- A study of government data commissioned by the Economic Advisory Council to the Prime Minister “Emerging Employment Patterns of 21st Century India”, indicates a shrinking of options in formal employment and stalled labour reforms.
- The study looks at employment data from three comparable surveys of the National Sample Survey Organisation (NSSO): The Employment-Unemployment Surveys of 2004-05 and 2011-12 and the Period Labour Force Survey of 2017-18.
- Non-Contractual employment not only pays less money for the same amount of work but also provides little by way of security of job or work conditions.
- According to the study organised sector in India has begun to increasingly opt for casual — non-contractual — employment between 2012 and 2018. in 2012 the organised sector employed 2.44 crore on non-contractual terms and 2.65 crore on contractual terms. In 2018, however, the respective numbers were 3.61 crore and 2.80 crore.
- It also found that since 2004, the rate of population growth has been almost twice the rate of growth in jobs.
- It finds that not only the rate of employment growth (at 0.8 per cent) over this period is far slower than the rate of population growth (1.7 per cent), most of the employment generated is of casual nature (see table).
- One obvious explanation for businesses preferring casual labour over formal contracts is the inflexibility of Indian labour laws.
- Stringent labour laws not only make it difficult to hire and fire employees depending on the economic situation but also make it costly, especially in light of rising minimum wages, to employ people formally.
- However, there could be other contributory factors as well. For instance, if an educated individual was not formally employed with any one company and was freelancing without necessarily signing a contract. Therefore, more study is required on this subject to understand this trend.