Move over India Inc, govt relying on contract labour now

Written by fe Bureau | New Delhi | Updated: Aug 21 2014, 10:09am hrs
LabourAbout 43% of the 28.8 million formal-sector workforce with the central government is either on contract or are casual labourers. (AP)
Preference to the contract system of employment is not unique to the private corporate sector. About 43% of the 28.8 million formal-sector workforce with the central government is either on contract or are casual labourers with virtually no social security cover, a new survey has revealed.

Indian Staffing Federation, the apex body for companies supplying contract labourers to the industry, estimated temporary workers dependent on government at 12.3 million, of which 10.5 million are casual workers engaged in sectors such as mining and construction and are without any formal job contract. Another 1.4 million workers hold fixed short term written job contracts in relatively skilled professions such as teachers in primary and secondary education, office clerks, protective services and personal care.

The percentage of contract or casual workers dependent on the government has shot up to 43% in 2013. The share of contract and casual labourers in the public sector was barely 11.65% in 2009 and 6.4% in 2001 as there has been a sharp decline in share of permanent employees from 93.6% in 2001 to 88.45% in 2009. Employment in the public sector declined from 19.5 million in 1995 to 17.5 million in 2011, with central government accounting for half of the decline.

Out of the 397.4 million workforce in India, an overwhelming majority of 87% (347.7 million) are employed in informal sectors and only 49.7 million are in formal sector. Even among the limited number of formal sector workers, 56% (27.8 million) are holding jobs temporary in nature and most of them are casual (23.8 million).

While National Sample Survey Organisation estimates 7.2 million increase in the formal sector workforce in India from 2011 to 2013, ISF said this large overall figure of expansion in formal workforce though hides an interesting story more than 40% of the increment involves a transition of informal sector workers into the formal sector. "This expanding formalisation of the workforce in India would have been something to cheer about, unless the finer details showed that almost two-thirds of this incremental formal sector work force hold temporary jobs, with more than 80% of them having no formal work contract," ISF said. "A considerable number of these temporary workers dependent on Government for livelihood are deprived of a decent work environment. A large number do not even receive the minimum wages," it added.

The casual workers hardly have any job or income security. Even the short term contract holders primarily receive a consolidated wage or salary with no additional contribution towards Employees Provident Fund, Employees State Insurance, Gratuity, New Pension Scheme (NPS).

Malpractices by local unorganised contractors also exploit workers as lack of longer-term association and an employeremployee relation nullifies possibility of collective bargaining.

At least 6.9 million of the 12.3 million temporary workers in the government sector are working in various government programmes such as Integrated Child Development Services, National Rural Health Mission, National Rural Livelihood Mission. Technically, many of them are not even recognised as government employees, even though they are dependent on government for livelihood.

For example, there are around 2.5 million Anganwadi workers (AWW) and Anganwadi helpers (AWH) and 0.9 million Accredited Social Health Activists (ASHA) who have been termed as honourary or voluntary workers as the programmes in which they work are designed to be community-based intervention.

The Anganwadi worker receive R3,000 per month plus state contribution, which varies widely from nil in Bihar to R4,200 pm in Goa. Even with additional state honorarium, a starting-level Anganwadi workers in Goa receives R5,752 a month, which is below state minimum wage of R6,450 pm.

Similarly, ASHAs received a performance-based incentives, with only a few states introducing a fixed honorarium to supplement performance incentives. Overall payment is very poor -- a satisfactory performance will bring R1,067 as incentive in Rajasthan and fixed honorarium of only R1,300 pm has been declared in West Bengal.

Pitching for organised flexi-staffing in the public sector, ISF president Rituparna Chakraborty said the process of bringing more workers from the informal to formal sector can be expedited by bringing in transparency in government tenders for hiring contract workers. Moreover, she said the employees should be given a choice to opt in or opt out of EPFO, choose to invest 12% of employers' contribution in either EPFO or NPS and choose between ESI or IRDA-listed insurers for mediclaim. The government should also ratify the ILO Convention 181 which will help regulate job agents and protect the interest of job seekers and employers, she added.