Labour in India refers to employment in the economy of India. In 2020, there were around 476.67 million workers in India, the second largest workforce after China. Out of which, agriculture industry consist of 41.19%, industry sector consist of 26.18% and service sector consist 32.33% of total labour force. Of these over 94 percent work in unincorporated, unorganised enterprises ranging from pushcart vendors to home-based diamond and gem polishing operations. The organised sector includes workers employed by the government, state-owned enterprises and private sector enterprises. In 2008, the organised sector employed 27.5 million workers, of which 17.3 million worked for government or government owned entities.
The Human Rights Measurement Initiative finds that India is only doing 43.9% of what should be possible at its level of income for the right to work. Due to lax labor rules that apply to all businesses in India, laborers are frequently exploited by their bosses in contrast to developed nations. According to the International Labour Organization (ILO), Indians have one of the longest average work weeks when compared with the ten largest economies globally. The average working hours in India are approximately 47.7 hours per week. This places India seventh on the list of countries that work the most globally. Despite having one of the longest working hours, India has one of the lowest work productivity levels in the world.Dougherty, S., R. Herd and T. Chalaux (2009), "What is holding back productivity growth in India ?: Recent microevidence", OECD Journal: Economic Studies, vol. 2009/1, .Sapovadia, Vrajlal K., Low Productivity: India’s Bottleneck of Growth (May 21, 2019). Available at SSRN: or Bloom, Nicholas, Aprajit Mahajan, David McKenzie, and John Roberts. 2010. "Why Do Firms in Developing Countries Have Low Productivity?" American Economic Review, 100 (2): 619–23. Sivadasan, Jagadeesh. "Barriers to Competition and Productivity: Evidence from India" The B.E. Journal of Economic Analysis & Policy, vol. 9, no. 1, 2009. Goldar, B., Krishna, K.L., Aggarwal, S.C. et al. Productivity growth in India since the 1980s: the KLEMS approach. Ind. Econ. Rev. 52, 37–71 (2017).
Labour structure in India
Over 94 percent of India's working population is part of the unorganised sector. In local terms, organised sector or formal sector in India refers to licensed organisations, that is, those who are registered and pay GST. These include the publicly traded companies, incorporated or formally registered entities, corporations, factories, shopping malls, hotels, and large businesses. Unorganised sector, also known as own account enterprises, refers to all unlicensed, self-employed or unregistered economic activity such as owner-staffed general stores, handicrafts and handloom workers, rural traders, farmers, etc.
India's Ministry of Labour, in its 2008 report, classified the unorganised labour in India into four groups. This classification categorized India's unorganised labour force by occupation, nature of employment, specially distressed categories and service categories. The unorganised occupational groups include small and marginal farmers, landless agricultural labourers, sharecroppers, fishermen, those engaged in animal husbandry, beedi rolling, labeling and packing, building and construction workers, leather workers, weavers, artisans, salt workers, workers in brick kilns and stone quarries, workers in saw mills, and workers in oil mills. A separate category based on nature of employment includes attached agricultural labourers, bonded labourers, migrant workers, contract and casual labourers. Another separate category dedicated to distressed unorganised sector includes toddy tappers, scavengers, carriers of head loads, drivers of animal driven vehicles, loaders and unloaders. The last unorganised labour category includes service workers such as midwives, domestic workers, barbers, vegetable and fruit vendors, newspaper vendors, pavement vendors, hand cart operators, and the unorganised retail.
The unorganised sector has low productivity and offers lower wages. Even though it accounted for over 94 percent of workers, India's unorganised sector created just 57 percent of India's national domestic product in 2006, or about nine fold less per worker than the organised sector. According to Bhalla, the productivity gap sharply worsens when rural unorganised sector is compared to urban unorganised sector, with gross value added productivity gap spiking an additional two to four fold depending on occupation. Some of lowest income jobs are in the rural unorganised sectors. Poverty rates are reported to be significantly higher in families where all working age members have only worked the unorganised sector throughout their lives.
Agriculture, dairy, horticulture and related occupations alone employ 41.49 percent of labour in India.
About 30 million workers are migrant workers, most in agriculture, and local stable employment is unavailable for them.
India's National Sample Survey Office in its 67th report found that unorganised manufacturing, unorganised trading/retail and unorganised services employed about 10 percent each of all workers nationwide, as of 2010. It also reported that India had about 58 million unincorporated non-Agriculture enterprises in 2010.
In the organised private sector with more than 10 employees per company, the biggest employers in 2008 were manufacturing at 5 million; social services at 2.2 million, which includes private schools and hospitals; finance at 1.1 million which includes bank, insurance and real estate; and agriculture at 1 million. India had more central and state government employees in 2008, than employees in all private sector companies combined. If state-owned companies and municipal government employees were included, India had a 1.8:1 ratio between public sector employees and private sector employees. In terms of gender equality in employment, male to female ratio was 5:1 in government and government owned enterprises; private sector fared better at 3:1 ratio. Combined, counting only companies with more than 10 employees per company, the organised public and private sector employed 5.5 million women and 22 million men.
Given its natural rate of population growth and aging characteristics, India is adding about 13 million new workers every year to its labour pool. India's economy has been adding about 8 million new jobs every year predominantly in low paying, unorganised sector. The remaining 5 million youth joining the ranks of poorly paid partial employment, casual labour pool for temporary infrastructure and real estate construction jobs, or in many cases, being unemployed.
Labour relations About seven per cent of the 400 million-strong workforce were employed in the formal sector (comprising government and corporates) in 200028m workers employed by 400k companies contributing 60 per cent of the nominal GDP of the nation. The Trade Unions Act 1926 provided recognition and protection for a nascent India In 1997, India had about 59,000 trade unions registered with the government of India. Of these only 9,900 unions filed income and expenditure reports and claimed to represent 7.4 million workers. The state of Kerala at 9,800 trade unions had the highest number of registered unions, but only few filed income and expenditure reports with the government of India. The state of Karnataka had the fastest growth in number of unions between the 1950s to 1990s.
In 1995, India had 10 central federations of trade unions, namely (arranged by number of member unions in 1980): INTUC, CITU, BMS, AITUC, HMS, NLO, UTUC, AIUTUC, NFITU and TUCC. Each federation had numerous local trade union affiliates, with the smallest TUCC with 65 and INTUC with 1604 affiliated unions. By 1989, BMS had become India's largest federation of unions with 3,117 affiliated unions, while INTUC remained the largest federation by combined number of members at 2.2 million. The largest federation of trade unions, INTUC, represents about 0.5% of India's labour force in organised sector and unorganised sector. In 2010, over 98% of Indian workers did not belong to any trade unions and were not covered by any collective bargaining agreements.
Labour relations during 1950–1990 A number of economists (e.g.: Fallon and Lucas, 1989; Besley and Burgess, 2004) have studied the industrial relations climate in India, with a large number of studies focusing on state-level differences in India's Industrial Disputes Act. Some studies (e.g.: Besley and Burges, 2004) purport to show that pro-worker amendments to the Industrial Disputes Act have had a negative impact on industrial output and employment - as well as on poverty. However these studies have faced serious criticism on the grounds that the data used are misinterpreted, and that the results are not robust with respect to standard econometric tests.
Between 1950 and 1970, labour disputes nearly tripled in India, from an average of 1000 labour disputes per year, to an average of 3000 labour disputes per year. The number of labour relations issues within a year peaked in 1973 at 3,370 labour disputes. The number of workers who joined labour disputes within the same year, and stopped work, peaked in 1979, at 2.9 million workers. The number of lost man-days from labour relation issues peaked in 1982 at 74.6 million lost man-days, or about 2.7% of total man-days in organised sector. While the 1970s experienced a spike in labour unions and disputes, a sudden reduction in labour disputes was observed during 1975–1977, when Indira Gandhi, then prime minister, declared an emergency and amongst other things suspended many civil rights including the worker's right to strike.
This is a table showing trend of organised Labour Force. Year Public Sector(in millions) Private Sector(in millions) Live (Unemployment) Register(in millions)1975 13.63 6.79 9.781980 15.48 7.40 17.841985 17.68 7.37 30.131990 19.06 7.68 36.301995 19.43 8.51 37.432000 19.14 8.65 42.002005 18.19 8.77 41.472010 17.55 11.45 40.17
Labour relations during 1990-2000 Union membership is concentrated in the organised sector, and in the early 1990s total membership was about 9 million. Many unions are affiliated with regional or national federations, the most important of which are the Indian National Trade Union Congress, the All India Trade Union Congress, the Centre of Indian Trade Unions, the Hind Mazdoor Sabha, and the Bharatiya Mazdoor Sangh. Politicians have often been union leaders, and some analysts believe that strikes and other labour protests are called primarily to further the interests of political parties rather than to promote the interests of the work force.
The government recorded 1,825 strikes and lockouts in 1990. As a result, 24.1 million workdays were lost, 10.6 million to strikes and 13.5 million to lockouts. More than 1.3 million workers were involved in these labour disputes. The number and seriousness of strikes and lockouts have varied from year to year. However, the figures for 1990 and preliminary data from 1991 indicate declines from levels reached in the 1980s, when between 33 and 75 million workdays per year were lost because of labour disputes. In 1999, the government of India recorded about 927 strikes and lockouts, or about half of those for 1990. The number of lost man-days were about the same for 1999 and 1991, even though Indian economic output and number of workers had grown significantly over the 1990s.
Labour relations during 2000–2011