Labor in India Defined

Labor in India refers to employment in India’s economy. Based on 2012 statistics, there were approximately 487 million laborers in India. In fact, it is the second largest next to China.

More than 94 percent of those laborers work in unorganized or unincorporated enterprises such as pushcart vendors and home-based diamond and gem polishing jobs. Unorganized sector refers to all unlicensed or unregistered economic activity and self-employed.

Meanwhile, as for the organized or formal sector include employees employed by the Indian government, state-owned and private sector enterprises, licensed organizations, publicly traded companies, incorporated or duly registered companies, corporations, factories, shopping malls, hotels and giant businesses.

Apparently, a majority of labor in India is employed by unorganized or unincorporated sector.

In 2008, in India’s Ministry of Labor report, the agency classified the unorganized sector into four groups according to occupation, nature of employment, specially distressed and service categories.

Here are some of the jobs under each unorganized groups:

Occupational Group
• Farmers
• Fishermen
• Labeling and packing
• Building and construction workers
• Weavers
• Artisans
• Salt workers
• Workers in quarries
• Workers in saw mills
• Workers in oil mills
• Landless agricultural laborers
• Sharecroppers
• Workers in animal husbandry
• Beedi rolling
• Leather workers

Nature of Employment Group
• Agricultural laborers
• Bonded Laborers
• Migrant Workers
• Contract and Casual Workers

Distressed Group
• Toddy Tappers
• Scavengers
• Carriers of head loads
• Drivers of animal driven vehicles
• Loaders and unloaders

Service Group
• Midwives
• Domestic workers
• Barber shop workers
• Vegetable and fruit vendors
• Newspaper vendors
• Pavement vendors
• Hand cart operators
• Other unorganized retailers

Nevertheless, statistics revealed that the unorganized sector has lesser productivity and offers lower wages. In fact, even though the unorganized sector accounted for more than 94 percent of India’s total number of workers, it created only 57 percent of India’s national domestic product in 2006, or approximately 9 fold less per worker than the organized sector. Said productivity gap severely worsens when rural unorganized sector is compared to urban unorganized sector, having gross value added productivity gap dashing an additional 2 to 4 fold depending on occupation.

Most of the lowest income jobs are in the rural unorganized sectors. In fact, poverty rates are reported to be considerably higher in families where members have only worked in the unorganized sectors.

Approximately 30 million workers are migrant workers who are mostly in agriculture and stable employments aren’t often unavailable for them.

As of 2010, the country’s National Sample Survey Office, in its recent report claimed that unorganized manufacturing, unorganized trading / retail and unorganized services employed approximately 10 percent each of all laborers across the globe. It further noted that the country had approximately 58 million unincorporated non-Agriculture enterprises in the same year.

In the organized private sector, having more than 10 workers per company, the largest employers as of 2008 were as follows:

• Manufacturing at 5 million;
• Social services at 2.2 million
• Finance at 1.1 million
• Agriculture at 1 million

In the same year, India had more employees in central and state government than in all private sector companies.

If both state-owned companies and local government employees were included, the country had a 1.8:1 ratio between public and private sector employees. When it comes to gender equality in the workforce, male to female ratio was 5:1 both in government and government owned enterprises while the private sector presented better at 3:1 ratio. If combined, totaling only companies with more than 10 employees per company, the organized private and public sector employed some 2.2 million men and 5.5 million women.

Provided its natural rate of growth in population and aging characteristics in India, the country is adding nearly 13 million new laborers every year to its employment industry. Also, it has been adding approximately 8 million new jobs every year mainly in low paying, unorganized sector.

Unfortunately, there are some 5 million youth joining the pool of under paid partial employments, casual labor for temporary infrastructure and construction jobs, or in many instances, being unemployed.