Summary of the Dr. Arjun Sengupta 'Report on the Conditions of Work and Promotion of Livelihoods in the Unorganised Sector' (NCEUES)

Bhasin, Anuradha is an independent consultant working on the areas of trade and development issues.

June 2008, Craft Revival Trust
The mammoth Dr. Arjun Sengupta 'Report on the Conditions of Work and Promotion of Livelihoods in the Unorganised Sector' published in August 2007 under the agesis of the National Commission for Enterprises in the Unorganised Sector is deconstructed by Economist Anuradha Bhasin. In her two part summary she has culled out information that relates to the craft sector.

Part I details conditions of work and livelihood while Part II will list the recommendations of the Commission.

Unorganised Workers: Working Conditions Today and Policy Recommendations

In sharp contrast to the growth performance of the Indian economy overall, is the state of the ‘unorganized’ sector in the economy. Even though 340 million workers are part of this sector, they appear to have been left behind in the country’s march to progress. While the rest of the economy is advancing at a brisk 7-8 per cent a year, working and living conditions among many artisans and crafts people continue to be abysmally stagnant, almost medieval in their scope. Today, they are poor, landless and land poor, and their lack of meaningful educational makes it almost impossible for them to raise themselves by improving their quality of employment and their economic lot in life. In the handloom weaving industry, production and productivity have actually declined, as has been well documented on this website.

The working conditions and livelihoods of those in the unorganized sector (and informal workers in the organized sector) have been starkly highlighted in the recently published Report on the Conditions of Work and Promotion of Livelihoods in the Unorganised Sector. Based on these findings, the National Commission for Enterprises in the Unorganised Sector (NCEUS) has recommended various measures to tackle these problems, both in the policy and legislative space, which appear at the end of the report.

This is a mammoth exercise covering all workers - agricultural and non-agricultural – and dealing separately with wage workers and self-employed among the non-agricultural people. The scope of the report is vast as it defines informal workers as those who do not have employment security, work security and social security – which thus includes those who work in the unorganized sector, as well as informal workers in the organized sector. Under this description informal workers form a staggering 92 percent of the total workforce.

With detailed information on the conditions under which they work (including those which impinge on health and sanitation, such as workspace and ventilation, exposure to hazardous materials, hours of work) and wage-related problems they face, it exposes the gross neglect of a large, vital group, central to the functioning of the economy.

Information that relates specifically to the conditions of artisans or craftspeople is aggregated and has to be gleaned from the text, but given the neglect of the crafts sector by policy makers so far, any information on the conditions of craftworkers and artisans is very illuminating.

The following is a summary of important points raised in the report, which relate to the craft sector, and its main recommendations.

A Brief Outline of the Contents of this Summary
What follows is a summary of the main findings and recommendations of the report related to non-agricultural workers in the informal sector. Chapter 2 of the report contains a socio-economic profile of non-agricultural informal workers, documenting their low levels of social and economic capital and high incidence of poverty. The finding is that all non-agricultural workers are landless or land poor, and a large proportion of them are ‘poor and vulnerable’ based on their very low per capita daily consumption. Not only do informal workers account for 92 per cent of the workforce, their numbers have been growing. Thus while employment grew at a higher rate between 1999-2005 than in prior years, new employment has almost entirely been of informal workers.

The report contains a detailed analysis of the various dimensions of the challenge confronting these informal workers. Many are self-employed or wage workers, who sometimes work from their homes but mostly outside. Some are lucky to have some kind of regular work but the majority of wage workers are employed on a casual basis. Chapter 3 of the report has a detailed profile of these workers, the appalling condition of most of their physical workspaces, the work and health hazards they are exposed to, and the onerous working hours. Most receive wages too low to enable them to ever emerge from poverty, quite apart from overcoming their vulnerabilities.

Nor are conditions much better for the self-employed informal workers outside agriculture, given the constraints they face, their working conditions, especially those who work from home. The report has in-depth reports of conditions in four industries: the handloom sector in various states, food processing, street vendors and hawkers and rickshaw pullers.

Discrimination is the norm when it comes to women, children, bonded or migrant workers. Such positions of disadvantage are often reinforced by one's social identity, rural location and, above all, low or no education. An entire chapter (Chapter 5) details the nature and participation of women in the informal workforce, and their conditions of work, especially in among self-employed women workers, and girl workers. Another chapter (6) deals with disadvantaged Workers, such as migrants, children and bonded labourers.

Clearly some specified minimum conditions of work for the unorganized workers is needed, as well as measures that promote livelihoods. The report outlines its proposals for two comprehensive Bills for unorganised agricultural and non-agricultural workers to ensure minimum conditions of work as well as a minimum level of social security. Much of this is based on two earlier reports of the Commission: Social Security for Unorganised Workers (May 2006) and Comprehensive Legislation for Minimum Conditions of Work and Social Security for Unorganised Workers (July 2007). It has, further, proposed a number of measures to improve the livelihood of unorganised sector workers. For those who would like to read the entire report, it can be accessed at:


Informal Wage Workers Work Conditions and Pay
(From Chapter 3)

There are about 76.7 million informal workers including informal wage workers in the organised sector and 52.9 million non-agricultural wage workers (2004-05). Wage workers are concentrated in a few industries; among casual workers, both men and women are employed mainly in construction and manufacturing, with the textile industry being the largest employer of casual workers followed by other non-metallic mineral products and food products. Among regular workers in the unorganised sector, men are concentrated in construction, trade and transport and communication, and women in other services, such as in private households.

The physical conditions of work, occupational health, working hours and remunerations of wage workers in the unorganised sector are deplorable. The conditions of work of the regular wage workers in the unorganized sector were only slightly better than that of the casual workers. Large majority of them have no written contracts and less than one-fifth was entitled to paid leave, and few receive the minimum wage.

Their concentration in a few industries is a probable indication of the non-availability of work opportunities elsewhere. Thus, in terms of several dimensions and criteria pertaining to work conditions, wage workers in the unorganised sector are a deprived lot.

Physical Conditions
Their conditions of work and employment are generally, in the words of the report, “deplorable.” Numerous studies have noted the inhuman physical conditions of workers, with their lack of space, light and ventilation. Proper illumination is necessary not only for personal protection, but also to ensure the quality of work – the weaving of carpets with intricate designs, and ensuring the accuracy of different colours, textures and surfaces in weaving, manufacture of leather footwear or accessories. Where a large part of the work is done on piece rates and workers pay for mistakes, errors and bad quality of work due to poor illumination is a double punishment.

Work Conditions for Informal Workers
Examples from Leather Craft

  • In several industries, the workspace and living space are indistinguishable for the worker and the family, so that both are cramped and inadequate. Inadequate ventilation has meant a shift of work to late evenings and nights during hot summers. Night work, apart from being in contrast to the natural cycle, involves other requirements with regard to working place such as adequate illumination, provision for breaks, rest and so on.

  • Studies have shown that "workers in the leather accessories manufacture worked under inadequate ventilation and illumination." Natural ventilation from windows was inadequate and not supplemented by an exhaust, table or ceiling fan. While many enterprises have ceiling fans, over half the workforce had to share a fan among five workers. During summer, the temperature at the work place reached 50 degrees celsius under the low asbestos roof. Thus workers were compelled to take a break from work during mid-day to escape from the extreme heat. To compensate for this break of about two hours, they worked through the evening into the night and at times till 1 am the next morning.

  • A study of leather accessories manufacture in Mumbai shows that about half the workforce has been denied access to this minimum ventilation. Adequate ventilation is also essential for fire safety. An important raw material used in the leather accessories, synthetic rubber based adhesive is highly inflammable.

Occupational Hazards, Health Conditions and Safety Measures
Workers in the glass bangle industry suffer from respiratory disorders and tuberculosis due to the toxic fumes and smoke within the factories and the high level of coal dust. Dyes and chemicals used in textiles and carpet weaving are health hazards to the workers and a serious environmental problem (SNCL 2002).

Traditional Sanganeri Printing: A Health Hazard

The hand block printing cluster in Jaipur is at least 500 years old and hand prints naturally dyed textiles. But health hazards and job insecurities are inter-related problems in this sector and affect workers’ earnings. The work requires a lot of stamina and can often result in skin-related health problems. Workers have to stand or walk for almost eight hours a day, and almost half the workers in the sample said that they have to take off work for more than ten days a month because of lack of stamina. They have hardened, or dead or numb skin on their hands, from hitting the block with their palms. Further, skin-related problems through exposure to the dyes were reported by 75 per cent of the workers, who also have to work in poorly ventilated worksites.

Source: Study by IDS 2006.

  • In leather tanning, workers worked for long hours with their bare feet soaked in chemicals, animal wastes and decomposing offal (Usha 1984; Banerjee and Nihila 1999: Nihila 2002).

  • No study has found facilities such as crèche, canteen and shelter for rest or recreation of workers in the unorganised sector. Exceptions are in beedi making and cashew nut processing in Kerala. Studies carried out in these two industries all over India found that only in Kerala, the workers were provided with facilities such as crèche and canteen.

  • For historical reasons, crafts activities in the urban areas have grown in clusters, and the expansion in activity has led to overcrowding. This is true of crafts such as brassware in Moradabad, leather saddlery in Kanpur, leather tanning in Chromepet in Chennai, glass bangle industry in Firozabad, leather accessories manufacture in Kolkata, Kanpur and Mumbai, zari embroidery in the slums of Mumbai, Varanasi. Many workers live on the premises and sanitation facilaities have also become inadequate, with open sewer drainage systems and overflowing drains leading to unhygienic living and working conditions. Not many housing units or workshops have attached toilet facilities, so workers use public toilets or open spaces within the slum. Studies show that even units employing a large number of women workers have no separate toilet and wash facilities for them.

Hours of Work, Duration of Work Day and Weekly Holidays
Most unorganized workers work through the week, and days off are usually without wages. Paid maternity leave is rare, though women are sometimes given maternity leave without pay. Holidays with wages for festivals or a festival bonus seem to be in practise in some unorganised sector industries, and some receive some compensation along with festival holidays.

Industry Regulation

Various labour and industry regulations in India (Factories Act 1948; Minimum Wages Act 1948; Shops and Establishments Act 1948) stipulate that no adult worker can work for more than 9 hours a day or 48 hours a week. The regulations stipulate that the working period including rest interval cannot exceed 10.5 hours in a day. Thus a normal working hours will be 8 hours a day.

In the case of occasional overtime work, the law stipulates that wages for work done beyond the normal working hours, be at twice the rate of the normal wage received. Regulations provide for one day off from work per week with wages and oblige employers to provide workers with paid off during national holidays and on certain holidays.

  • Long hours of work in the unorganised sector have been highlighted by numerous studies In fireworks, match making, brassware, glass bangle manufacture, diamond cutting, power looms and so on, workers started very early in the morning, e.g. 6 a.m. in the case of fireworks in Shivakasi, and the work-day ended very late in the evening.

  • In Dharavi's leather accessories manufacture, it was common to start work at 8 a.m. and continued till 1 a.m. the next morning, with 2-3 half-hour breaks for lunch and dinner. The total spread over is between 15 and 17 hours a day.

  • A study of handloom sector in Kanpur found that the work was organised in such a way that wages were based on a 12 - 15 hours work/ day while in the powerlooms sector in the same town it was a 8 hours/ day.

Employment Contracts: Employment Opportunities and Recruitment Methods
Informal workers have limited job choices and low levels of mobility as finding a job is not easy: there is a no formal publicity - through newspaper advertisements or posters in public places announcing job vacancies, etc., and workers rely mainly on three ways to find jobs: by 'standing at the factory gate’ (especially in industries such as textiles, garments, powerlooms, agarbati and toys and dolls), through a family, caste and community based network and through labour contractors or 'jamadars'. Migrant labour are particularly disadvantaged if they have to get jobs at the factory gate.

Contracts of Workers in the Unorganised Sector and Unorganised Workers
Nearly all casual and almost all regular workers (above 90 per cent) in the unorganized sector did not have a written contract, compared to about half the wage workers (including casual) in the organised sector. Less than 10 per cent of the wage workers in the unorganised sector were entitled to paid leave. The regular workers in the unorganised sector were only a little more fortunate with about 20 per cent of them being eligible, against about 60 per cent of organised workers who sector were eligible for paid leave.

Gender Discrimination
There is active gender discrimination in wages: In the coir industry while a male worker earned Rs.40 per day the female is paid anywhere between Rs.25 and Rs.27. In the match and fireworks industry while the women and children were engaged as homeworkers in processes delinked from the factory, the men worked in the factory. Obviously this has implication for wages and other benefits.

Overtime Pay and Leave: There is gender discrimination in the payment of overtime wages, and the unpaid compulsory holiday during the week was treated as a break in service. Besides some of the women reported that they were laid-off for one week every two months even though they had been working in the same unit for five years.

Gender Differences in Kotadoria Weaving

Kotadoria work in Rajasthan is a family enterprise, so it is difficult to clearly distinguish gender differentials in wages. However, this is a predominantly female economic activity and the women themselves consider it a supplementary source of income. The gender differential in income is seen clear in the income of weavers compared to the income received by master weavers, typically men. While income per weaver was Rs.554 per month, the master weaver was paid Rs.5,359 per month. Other workers such as loom repairers, yarn traders, etc., received monthly incomes ranging from Rs. 600 to Rs 800.

The exploitative pattern is also evident in the unequal payment patterns between weavers and the master weaver. Weavers are subject to delayed payments, up to 6 months, and partial payments where about 20 per cent is given when completing the first 'paan' (a part of the fabric), 20 per cent after the second paan and they receive the full payment for the first paan only when the third paan is completed. Thus, at any point in time 60 per cent of the wages remain unpaid. This money is used by the master weaver as working capital to maintain the production chain, which constitutes a large hidden cost borne by the weavers.

Piece Rates and Minimum Wages
Both piece-rated wages and time-rated wages exist in the unorganised sector, though they are not specific to any industry. If an industry has both time-rated as well as piece-rated wage forms, male workers are more likely in time-rated jobs. Similarly, jobs that require higher levels of skills and education tend to be time-rated. Wage forms may or may not depend on the skill level of workers. In industries such as leather goods manufacture it was found that skilled workers worked on time-rated or piece-rated contracts, while unskilled workers were obliged to work on time-rated work contracts.

The share of wage workers securing wages below the national minimum wage norm is significantly low across industries, clearly indicating that the minimum wage regulations are hardly being applied in most industries. The vulnerable wage workers include the regular workers in the unorganised sector. Casual women workers were the worst off compared to men and to regular workers who were not particularly well off either.

Clearly there is a need for laying down minimum standards for working conditions, a national floor for minimum wages and a minimum package of social security. Given the federal character of the polity, these minimum standards should be applicable to the whole country backed by national legislation. Adding on to these minimum standards should then be left to individual states depending on their regional context and conditions.

Work and Pay Conditions of Self-employed Informal Workers
(From Chapter 4)

Self-employed is a catch-all category, including those who work on their own using their labour power, unpaid family workers and ‘employers’ (those who hire between one and 10 workers), and homeworkers - those who work out of their homes. There were around 92.1 million self-employed workers in 2004-05, far more than the number of wage workers in the Indian economy, both in agriculture and outside it.

The heterogeneity of the group makes it difficult to prescribe regulation or policies that promote livelihoods, as the latter group is largely invisible due to their location of work and have characteristics of both wage and self-employed workers. Thus it is difficult to decide who should be responsible for complying with the norms of work conditions and to what extent promotional policies should include them. In such cases the state’s role in providing minimum work conditions and addressing other promotional needs becomes greater.

Small Enterprises
The sector is dominated by small enterprises and work conditions can be improved among these enterprises if they are transformed into viable units with greater volume of business to ensure the required minimum conditions of work. Alternatively, and perhaps more realistically, they can be brought under umbrella-like associations or cooperatives or self-help groups to promote business and provide minimum conditions of work. This has been done in certain trades or industries such as handloom weavers, food processors, etc.

Own-Account Enterprises
Most self-employed workers operate in their own enterprises as owner-operators or as family labour. Long working hours and increased number of working days in a year are common practices to generate income, often just sufficient to feed the family. There is hardly any distinction between wages and profits, since the objective is to maximise income net of purchased inputs. But the current data base and system of data collection gives only a rough idea of how these enterprises function, not enough policy purposes.

The constraints faced by these enterprises include stagnant growth in the majority of enterprise, their lack of registration under the Factories Act and the lack of incorporation, which in turn led to limited access to credit, and marketing and infrastructural constraints. Competition from large units was also an important problem faced by these tiny enterprises.

Homeworkers as a Special Category
Among self-employed workers, homeworkers or dependent sub-contract workers operating from home, are an important group. They manufactures products based on the specifications of a parent enterprise or contractor, which often supplies the raw material. Manufacturing or retail companies typically "put-out" labour-intensive work that does not require heavy machinery. Under the putting-out system, homeworkers have to purchase, repair, and maintain their own tools or machines, bear the costs of some inputs (e.g., garment workers often have to buy their own thread), transportation to and from the contractor or firm, and infrastructure (space, utilities, etc.). Homeworkers, like the self-employed, are not directly supervised, but like the wage workers they typically do not market final products, or negotiate prices.

Of the 69 million self-employed nonagricultural workers in the unorganised sector in 1999-2000 about 12 per cent are homeworkers. The percentage of homeworkers is much higher among women. Out of nearly 16 million self-employed non-agricultural women about 30 per cent are homeworkers.

Self-employed workers and homeworkers run the gamut of being completely independent to being fully dependent on contractors or middlemen for design, raw material, equipment and being able to negotiate the price of the product. There are two types of subcontracting arrangements, one that contracts out production without providing raw materials (horizontal subcontracting) and the other that provides raw materials, etc. (vertical subcontracting). Most self-employed home workers in manufacturing belong to the second category (vertical sub-contracting), accounting for about 70 per cent of the total (68 per cent for men and 71 per cent for women).

Work Conditions for Homeworkers
A relatively larger proportion of the vulnerable sections of the workforce such as unpaid family workers, child workers and women workers are likely to be involved in home-based work, most often as homeworkers. Industries where home-based employment dominates or accounts for an equal proportion of industrial shed-based employment are handlooms, beedi, artistic metalware, agarbati and so on. In other industries such as garments, a large part of the production is outsourced to homebased workers (see box).

Many activities undertaken by homeworkers are conducted within a value chain, which is sometimes connected globally. Depending on the complexity in the value chains and the number of intermediaries in the chain the bargaining power of the homeworker is reduced. The distance between the final consumer and the homeworker also creates ambiguity with regard to who is responsible for providing higher wages and social security benefits. The number of intermediaries and the bargaining strength of the homeworker have implications for the share of the final consumer price that accrues to the homeworker. There may also be sector-specific technology-related factors, which determine the homeworkers' earnings.

Home-Based Work: Mixed Outcomes

Home-based work has some advantages for families. Primarily, it offers employment and hence an opportunity to enhance and diversify incomes. It saves on travel time and offers workers flexibility in their tasks. Men usually pursue another economic activity (such as agriculture in rural areas or seasonal work). Women can carry out their domestic responsibilities, while contributing to family income. The work and experience gained can trigger entrepreneurial capabilities in some workers and subcontractors, and lead to the setting up of small units.

These advantages are severely masked by the disadvantages faced by homeworkers. In India, with its surplus labour, piece rates to homeworkers are very low. Work conditions can be exploitative if there are few alternative opportunities or if work is available only as bonded labour. The exploitation of the homeworker by local employers can be just a first step in exploitation through the global value chain. Homeworkers have little or no access to markets and final consumers, and the lack of unionisation can also be an important source of vulnerability of homeworkers. Child labour is an important part of homework, often necessitated by the need to generate additional income for the household. Efforts to regulate illegal labour practices such as child labour in hazardous industries have often led to a shift of production from industrial sheds and workshops to home-based settings. In fact, it shifts the illegal labour practice from more organised industrial settings to unorganised settings of home-based production

Homeworkers earn very little, are paid on piece rate, at very low rates, and are often dependent on the middlemen for work and wages. Enterprises involved in contract work at home (homework) received annual incomes much lower than the other enterprises. Studies show that for a commodity that costs Rs.100 to a consumer, homeworkers receive Rs.15 in zardoshi; Rs.17 in beedi, and Rs.2.3 in incense sticks/agarbatti. Women homeworkers receive daily wages of around Rs.27, far below any acceptable norm (Table 4.13).

Table 4.13: Annual Incomes (Rs) of Homeworkers and Non-Homework Enterprises in India 1990-00
Enterprise on Contract Work Home Work Non-Homework
  Organised Unorganised Organised Unorganised
Casual Worker 21.9 23.1 35.0 41.5
All Workers 11.2 17.2 10.4 24.1
Self Employed 11.2 15.9 11.4 21.4
Regular Workers 5.2 11.5 6.8 20.2
Source: Unni and Rani 2005a

Further, homeworkers often do not have adequate work throughout the year. There is seasonality in the work with wide variations in the hours of work available per day and also the wages received per day. In a survey of beedi, agarbatti and zardoshi work, women homeworkers received as low as Rs.27 in the peak season and worked for nearly 7 hours. In the lean season they work, on average, for less than 5 hours and received even lower wages of less than Rs.6.

Home workers are often subject to the exploitative practice of middlemen to deduct wages for 'rejection' and withholding partial payment to maintain a hold on the worker, discouraging him/her from leaving for competitors. Home workers tend to remain with the same contractor, even in the absence of written agreements or benefit payments. The inertia in seeking alternatives is accounted for by the high opportunity costs of change (i.e., lack of alternative or excess supply of labour), debt bondage, delayed payments, and contractors preferring to keep workers isolated. Delayed payments are common (in zardoshi, for example, there are delays in nearly 4 out of 10 cases), and collective action is discouraged as work is denied to the most vocal leader amongst workers.

Home-workers in Beedi-Rolling

Beedi-rolling is one unorganized sector activity regulated under the Beedi and Cigar Workers (Conditions of Employment) Act, 1966. Iin the early 1970s in many areas, beedi-rolling was mainly undertaken in factories. By the 1980s beedi-rolling shifted to the household sector mainly as home-based work, probably due to better implementation of the provisions of the Act and the larger proportion of women engaged in this activity.

In many parts of Tamil Nadu, for example, beedi-rolling is undertaken as a family enterprise. Women who work in beedi-rolling also work as assistants in activities like ring-making, leaf-cutting, closing beedi ends, etc. Assistants do not receive wages, but their productivity is added to the main worker.

Rejection, Supply and Quality of Raw Material: Since the 1970s a minimum wage was fixed for beedi rolling, but workers rarely received this wage. Two methods were used to reduce wages: workers received insufficient leaves and tobacco to make 1,000 beedis, so they had to buy the extra inputs to prevent the contractor from refusing the beedis or denying them further work. A second method was to demand 110 beedis instead of 100 and then reject 10 beedis on the grounds that they were not of the specified size. After all these deductions the worker received about two-thirds the stipulated wage.

Rejection of beedis on the grounds of poor quality and supplying less than the required amount of raw material were methods used to reduce wage payments and keep them below minimum wages. Some contractors in a study reported, "Sometimes we reject all the beedis of a worker intentionally and this is not due to any sense of revenge but just to make up our own expenses. And therefore we sell these beedis in the market at higher rates".

Indebtedness: With low levels of income and uncertainty in employment in the beedi industry, workers cannot meet their basic necessities and their level of indebtedness is very high. According to a survey in Tamil Nadu (Saravanan 2002) of 71 respondents, 30 per cent had loans of less than Rs.1,000 while the remaining 70 per cent were indebted for more than Rs.10,000. A few among the latter had borrowed even up to Rs.1,00,000. Since most beedi workers did not have land or other assets to offer as collateral, they had to rely on contractors or non-institutional sources like moneylenders, relatives, friends and neighbours for credit..

Health Problems: Most studies reported that homeworkers suffered from health problems, mainly respiratory problems from inhaling tobacco dust and body ache from their restricted posture during long hours of work. Beedi-workers commonly suffered from asthma, tuberculosis, spondilitis and back-strain (ILO 2003).

Textile Industry: Case of the Handloom Sector

The ancient occupation of handloom weaving continues to be the main source of livelihood of a large number of families in the country - over 2.5 million according to a census conducted in 1995-96. This occupation is the lowest in the hierarchy of technologies of textile manufacturing. While the overall factory system of production at the top has been on the decline, the intermediate technology of power looms, organised in small factories and workshops, has been expanding based on both low production costs and the use of electro-mechanical technology. While the handloom sector also has low and higher productivity looms, and a consequent differentiation in the quality of product, the socio-economic correlate is that it is the occupation of a largely poor artisan community. The existence of a multistructural mode of production combined with the livelihood imperatives of large numbers of people has presented this industry as a classic case of the dilemmas involved in technological change.

Given the employment and livelihood dimensions, state intervention was a major source of support to the industry and the families involved in it. Several items were reserved for production in the handloom sector, which also received tax concessions. A National Handloom Development Centre was set up, and a Development Commissioner for Handlooms coordinated the central government's initiatives in supporting and promoting the sector. Several state governments actively supported the formation of weavers' cooperatives and marketing support systems such as para-statal marketing organisations and provided relief and welfare programmes for handloom workers.

Policy Shift Induced Decline
The initiation of economic reforms spawned a paradigmatic shift in policy. State support was gradually reduced, the list of items reserved for the handloom sector was curtailed, the schemes for the production and procurement of cheaper cloth under the Janata Cloth Scheme were dissolved in 1996, and tax concessions to the sector were withdrawn. With the objective of maximising exports, cotton and yarn were increasingly exported, leading to a higher input cost for the handloom sector. The ‘leveling of the playing field' worked to bring down the already meager standard of living of the workers and their families that perhaps added momentum to the decline of the industry.

The policy shift, first in 1985 and then more forceably in 1996, led to a crisis of survival for handloom workers and their families. In Tamil Nadu and Andhra Pradesh it led to suicides and starvation, unemployment and unrest. For example in Dubakka, a well-known and once prosperous handloom centre in Andhra Pradesh, the number of looms declined from 1,500 to 700 in April 2001. While the fragmented and unorganised handloom workers here sought refuge in suicides, the better organised handloom workers in many parts of Tamil Nadu took to public protest by organising hunger marches to the capital city, Chennai, and other towns.

The decline in the handloom industry was accelerated by the advent of powerlooms, mainly because there is no demand for the skills of handloom workers in powerlooms. While it would be desirable to have a technological shift to enhance productivity and income, the losers are not necessarily the gainers, and calls for policies for rehabilitation and provision of sustainable livelihood mechanisms.

Data from the Handloom Censuses
The two censuses conducted in the handloom industry (in 1987-88 and in 1995-96) reveal some worrying trends. First, a decline in employment - 34.7 lakh handloom weavers and 25.2 lakh households were engaged in the industry in 1995-96 against 43.7 lakh handloom weavers and 30.6 lakh weaver households recorded in the earlier census. Second, is the decline in productivity per loom and per worker.

Recent NCEUS Studies of the Handloom Industry
NCEUS carried out studies of the handloom industry in Uttar Pradesh and Bihar to assess more current conditions. Fixed capital investment in looms in Uttar Pradesh ranged from Rs.42,000 to just above Rs. one lakh (Table 4.10). Most of the weavers reported having invested in the loom in the last five years. The average investment per unit per year was however quite minimal and was probably only in the maintenance of the loom. The average annual income received per weaver was a modest Rs.26,000 -35,000. The situation in Bihar was just a little worse: fixed capital investment, investment per year and the average incomes were lower.

Table 4.10: Investment in Looms and Weavers' Earnings in Uttar Pradesh (Rs) 2006
  Azamgarh District Bijnore District Varanasi District
Food Capital Investment in Loom 106820 43533 42833
Investment per Unit per Year 1865 1239 2580
Average Income per Weaver 34754 26532 34030
Source: A.K. Singh et. al. 2006

In Andhra, weavers operated within different forms of organization: they worked in a co-operative, under a master weaver, as contractual workers through middlemen or as independent, self-employed weavers. Within each system they operated either from home, a work shed or through the karkhana system. Independent weavers had the highest monthly income of Rs 7,000, while workers in karkhanas in both the co-operative and master weaver systems earned the least, about Rs 1,200. Again, the majority of these workers, 63 per cent, were below the poverty line. Nearly 40-50 per cent of the weavers under the other systems were also below the poverty line with the exception of the independent weavers.

Handloom Demand and Employment: The sample households in Uttar Pradesh reported a decline in the demand for handloom products. This resulted in the closing down of almost 40 per cent of the working looms, which in turn directly affected employment. Weaving is a household activity and all the members of the household including the children, and hired workers, are involved. Faced with a decline in demand, households try to retain as many activities as possible within the family units and reduce the number of hired workers. The number of family workers declined from 220 to 207 in the last five years, while hired workers declined from 457 to 211, less than half.

Problems of Raw Material and Marketing: The problems of raw material supply and marketing were closely linked. Over the last decade weavers have become highly dependent on traders and co-operative societies for their raw materials and product marketing. Traders are typically wealthy and able to procure orders from a wide network across the country, and even abroad. Often even co-operative societies obtain work orders from them.

Weavers, whether working independently, within the co-operative structure or under master weavers, formed part of this marketing chain and were reduced to a sort of putting-out system. Selling in the local market is not a good option as prices are very low. The high dependency on traders or co-operative society for procuring orders and the closed framework of raw material supply and marketing means that weavers cannot bargain for better prices.

Deferred Payment and Indebtedness: Local weavers often do not receive their payments on time, and this deferred payment is another reason for the reduction in incomes. Two-thirds of the respondents in the survey in Uttar Pradesh also reported that they had taken loans, mainly from the co-operative society and also from friends and relatives. Very few took bank loans, as there are no special provisions for weavers to access bank loans; the average loan taken was about Rs. 23,000.

Technology: Most of the weavers still used traditional pit-looms rather than the frame looms. New designs and products were available, and the quality of dyes had improved, but only half the respondents adopted these changes. Some reported that the increase in cost from adopting the new inputs was about 10 per cent, but the returns to these investments were lower, which dissuaded them from applying the new methods. More pervasive was the shift in from only producing sarees to dress materials. Also marked was a shift from weaving only with natural fibres such as silk and cotton to synthetic fibres.

Since much of the handloom industry is homebased, a major constraint noted was the poor and traditional work environments. The thatched roof, if not repaired regularly, often leaked, and the water stained the cloth. Orders for stained products were often cancelled, and this resulted in losses; the weavers tried to sell the products on their own leading to even lower prices.

Women Workers
(From Chapter 5)

The overall picture is one of greater disadvantage for women workers in general and those belonging to rural as well as SCs/STs in particular. Apart from such inherited disadvantages as lower social position, a number of other factors also contribute to such a picture. These are their limited asset position, access to resources, and low level of education and skill. Education, and consequently some ability to acquire formal skills, could be a moderating force but this aspect presents a dismal picture. About 71 per cent of the women workers in India are either illiterates or have education only up to the primary level compared to 49 per cent for men. For rural women this is as high as 88 per cent but the highest percentage with such low education are the women workers belonging to SCs/STs i.e. 92 per cent. The overall situation of women workers calls for interventions of a promotional nature from different entry points but with a strong emphasis on education.

While women workers in general constitute a marginalised category within the class of workers, there are different layers within this subordination. Rural women workers occupy a lower position compared to their urban counterparts. But the lower most layer is constituted by those belonging to the bottom strata of the society i.e. SCs and STs. This kind of stratification also brings out that women who are at the upper social stratum especially with higher educational capabilities are better off than the rural men workers in general. The inescapable conclusion is that while gender is a strong differentiating factor in the Indian labour market it is mediated by one's class and caste/ community position in the society.

Women workers have a 'double burden of work' and for those in the informal economy the burden of combining production and reproduction is even more arduous because their work activities require long hours to obtain a subsistence wage. However, while women workers are a marginalised category within the class of workers in general, there are layers of subordination determined by social and economic status. The position of women workers in rural India, for example, is considerably lower than that of women in general, and urban women workers in general are better off than even rural male workers, except for those who are SCs and STs.

In spite of the stress from the double burden of work, economic conditions force many women to be available for additional work. More than a third of the women engaged in domestic duties for most of the year by principal status said that they would engage in productive activities if they could work from their homes. The type of activities they are willing to engage in are mainly spinning, weaving and tailoring in rural and urban areas and animal husbandry in rural areas.

Women workers have restricted mobility, and as a result, their capacity to engage in economically productive work is restricted. In 2004-05 only one-third of the women workers (about 10 million) worked in conventional places of work – an office, factory or institution.

Nature of Work Participation of Women
Women in general have lower work participation rates, except for rural women, where participation rates are higher and almost equal to men. These rates are higher for women belonging to SCs/STs than the other women.

Higher work participation rates per se do not indicate a higher level of welfare, but point to economic compulsions driving women to engage in whatever work that comes by in order to make a living. Only when higher work participation rates are accompanied by higher educational capabilities and/or asset and income (as in the case of a section of urban women), higher work participation rates become meaningful from a welfare and, especially, income point of view.

Women's work participation rates reflect the twin characteristics of their work: the double burden of productive and reproductive responsibilities and being confined to non-conventional spaces of work. These together with poor access to human and physical capital lead to a far lower participation rate for adult women in the workforce than men. The disparity in work participation between rural and urban areas is also large.

A higher work participation rate is more likely the result of economic hardships than the availability of work opportunities. Work participation rates for SC and ST women are significantly higher than for women in general. Low education levels are a serious handicap not only for women workers in general but for rural women in particular. Here again the bottom layer is the rural women belonging to SC/ ST categories.

The lower work participation rates conceal in good measure the subsidiary status of the work of women. A quarter of the women workers report themselves as in subsidiary status compared to just 2 per cent of men. Although women work for more time (including activities that are not recognised as economic work as such), they reported as available for additional work. One-third of them were available for work if that was based at home. Despite lower earnings, home-based work offers them the flexibility to calibrate income-earning activities with household responsibilities.

Conditions of Women's Work
Conditions of work especially of women wage worker, are quite dismal. Women workers are also subjected to various forms of discrimination including job-typing which gives them a lower wage compared to men. Among the women wage workers, a significant proportion (54 per cent) is reported as regular workers. As we have seen, this, in no way, indicates a higher labour status since more than half of them work as domestic servants (reported as workers in private households) where longer hours of work, very few holidays and lower wages are the prevalent norm.

The position of self-employed women is only marginally better than of the wage workers. Their capital base is low and consequently their value addition is also low. One third of them operate from their own homes.

Gender Discrimination
Gender discrimination is not always overt, but appears in very subtle forms in the nature of work performed, skills required to perform the work, valuation of these skills and differences in technology used by men and women.

Sexual Division of Labour: There is a clear gender-based division of labour, which has been augmented and facilitated by the introduction of machines.

Gender Discrimination in the Tiruppur Garment Industry

Women workers in the garment industry in Tiruppur are typically the lowest-paid workers, and receive substantially lower wages than men. The fashion masters are the most skilled workers in the industry, but this category is reserved for male workers. Female workers are usually helpers in these units, with almost no opportunities for moving up from helpers to attendants, while male workers are able to make this shift. This very clear sexual division of labour has an impact on wages, job permanency and upward mobility in the industry. Clearly, women receive lower wages and have limited job mobility in the hierarchy of the knitwear industry (Neetha 2002). The Commission's visit to the garment factories in Tiruppur confirmed these features of the industry

Valuation of Skills: Within the hierarch of jobs in most industries, women rank lowest. This hierarchy of jobs is used to value the jobs where women are concentrated as low skilled even if they involve exceptional talent and years of informal training.

In the garment export industry the hierarchy is such that men ware supervisors since men tailors "do not like to take orders from women". In the supervisory category usually women supervised only women. Men tended to be placed in all the 'critical' skilled jobs and were consequently paid higher wages. Hand embroidery done by women was the most skill- and time-intensive, but received the lowest wages, i.e., women's skills were systematically undervalued. Studies reveal that women also did the most monotonous jobs, such as checking, button-stitching and thread-cutting, the drudgery was greater and wages were lower (e.g. Rao and Husain 1997). In the textile and wearing apparel industry all jobs done by hand and involving minimal or low-level equipment is delegated to women. The myth of "nimble fingers" is also used to relegate most work done by hand to women. So while women sew buttons, do the hemming and hand stitching, they also do the embroidery, zardosi and stitching of sequences to fabric. This latter is a very skilled activity, but valued very low because it is seen as women's work.

Similar examples can be found in almost all industries. In the ceramic industry or brick-kilns, the preparation of mud or clay is a skilled activity. If the consistency of the raw material is not correct, the pots will disintegrate and houses built of the brick would collapse. This work is done by women but is valued as one of the lowest among wage workers, and thus paid the least, well below minimum wages.

Number of Women Workers in Non-agriculture
Half the 22 million women non-agricultural workers in the unorganised sector (1999-2000) were independent self-employed workers. Of these, nearly 29 per cent or 7 million were wage workers,a nd about 5 million or 21 per cent were homeworkers, or disguised wage workers. The major difference in the rural and urban workforce was the higher share of independent self-employed women workers and also a higher share of homeworkers in rural areas.

While it is difficult to separate homeworkers from self-employed, the total number of self-employed women was 21 million in 2004-05 (70 per cent of the workforce in the unorganised sector), an increase from 15 million in 1999-2000 (71 per cent). Some proportion of the increase in self-employed would constitute an increase in homeworkers. The proportion of women wage workers grew in the unorganised sector from 29 per cent to 30 per cent during the period, or from 7 million to 9 million workers.

Conditions of Homeworkers

Hours of Work: Women homeworkers worked for about 7 hours a day at their peak season, but face a major problem of seasonality of work. In the lean seasons women received only around 4 hours of work per day. Home-based weavers and hand-made paper makers reported that the peak season was for about 7-8 months in the year. Some workers also reported months with no work at all. Such seasonality of work reduces the incomes they can earn.

Value Addition in Homework: Homeworkers were subject to direct exploitation by the contractors for whom they produce. Work activity is conducted under different types of contracts, one of the more exploitative of which is piece-rate work. About 79 per cent of women and 63 per cent of men homeworkers are paid on a piece-rate basis.

Homeworkers are dependent on the subcontractor for work orders, raw materials and the sale of finished goods; they are also isolated from their fellow workers in the trade. This dependence on the contractor together with the isolation undermines their ability to bargain for higher piece-rates, timely payments or overtime pay.

Piece-rate Wages and Hidden Costs: Piece-rate wages received by most home workers have many hidden costs, including use of the house and electricity. Delayed payments and arbitrary cuts in wages on the pretext of poor quality also add to the hidden costs

"Hidden costs" borne by Homeworkers

In Imphal, home-based weavers earn Rs.90 per piece of mekhla (sarong) or cotton/woollen shawls over two days. The piece rate has however gone down since the last year to half, Rs.45/ per piece due to an increase in the number of weavers. About 22 per cent of the home-based weavers and 44 per cent of the handmade paper makers reported problems such as delayed payments which added to the "hidden costs". A women silk mekhla sarong homeworker in Imphal can earn Rs. 600-700 per piece over seven days. But the "hidden costs" are that the trader or contractor who contracts this work can return the sarong even after two to three years if it remains unsold.

(Homenet South Asia and ISST 2006).

Complicated designs and changes in design dictated by fashion trends without any training also add to costs as workers have to learn the new work from family friends or neighbours, which utilizes the valuable time of both the informal trainers and trainees. Some not so hidden costs are the cost of inputs such as thread for garment workers and maintenance of equipment. All these are often not factored into the wages leading to extremely low net wages per day.

Girl Workers: Although girls are only 2.6 per cent of the total women workers, the problem of out of school females is a larger one (discussed in the next chapter).

Child Labour

There has been a decline in child labour in India, attributable to increasing awareness, higher enrolment in schools by children from poorer households, through efforts by the state, national and international organisations.

Everyone involved in the effort to eliminate child labour recognises the close relationship between provision of primary education and the elimination of child labour. All out-of-school children can be considered a potential labour pool, always at risk of entering the labour force. They constitute nearly 18 per cent of children; 15 per cent boys and 21 per cent girls. Muslims in general were better off than the Hindu SCs and worse off than the Hindu OBCs. The artisan tradition among the Muslim community may partly explain the higher incidence of child labour, apart from the relative deprivation of the group.

Conditions of Work
There were about 9 million child labourers in 2004-05, mostly in the rural areas. The percentage of child labour was also slightly higher in the rural areas, 3.7 per cent compared to 2.5 per cent in urban areas. About two-thirds of the children were engaged in family enterprises as helpers, while more than one-third were engaged as paid wage workers. However, in urban areas, nearly half the child labourers were wage workers.

Two-thirds of the child workers are engaged in agriculture, as most working children help on family farms, but sector still accounted for 72 per cent of the casual wage child labourers and 9 per cent of the regular workers. Nearly one-fifth of the girls and 14 per cent of the boys worked in manufacturing industries and another 10 per cent of the boys were engaged in trade.

India's child labour policy is two-fold: a ban on child labour in hazardous industries and regulation of child labour in others. Unfortunately, child workers continue to be employed in hazardous industries as well as in others. A large proportion of the children engaged in manufacturing (which is the second highest industry group using child labour) are likely to be exposed to the risk of being in such hazardous occupations as wage labourers.

Industries employing child labour are highly fragmented with complex structures where much of the work is done through a system of subcontracting to small, unorganised sector enterprises (home-based and otherwise), which are paid on piece rates. Part of the complexity of the industrial structure and the forms of subcontracting are a result of efforts to evade child labour regulations and other similar measures. Independent researchers have found child workers in large numbers in home-based industries such as beedi making, match industry, carpet production, lock-making, glass-bangle making, hosiery and so on, all identified as hazardous industries under the Child Labour Act of 1986. There are blatant violations of the law and human rights in the small workshops where children continue to work in dangerous working conditions.

Child labour helps employers by depressing general wage levels in these industries. The general finding of recent studies on working conditions of children is that child workers worked as much as and as long as adult workers, and received no wages (as apprentice) or a fraction of the adult wage, which was itself very low. They faced inhuman and even dangerous working conditions. Scholars have observed that within the unorganised sector, child workers are the worst affected. Not only have they lost their childhood and opportunities for education, they face work conditions at par with or even worse than adult workers, since they do not have the bargaining power to demand their rights.

Any national policy that aims at improving the conditions of work in the unorganised sector should aim at elimination of all types of child labour. Since the banning of child labour through legislation (confined to the hazardous industries) has not been effective, further legislative effort should aim at regulating child labour and restricting their e

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