ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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India’s Labour Reforms

The Informalisation of Work and Growth of Semi-formal Employment

The changes to the nature of employment in India are evaluated in the context of deregulatory labour reforms. A distinctiveness in the current government’s approach to labour (de)regulation is identified, locating it within the longer-term processes of informalisation, contractualisation and casualisation of work in the country. Contrary to the notions that such reforms create formal employment, they deteriorate the quality of jobs, and the nature of employment then being created can only be characterised as semi-formal. This is seen in the dissolution of the formal–informal binary as informality is increasingly incorporated into the formal employment.

The author would like to thank the organisers of the Leeds Disrupting Technology conference, colleagues and the journal’s anonymous reviewer(s) for their helpful comments. Any errors are of the author’s.

India’s transition to a market-oriented economy witnessed the gradual liberalisation of product and financial market regulations. However, labour regulations did not change apace as attempts to deregulate Indian labour laws and legislations were often countered by workers and trade unions, res­ulting in the facade of labour regulations remaining relatively intact. Despite this, a proliferation of non-standard and informal employment relationships gradually served to erode the quality of employment in the country. This happened through the expansion of precarious contractualised and casualised employment, resulting in relatively unregulated forms of work becoming the new normal within the country’s formal sectors despite several decades of substantial economic growth.

Over the years, Indian employers deployed various strategies to circumvent labour regulations, curtail workers’ rights and deny employment benefits. However, following liberalisation, the state provided more overt support to such practices. This direction, somewhat inadvertently and prematurely, culminated in a situation where several local states attempted a near-total suspension of all labour regulations using the COVID-19 pandemic as a pretext (Sundar and Sapkal 2020). Though this endeavour was thwarted through expeditious protests and legal challenges, the episode nevertheless revealed how labour rights and welfare were now limited to encouraging employment, with most labour market institutions being firmly viewed by the state as being secondary to or even hindering certain objectives of economic development.

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Updated On : 19th Nov, 2022
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