The large share of contract workers in the manufacturing sector, as revealed by the Annual Survey of Industries, is reason enough for the government and trade unions to make a realistic assessment of the labour scenario in the country. We must ensure that the engagement of contract workers gets adequate legal backing, as demanded by industry. The very fact that a quarter of the country?s organised sector workforce in manufacturing was engaged on a contract basis in 2004-05, which is more than thrice the 7% share in the early 1980s, only shows that it is no longer a fringe phenomenon. The widespread use of contract labour is also ample evidence to prove that the Contract Labour (Regulation and Abolition) Act of 1970 has not just proved ineffective, but is also far removed from reality in how the needs of industry are met. Yet another trend that reinforces the argument for contract employment is its increasing use even in the sedate public sector. Numbers in the Annual Survey show that in at least half a dozen states, the share of contract labour in the public sector ranges from a quarter to a third. As for the Left?s stand on the Act, the less said the better. The larger-than-proportionate increases in contract labour in public sector units in states ruled by the Left indicate that its resistance to this form of employment is about popular rhetoric rather than innate belief. How else can one explain the higher share of public sector contract workers in these states?
To give credit where it?s due, the Union government has been supportive of efforts to amend the Contract Labour Act, and had even floated a discussion paper in 2005 to elicit a range of views. But nothing has come of this initiative so far. Of special concern are some of the provisions of the Act that prohibit contract work in core operations and in perennial activities, neither of which is defined clearly, thus leaving it open to interpretation by local authorities. In some states, contract employees can lay claim to permanent employment if employed for more than 240 days in a year. Waiving such meaningless provisions will go a long way in boosting contract labour even in laggard states, thus increasing labour force participation and giving the labour market a measure of flexibility long denied to it, officially.
