beginning of the next session. M.P. and U.P. are using this procedure.

Issues with the changes made

  • Usually, any change in an Act follows a rigorous process of public consultation, scrutiny by committees of Parliament, and debates in the House before being approved.
  • The changes described here have not gone through such a process.
  • However, most of these have a three-month time limit, and any extension would need to be approved by the legislature.

The four labour codes

  • The Parliament is consolidating 29 existing laws into four codes dealing with- 1) wages, 2) occupational safety and health, 3) industrial relations,4) social security.
  • The first of these has been enacted, the Standing Committee on Labour has submitted the report on the next two, and is examining the last.
  • The Code on Occupational Safety and Health does not specify the maximum hours of work but empowers the government to do so.
  • The Standing Committee report states that the government agreed to incorporate a provision of maximum eight hours per day with overtime permitted for certain types of industry.

Consider the question “Several States made changes in the labour laws to deal with the problems caused by the corona pandemic. Examine the legal provisions used for making such changes by various States. What are the issues with such changes?”

Conclusion

Given the emergency, the government has to take quick action and change the response as the situation evolves. However, that should not be a reason to exclude the processes of consultation with and scrutiny by elected representatives. The legitimacy of state action in a parliamentary democracy comes from the fact that there is constant oversight and check by elected representatives.

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Explained: How can Inter-State workers be protected?

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not Much

Mains level: Inter-state workers migration

Context

  • Following the novel coronavirus pandemic, the nationwide lockdown announced on March 24 at short notice has caused immense distress to migrant workers around the country.
  • Hundreds have been seen trying to walk home to Uttar Pradesh, Bihar, West Bengal and Odisha from their places of work in Rajasthan, Delhi, Maharashtra, Gujarat and so forth.

Try a mains question on this issue:

Inter state migrants face social, economic and cultural shocks. Discuss some steps taken by center and state governments. Also suggest further reforms.

Inter-State workers: Where is their almighty?

  • Recently, 16 migrant labourers who were trying to return to Madhya Pradesh, their home State, on foot were killed when a goods train ran over them.
  • Questions are being raised about their welfare and the lack of legal protection for their rights.
  • Those working in the field of labour welfare have recalled a 1979 law to regulate the employment and working conditions of inter-State migrants.
  • The lack of serious implementation has led to their rights being ignored.

What about occupational safety?

  • As part of the present regime’s efforts towards consolidating and reforming labour law, a Bill has been introduced in Parliament called the Occupational Safety, Health and Working Conditions Code, 2019.
  • The proposed code seeks to merge 13 labour laws into a single piece of legislation.
  • The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, is one of them.
  • Activists fear that specific safeguards given to migrant workers may be lost as a result of this consolidation.

Inter-State Migrant Workmen Act, 1979: What does the law envisage?

  • The Act seeks to regulate the employment of inter-State migrants and their conditions of service.
  • It is applicable to every establishment that employs five or more migrant workmen from other States; or if it had employed five or more such workmen on any day in the preceding 12 months.
  • It is also applicable to contractors who employed a similar number of inter-State workmen.
  • The Act would apply regardless of whether the five or more workmen were in addition to others employed in the establishment or by the contractors.
  • It envisages a system of registration of such establishments. The principal employer is prohibited from employing inter-State workmen without a certificate of registration from the relevant authority.
  • The law also lays down that every contractor who recruits workmen from one State for deployment in another State should obtain a licence to do so.

What are the beneficial provisions for inter-State migrants in it?

  • The provision for registration of establishments employing inter-State workers creates a system of accountability and acts as the first layer of formalizing the utilization of their labour.
  • It helps the government keep track of the number of workers employed and provides a legal basis for regulating their conditions of service.
  • As part of the licensing process, contractors are bound by certain conditions.
  • These include committing them to provide terms and conditions of the agreement or any other arrangement on the basis of which they recruit workers.
  • In no case, shall the wages be lower than what is prescribed under the Minimum Wages Act.

What does the proposed Code say on migrant workers?

  • The attempt to consolidate laws relating to occupational safety, health and working conditions means that many separate laws concerning various kinds of workers and labourers will have to be repealed.
  • The proposed law seeks to repeal 13 Acts such as the Factories Act, Mines Act, Dock Workers’ Act, the Inter-State Migrant Workmen Act, and other enactments relating to those working in plantations, construction, cinema, beedi and cigarette manufacture, motor transport, and the media.

What does the news law promise for migrant workers?

  • Regarding inter-State migrant workers, the Act includes them in the definition of ‘contract labour’.
  • At the same time, an inter-State migrant worker is also separately defined as a person recruited either by an employer or a contractor for an establishment situated in another State.
  • The Code has a chapter on ‘contract labour and inter-State migrant workers’, but the Parliamentary Standing Committee has recommended that the provisions relating to migrant workers be covered in a separate chapter.
  • The Code contains provisions similar to the 1979 Act regarding registration of establishments, licensing of contractors and the inclusion of terms and conditions on hours of work, wages and amenities.
  • Further, both the old Act and the proposed Code envisage the payment of a displacement allowance and a journey allowance to inter-State migrant workers.

Trade Union’s response

  • Even though the Code seeks to preserve many of the protections and rights are given to inter-State workers, trade unions feel that it is always better to have a separate enactment.
  • The unprecedented distress and misery faced by migrant workers due to the current lockdown have drawn attention to beneficial legislation dedicated to their welfare.
  • The Centre of Indian Trade Unions (CITU) has highlighted the fact that both the States where they work and home States have obligations cast upon them in the existing law.
  • Despite the fact that it has been poorly implemented at all, labour unions feel that preserving the separate enactment and enforcing it well is a better option than subsuming it under a larger code.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Kurzarbeit Scheme

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Kurzarbeit Scheme

Mains level: Strategies to prevent job losses during economic fallouts

Amid the all-round disruption caused to the economy by the novel coronavirus outbreak, a concern across the world is the possibility of a loss of jobs. Various governments have unveiled various measures to address such concerns, and one of the most talked-about is Kurzarbeit.

Kurzarbeit Scheme

  • Kurzarbeit is German for “short-work”.
  • The policy provides for a short-time work allowance, called kurzarbeitgeld, which partially compensates for lost earnings during uncertain economic situations.
  • The policy was rolled out during the 2008 economic crisis while its origins date back as far as the early 20th century, before and after World War I.

How it works?

  • When companies face a loss of earnings due to unforeseen economic situations, they often need to cut back on their working hours or send some of their employees’ home.
  • It aims to address workers who are impacted by the loss of income due to shortened work hours during such times.
  • They can apply for short-term work benefits under the scheme, with the government stepping in to pay employees a part of their lost income.

Quantum of payment

  • Payment under Kurzarbeit is calculated on the basis of a net loss of earnings.
  • As per Germany’s Federal Agency for Work, short-time employees generally receive about 60 per cent of the flat-rate net wage.
  • In case there is at least one child in the house of the short-time worker, he/she receives 67 per cent of the flat-rate net wage.

Benefits

  • This scheme helps the companies retain their employees instead of laying them off, and allows the latter to sustain themselves for a period of up to 12 months.

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[pib] Employees’ Pension Scheme (Amendment) Scheme, 2020

Note4Students

From UPSC perspective, the following things are important :

Prelims level: EPS Scheme

Mains level: Scope and benefits of EPS

The Union Ministry of Labour & Employment has informed about the total enrollments under EPS.

Employees Pension Scheme (EPS)

  • EPS is a social security scheme that was launched in 1995 and is facilitated by EPFO.
  • The scheme makes provisions for pensions for the employees in the organized sector after retirement at the age of 58 years.
  • Employees who are members of EPFO automatically become eligible for EPS.
  • Both employer and employee contribute 12% of employee’s monthly salary (basic wages plus dearness allowance) to the Employees’ Provident Fund (EPF) scheme.
  • EPF scheme is mandatory for employees who draw a basic wage of Rs. 15,000 per month.
  • Of the employer’s share of 12 %, 8.33 % is diverted towards the EPS.

Features of the 2020 Amendment

  • EPS pensioners will get normal pension even after getting a reduced pension due to commutation.
  • On retirement, if the employee opts for commutation of pension, a portion is paid as a lump sum based on the commutation factor while on the balance the pension begins.
  • In simple terms, commutation means a lump sum payment in lieu of periodic payments of pension.
  • In such a case, the amount of pension will be lower than the amount of pension without any commutation.
  • The amendment seeks to restore the original amount of pension as per the commutation table, after 15 years equal to the same amount as it would have been without commutation.

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Let’s think afresh about how to govern India’s gig workforce

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much.

Mains level: Paper 3- How to govern India's gig economy?

 Context

The gig economy plays to employment patterns in India, where most of the workforce is engaged in “informal” jobs in the “unorganized” sector.

Employment pattern in India

  • Non-contractual employment: A recent study of employment patterns over a 13-year period ended 2017 for the Prime Minister’s Economic Advisory Council finds that non-contractual employment grew by 68 million over the period.
    • And “has been a hero of employment generation growing by about 5% annually“.
    • There were 145 million people in non-contractual employment in 2017-18.
    • Professionals constituted the most rapidly growing occupations, with older, better educated and skilled witnessing higher growth.
  • Unorganised sector growing at much higher rate than organised sector: The study also found that unorganized sector employment grew by 65 million between 2004 and 2017, compared to only 27 million new jobs in the organized sector.
    • What does the asymmetric rate suggests? It suggests that businesses are finding it more convenient to sustain themselves when they are below the radar of the government.
  • Potential for growth of gig economy: As technology and business models take the gig economy across the country and implant it more deeply into the Indian economy, we can expect to see a lot more people find employment through online marketplaces and technology platforms.

Regulation of labour laws and expanding the tax base

  • Social Security Code: In December, the government introduced legislation in Parliament that seeks to consolidate a number of labour laws into a Social Security Code.
    • Who will be covered in the code? The new statute encompasses self-employed professionals, freelancers and platform workers, such as those employed by taxi aggregators and food delivery companies.
  • Widening the tax base: The tax person is not far behind.
    • Recent reports suggest that revenue officials are leaning on platforms and aggregators to get gig workers registered with the goods and services tax (GST) network.
    • Need to reflect on how to govern the gig workforce? While it is just as well that the government is attempting to rationalize labour regulations and expand the country’s tax base, it is important to step back and reflect on how the gig workforce ought to be governed.

The new approach to classification of jobs: Income and volatility

  • Classification on the basis of two fundamental characteristics: If we discard the mental model that has long classified jobs as formal and informal, and look at work afresh, we observe that jobs vary along with two fundamental characteristics:
    • The level of income they generate and-
    • The volatility of this income.
    • Example: A security guard at a company might earn a few thousand rupees a month, but with the assurance of a regular monthly paycheque.
  • More informative way: Instead of the old binary formulation of informal versus formal jobs, it is more informative to see jobs being distributed on a spectrum depending on how much they pay and how volatile the income flows they provide are.
    • Wherever a job lies in this spectrum, the objective of public policy ought to be to ensure a “trimurti”.

Ensuring Trimurti

  • Frist-Providing dignified working conditions: Promoting dignified working conditions include-
    • Ensuring fairness.
    • Respect.
    • Safety.
    • Protection against exploitation and-
    • Arrangements for retirement.
    • Need to ensure the obligation from employers: This means that even as labour laws are rationalized to eliminate outdated and hard-coded regulations, it is necessary to ensure that all employers retain an obligation to promote the dignity of all their employees.
  • Second-Need to lower the barriers: Real wages grow not because the government imposes minimum wages, but when productivity rises.
    • Productivity growth occurs when barriers to trade, investment and travel are lowered.
    • A closed economy cannot be a successful gig economy.
  • Finally-A re-imagined social security system: A re-imagined social security system for the 21st century must tap government, corporate and social contributions for insurance and retirement accounts.
    • Such a multi-contribution system is possible today and the proposed Social Security Code is an opportunity to put in place such a future-proof framework.

How to handle the dispute arising out of the gig economy

  • Start online dispute resolution system: The gig economy is perhaps the best place for India to start its first online automated dispute resolution system.
    • You can’t govern the 21st-century economy with 18th-century technology.

Conclusion

While ensuring the application of the labour code to the gig economy and bringing them in the tax net the government also ensure the conducive environment for the gig economy to flourish and contribute significantly in the growth of the country.

 

 

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World Employment and Social Outlook: Trends 2020

Note4Students

From UPSC perspective, the following things are important :

Prelims level: World Employment and Social Outlook: Trends 2020

Mains level: Unemployment in India

The report World Employment and Social Outlook: Trends 2020 (WESO) was recently released.

About the Report

  • The WESO report is an initiative of the International Labour Organization (ILO).
  • ILO forecasts that unemployment will rise by about 2.5 million this year.
  • The ILO is a UN agency whose mandate is to advance social justice and promote decent work by setting international labour standards.
  • The report analyses key labour market issues, including unemployment, labour underutilization, working poverty, income inequality, labour income share and factors that exclude people from decent work.

Highlights of the report

  • Global unemployment is projected to increase by around 2.5 million in 2020.
  • The number of people unemployed around the world stands at some 188 million.
  • In addition, 165 million people do not have enough paid work, and 120 million have either given up actively searching for work or otherwise lack access to the labour market.
  • In total, more than 470 million people worldwide are affected, the report said.
  • Almost half a billion people are working fewer paid hours than they would like or lack adequate access to paid work.
  • Not enough new jobs are being generated to absorb new entrants to the labour market.

Data on working poverty

  • Currently working poverty (defined as earning less than USD 3.20 per day in purchasing power parity terms) affects more than 630 million workers, or one in five of the global working population.
  • Inequalities related to gender, age and geographical location continue to plague the job market, with the report showing that these factors limit both individual opportunity and economic growth.
  • Some 267 million young people aged 15-24 are not in employment, education or training, and many more endure substandard working condition.

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Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

[op-ed snap] Reset and reform

Note4Students

From UPSC perspective, the following things are important :

Prelims level: Not much.

Mains level: Paper 3- Socio-economic upheaval in Indian economy and its consequences for the Indian economy.

Context

With the Indian economy caught in the middle of a socio-economic upheaval, the government needs to make its focus on the economy clear and pronounced.

India in the middle of a socio-economic upheaval

  • Weakening economy: The economy has been weakening for a couple of years now.
  • Social upheaval: The social upheaval is new but its seeds have been fermenting for a while.
  • Consequences of the two: The social and economic sides of an economy are not divorced from each other.
    • Each influences the other and the current quagmire threatens to unleash the worst type of feedback between the two.

Consequences for the employment

  • Most severe consequence due to the interaction between the social and economic sides is unemployment.
  • Rising unemployment disproportionately affects the young.
  • India’s job market: India whose median citizen is in the 30s and which is inducting 10 million new young people to the job market every year.
  • Demographic dividend turning into a curse: This dynamic, popularly hailed as India’s demographic dividend, can rapidly turn into a demographic curse if the employment situation doesn’t improve.

Falling investment rate, increased risk perception

  • Where will the jobs come from? The job creators are entrepreneurs, conglomerates, and multinationals.
    • It is in their nature to take investment risks as long as the returns are high enough.
  • Investment rates below 30: In India, investment rate fell well below 30 per cent a while back.
    • Falling returns: The returns on investment were not compensating entrepreneurs for the risk.
    • The recent social upheaval is only adding to the perceived risk.
  • Wait and see approach: The more investors adopt a “wait-and-see” approach, the worse the job situation will become.

Way forward

  • Structural reforms: The government needs to announce a clear plan and timeline for structural reforms.
  • Prioritising domain competence in staff: The government has to start staffing technical positions by prioritising domain competence and empowering these hires with policy relevance.
  • Maintaining the integrity of institutions: The government need to maintain the integrity of institutions tasked with the regulation of corporations and banks, monetary policy management, data collection/dissemination and law enforcement.
  • Accommodate dissent: The government also needs to desist from trying to drown out protesting voices with state muscle power.

 

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The lagging manufacturing sector

  • Despite low wages, India is not a global manufacturing hub, even while being one of the fastest growing service sectors in the world
  • India’s service sector has grown at an annual rate of 9% since 2001, and contributed 57% of the GDP in 2012-13
  • The industrial sector, meanwhile, only recorded a negligible increase and contributes nearly half at 26% of GDP
  • Despite the availability of human resources, India has not been able to leverage its demographics for industrial development

This disparity is considered to be an outcome of:

  1. High rates of corruption
  2. Excessively complex worker-centric labour regulations
  3. Low labour productivity

Issues in Indian labour laws:

#1. Archaic laws

  • In the pre-independence period, British colonialists in India suppressed labour rights, trade unions and the freedom of association among workers. As a result, labour activism became a part of the Indian freedom struggle
  • In 1950, the newly framed Constitution of India looked to undo these wrongs by including fundamental labour rights, along with complex labour laws. These laws made hiring additional workers increasingly difficult
  • Despite several decades of economic progress, these laws have not been amended or reformed in order to foster a friendlier climate for business

#2. Labour productivity

  • India has low labour productivity in comparison with other developing nations
  • As a result, in the early days of offshoring, Western firms showed greater interest in setting up manufacturing facilities in Thailand, Mexico, China, Vietnam and Philippines rather than in India
  • All of these countries had as bad a record of bureaucratic corruption as India did at the time, but labour productivity was found to be higher

#3. Politics

  • In Kerala alone, for example, there were nearly 363 hartals between 2005 and 2012, causing loss of working days
  • In addition, in the 1970s and 1980s, Indian politics was dominated by socialists who created the impression that profit making by private enterprises is undesirable
  • Policymakers also further strengthened India’s complicated labour laws

#4. Complexity

  • Labour is a subject in concurrent list of the Constitution of India. Thus both centre and states can enact laws on labour matters
  • There are about 45 central government laws and more than 100 state statutes, sometimes overlapping or contradicting

#5. Rigidity

  • India has one of the most rigid labour regulatory frameworks in the world
  • Example- Industrial Disputes Act of 1947 stipulates that a firm with 100 employees or more cannot close down without government permission
  • Such laws curtail the growth of a firm by forcing it to hire fewer workers and remain small

#6. Cost of compliance

  • There are also high costs involved in complying with several labour laws
  • Example- under the Factories Act, firms with 10 or more workers and firms which use electric power are required to keep records and file regular reports on matters such as overtime work, wages, attendance, sick leave and worker fines

Need for reforms:

  • As early as in 2002, the Second National Commission on Labour suggested the formulation of labour codes similar to those in Russia, Germany, Poland, Hungary and Canada
  • The commission recommended that labour legislation be divided into five broad areas: industrial relations, wages, social security, safety and welfare, and working conditions
  • It is predicted that the size of India’s workforce will swell to 249 million by 2050, while China’s is set to decline to 166 million during the same period

So how should the Indian government and Indian industry build India’s human resources for the cause of future growth?

Way ahead:

  • Legislative reforms such as those taken up recently by central government and states such as Rajasthan, Gujarat, MP are very much needed
  • Empowering women to enter the workplace and providing them additional support
  • Physically challenged- Increasing current 3% reservation in governmental and government-funded jobs. Also ensuring that workplaces are disabled-friendly
  • Example- Karnataka granted exemptions to IT industries from the Industrial Employment (Standing Orders) Act of 1946. It undermines the employer’s autonomy in determining the terms of employment, working hours, leave grant and similar matters
  • Providing social security to workers in the informal sector would also pave the way for a more satisfied and productive workforce
  • Training and skilling- India has a demographic advantage but in order to utilize this dividend, India needs to invest heavily in training its talent
  • India’s supply of labour presently outnumbers industry’s demand for them. As a result, the government and manufacturing firms need to invest in training and skilling

Conclusion:

The guiding principle for India’s labour policy reformers should not merely be ring fencing jobs but safeguarding workers through social assistance, re-employment support (such as that which is provided in several Western nations) and skill building, and supporting employers in employee training and development.


 

  • From our collection on Govt schemes:
  1. Pandit Deendayal Upadhyay Shramev Jayate Karyakram
  2. From Jan Dhan to Jan Suraksha

Published with inputs from Swapnil
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