Vulnerabilities of workers and unfair labour practices causing marginalization and life of indignity (SDG 8)

Promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all

SDG 8 calls for maximising the growth rate of the global economy by increasing employment opportunities, particularly for young people, reducing informal employment and the gender pay gap and promoting safe and secure working environments to create decent work for all.

In India, a country of 1.3 billion with a large and growing youth population, the implementation of SDG 8 posed a challenge in 2015. Today the challenge has become more formidable. The economic slowdown, gender and wage inequality, and unemployment/ underemployment have affected India’s GDP growth rate which is slowest in the last six years at 4.8% in January 2020. The weak economy threatens to dampen the growth of businesses exacerbating labour market challenges, especially for those people who already face various forms of vulnerabilities based on gender, social, and economic status. The government’s desire to rehabilitate a flagging job market relies far too heavily on deregulation of industrial policies and labour law reform. The proposed four new labour codes do little to protect workers while giving many concessions to the industries and big corporations. Further, the NITI Aayog, the nodal institution responsible for officially reporting on the implementation of SDGs in India, does little to measure actual progress, particularly of the key stakeholders such as the private sector. Its tenets do not align with efforts proposed by the other ministries, such as the Ministry of Corporate Affairs,’ which has prescribed ‘National Guidelines of Responsible Business Conduct’ according to those enshrined in the ‘United Nations Guiding Principles (UNGP) on Business and Human Rights’.

The effect of the demonetization and the GST regime have been most severely felt by the traditional and informal sector, such as the Micro, Small and Medium Enterprises (MSMEs), unorganised sectors etc. The recent report by the ‘International Financial Corporation’ (IFC 2018) observed that there is a credit gap of about Rs 16.66 lakh crore (about $240 billion) for growth of India’s MSME sector in 2019. It is pertinent to mention that MSMEs sector have emerged, as largest subsidiaries for multinational production value chain. In such financial shortfall, MSMEs relied on informal institutions to sustain the cash flow. But traditional financial backbone was destroyed by demonetisation and GST both. As a result, the MSME sector faced a reduced growth rate from 43.12% in 2014-15 to 11.93% in 2016-17. This also implies that a large number of people who were entrepreneurs were forced to take precarious jobs, due to lack of relevant livelihood opportunities matching their skills.

Amidst the micro and macro-economic crisis, the union government has aggressively pushed the agenda of labour law reform[TR2] , by stating the intention of simplifying old and complex 44 labour statutes, to improve the business environment, harmonize labour market, and increase employment. In short, improving the ranking of India in the index of ‘Ease of Doing Business’ (EDB), and Foreign Direct Investment (FDI) have led to the demand to simplify the labour law, particularly from the business fraternity. However, the ‘World Bank Enterprise Survey 2014’ which says only 4.9% Indian firm has complained about the challenges of labour laws, whereas the bigger problem is taxation reported by 23% business firms, 19% have complained about lack of access to credit, and most important, the inconsistent electricity supply reported by 23% business firm.  The trade unions have called these reforms – an anti-working class, anti-industry, perhaps pushing India back to ‘British Era’ or ‘Modern Day Slavery’. It is pertinent to mention that India’s labour law has a history of 97 years. Every piece of legislation has a rich history of working-class struggle before its enactment. Currently, 44 central labour[1] laws deal with wages, social security, occupational safety, working conditions and health, and industrial relations. Labour is on the concurrent list, giving both central and state governments the power to legislate, resulting in more than 100 state labour laws[2]. The deregulation premise was set on the basis that investment and production in the manufacturing industry were held back due to heavy regulations and procedures. But the situation is far from reaching the mentioned goals. India has improved its rank in EDB from 142 to 77 in 2018, but despite that, the FDI report 2019 released by the Indian Govt says that FDI growth rate has been consistently going down from 23% in 2015-16 to 2% in 2018-19. Ironically, governments sincere efforts to consolidate and modernise labour laws to push Governments ambitious plan in form of ‘Make in India’ policy may not produce expected impact (FDI 2019, 4). To illustrate, State Govt such as Rajasthan, have deregulated industrial policies by undermining principles of central labour laws have backfired badly. The Govt have experienced militants strikes, lock down of establishments, massive retrenchments etc[3] (Chawla, et al. 2018).

Clearly, the economic and labour market indicators are showing troubling signs. GDP growth has slowed from 8% in 2016 to 4.8% in 2019. Private consumption has been the driving force behind India’s economic growth for a long time which has been declining and weakening household income and asset accumulation. One can imagine the plight of workers by just looking at the recently reported ‘Consumer Expenditure Survey 2019’, which show the average family expenditure in rural areas to be Rs 83 per day and in urban areas as Rs 134 per day. These figures show how workers continue to live in exploitative and marginalised conditions. One can imagine the situation by looking at the Reserve Bank of India (RBI) data on retails inflation rate. RBI’s medium-term target for retail inflation rate is set at 4%, but unfortunately it has crossed the limit and reached 4.62%, which is highest in the last 16 months. This is mainly due to higher food prices in October 2019. To summarize, the major reason behind weakening household income is the lack of work opportunities, gender/caste inequalities, and relevant skill development.

To understand the situation in detail, the paper is structured to analyse two core concerns:

Firstly, Chapter 1 will be looking at the laws and policies related to issues of labour and decent work (SDG 8.3, 8.5, 8.7 and 8.8). It will report on increasing vulnerabilities of people and communities related to businesses and the private sector which perpetuates marginalization, exclusion, and exploitation, followed by what the SDG reporting framework developed by NITI Aayog.

Chapter 2 then juxtaposes the issues covered by the legal-policy frameworks and the lack of its reflection in NITI’s SDG reporting framework, which is just skeletal and moreover hiding the key issues that are at the centre of SDG 8. It further elaborates the mismatch between the availability of data on business responsibility and accountability towards vulnerable and marginalized sections and the existing reporting framework on SDGs. On this background, the paper will present recommendations for business fraternity, government agencies, trade unions, CSOs and the UN agencies.

Chapter 1: Vulnerability and Marginalisation[TR3] 

Indian economy is characterised by vast unorganised sector and informal employment. There is debate over the actual size of the unorganised sector due to insufficient and unreliable data. But as per the Economic Survey of 2018-19, the unorganised sector is directly employing about 83% of the workers and another 9% are employed informally in the organised sector. Thus, around 92% of the workers are employed informally while the rest are employed in the organised sector. Such workers enjoy sugar-coated workers-right which includes social security, precarious free work environment and strong statutory labour law regulations.

This segment of working-class is facing challenges of migration, trafficking, bonded labour, child labour, wage disparity, and stagnant growth of wages as a result of structural inequality of caste, class and gender. Most people in India cannot afford to be unemployed; they must work in precarious conditions to sustain themselves. Such informal sector workers are forced to work into the unorganised sector or in informal employment pushing workers into low-productivity work, with poor wages, with the absence of social protection (Dewan and Prakash 2019). This can be very well understood by looking at employment growth which is going negative at -0.17% (Mahesh Vyas 2019).

SDG 8.3: Key issues (Formal/Informal employment and MSME)

We are beginning by taking the classic case of MSME sector, which provide large employment opportunities at comparatively lower capital cost than large industries. The reach of the sector has been extended to rural industrial pockets as well as most backward regions of the country. The sector has the potential to reduce regional imbalances, assuring more equitable distribution of national income and wealth. As per the National Sample Survey (NSS) 73rd round, 633.88 lakh unincorporated non-agriculture MSMEs engaged in different economic activities (31% in manufacturing, 36% in services and 33% others). These MSMEs accounts for 31% of India’s GDP, 48.1% of exports and 45% of total industrial production. But even after such high performance of MSMEs, this sector is considered as high-risk borrowers due to their lack of assets, high-risk businesses, and low capitalization. The recent report by International Financial Corporation (IFC 2018) observed the credit gap of about Rs 16.66 lakh crore (about $240 billion) for growth of India’s MSME sector in 2019. In such financial shortfall, MSMEs relied on informal institutions to sustain the cash flow. But their traditional financial backbone was destroyed by demonetisation and GST both of which crunched the cash flow in which informal institutes were sustaining. As a result, the MSME sector faced a reduced growth rate from 43.12% in 2014-15 to 11.93% in 2016-17.

Table 1: Source: Central Statistics Office (CSO), Ministry of Statistics & Programme Implementation

The ground reality of the flagship policies introduced in the last 5 years to strengthen the MSMEs sector (such as Skill India, Make in India or Mudra Loan) is either abetting or ignoring the historic exclusion of gender, caste ethnicity, and religion which is further increasing disparity in the Indian economy.

To illustrate, the ‘Make in India’ policy which was launched in 2015 to transform India into a global design and manufacturing hub but it faced major challenges in its implementation. It failed to compete with the international market standards as India lacked the required skill development and capacity building resources to innovate industrial technology. This implies the failure of another flagship programme – Skill India. The attitude of the government towards deregulating labour market increased insecurity within labourers; decreased ability of trade unions to protect members; and reduced social accountability of business in the workplace. Economist Rahul Sapkaal analysed PLFS and NSSO data and he finds that if workers are a union member, their chances to access statutory entitlements may be increased by 72%. This mean union is an important institution for the right to association and collective bargaining.  This situation is feared to worsen further by the new development of ‘Industrial Relations Code Bill 2019’ allowing employers to easily hire or fire the workers and by diluting workers right to negotiate terms and wages (Shreehari Paliath 2020).

The required investment and supporting administrative changes in the policy framework expected from the government also did not solve the problem of investment insecurity among potential businesses and start-ups (FICCI and Pinkerton 2018). To illustrate, if we look at the World Bank’s Ease of Doing Business (EDB) index, India has improved in rank from 142 to 77 in 2018 but despite that, the growth of manufacturing sector slumped to a miserable rate of 0.6 % in 2019 from 2.6%  in 2014 (Table 2). As a result, the country has lost almost 11 million jobs in 2018 and has consistently performed poorly in the ‘Global Rights Index’ by the International Trade Union Confederation (ITUC)[4] with a  score of 5 which reveals the absence of workers’ rights and regular occurrence in violations of labours codes.

Table 2: The Declining growth rate of the manufacturing sector

The deregulation premise was set on the basis that investment and production in the manufacturing industry were held back due to heavy regulations and procedures. Surprisingly, as per the FDI 2019 report, the growth rate of FDI has been consistently going down from 23% in 2015-16 to 2% in 2018-19(FDI 2019, 4).

Similarly, the Centre for Monitoring Indian Economy (CMIE) reported an increase in India’s average unemployment rate at 7.7% in December 2019 (Mahesh Vyas 2019). Another report by economic policy think-tank ICRIER in January 2019 found that manufacturing industries were hiring more informal workers on short term contracts – increasing the share of contract workers from 20% in 2000-01 to 38.87% in 2015-16 and share of regular employment had fallen by 10.8% in the same period. Such workers get paid less, have poorer working conditions, and no job security (Table 3). Further, only one in two Indians of working age (15 years and above), participates in the labour force (NSSO 2017-2018)[5]. Only 23.3% of women enter the labour market. Female labour force participation has declined consistently from 2004 to 2018 from 42.7% to 26% (Roy and Mukhopadhyay 2019). [TR4] 

Table 3: Source: Annual Survey of Industries, Ministry of Statistics and Implementation, Government of India (various issues)

The increased vulnerability of an insecure job market, low labour force participation rate, and disparity between caste, gender, class, and ethnicity have also resulted in increased suicide rates by 3.6% in 2018 (NCRB 2018). Absorption of the labour force into the unorganised sector was fuelled by distress than by choice which hides huge underemployment. In a situation where even, the formal sector is being informalized by recruitment of contract labour on a high scale, where the working conditions range from insecure to precarious to near or total oppression. Even though the total employment in organised manufacturing shows an increase from 7.7 million in 2000-01 to 13.7 million in 2015-16, more than half of this increase was because of the increase by contractualization. Their share increased sharply from 20% in 2000-01 to 38% in 2015-16. In addition to that, the PLFS survey revealed 71% of workers don’t possess written job contracts that mean they cannot even claim their identity as a worker.

SDG 8.5: Key issues (Decent work and Equal Pay)

Further, the PLFS survey reveals another shocking figure that the piloting of ‘fixed-term employment’ have reduced worker wages by 18%, and working hours have been increased up to 12 hours. In the non-textile manufacturing sector, the working hours have increased between 12-18 hours. The average daily wage difference was observed to be Rs 150 between regular and contract workers in 2019 and it was highest in the public sector at Rs 256.62  (Table 4). Even in terms of social security, only 17% of females were able to continue contributing to any social security schemes (ESIC payroll data, 2018-19). Still, these numbers are not giving justification to the on-ground reality due to unavailability of quality data about informalisation of employment and unorganised sector. In reality, wage disparity is so rampant that women are paid half of the wages against men which does not meet the statutory minimum wage framework, which is equally amount to forced labour (Roy and Mukhopadhyay 2019, Rama 2015).

Table 4: Wage differential between regular and contract workers

The major issue is of gender wage disparity is a result of India’s unimaginable gender injustice deeply embedded in Indian society. According to the ‘Monster Salary Index’ (MSI) published in March 2019, women earn about 19% less than men. The survey revealed that the median gross hourly salary for men in 2018 was Rs 242.49, while Rs 196.3 for women, meaning men earned Rs 46.19 per hour more than women. This gap is more in the IT and manufacturing sectors, where men earn 26% and 24% more than women respectively.

Recently introduced ‘Fixed-term employment’, which is primarily introduced for textile sector, now been extended to all industrial sectors. This has created more problems than just wage disparities. For example, possibility to hire permanent worker for the regular nature of employment is almost over across industries. This will create unending process of conflict in the labour market. Further to this, the fixed-term employment relations will not provide any right to receive notice even before the termination of services. The workers employed on a fixed-term basis may be terminated on the completion of their contract even while, there is an actual need for their services. The workers employed on a fixed-term basis are not entitled to the payment of retrenchment compensation and shall stand deprived of their right to freedom of association and collective bargaining rights. Similarly, the definition of a strike has been broadened by including ‘the concerted casual leave on a given day by 50% or more workers employed in an industry’. This would lead to a greater restriction on the right to strike. The exclusions of conveyance allowance, house rent allowance and commission would have an impact on the quantum of compensation payable to a worker in the event of retrenchment or closure or lay off. The scariest part is, these anti-worker proviso, are part of permanent nature of policy, and the same will be likely to get legislative protection once the labour law reform process is completed.

SDG 8.7: Key issues (Forced labour and Child Labour)

In the year 1982, the supreme court of India gave a historical pronouncement that anybody who works below the minimum wages or no wages will be subject to forced labour or bonded labour. The apex court related the phenomenon of non-payment of minimum wages in the unorganised sector amounts to a violation of constitutional fundamental rights under Article 23 which prohibits ‘any form of forced labour and beggary’.  When one looks at India’s unorganised sector, it is found that there is no concept of living wages at all. Millions of people are migrating in distress conditions in search of employment, and are employed illegally in lieu of advance cash. Prof Jan Breman has coined a word for such phenomena in the labour market as ‘wage hunters and gatherers.’

Several studies by different CSO’s such as, ‘Anti-Slavery International’ have informed that a significant number of people go missing each year. Even though the reasons for going missing are many and varied including mental illness, miscommunication, domestic violence, or being a victim of crime but, as per the study of the UNODC Global report 2018 (pg. 67) on human trafficking indicates that the majority of the detected victims are for forced labour, child labour, domestic help, and sexual exploitation etc. The number of children trafficked is continuing to grow rapidly. 63,407 missing children were reported in 2016 but the number grew by almost 4000 in 2018 – reporting a total of 67,134 (NCRB report on missing women and children in India 2019). 35% of such victims are trafficked for forced labour are females and more than half of the victims were men. The killing of workers, sexual abuse of women, child labour, long working hours, and severe occupational hazards like silicosis are the basic characteristics of India’s unorganised sector. To name a few, agriculture, brick-kiln industry, stone quarries and carving industry, garment and textile industry, are few where bonded labour/modern day slavery are rampant.

Anti-Slavery International and Volunteers for Social Justice have illustrated the above-mentioned condition of workers in a brickkiln case study in Punjab (Anti-Slavery International 2017). Their main findings were as follows:

  • “100% of brick moulders were from a minority group; all were from traditionally marginalised/ excluded castes and classes.
  • Female workers do not receive wages as workers are hired as a family unit, and wages are exclusively paid to the male head of the household unit.
  • Interstate migrant workers (approx. 60%) are more vulnerable as they take a higher advance (loan), are hired through a labour contractor, and face challenges in accessing support.
  • Workers are paid per 1000 bricks made. This piece-rate system of payment consistently limits workers ability to attain statutory minimum wages and incentivises child labour and long working hours. (44rs hr to 34rs/hr).
  • 96% of adult males reported taking an advance (loan) before starting work in the kiln.”

Currently in India, 55.49% of the workers are vulnerable to this type of modern day slavery accounting for around 8 million (GSI 2018). The way the workers are recruited and paid is critical in understanding the system of power relations where feudalism and complex caste system plays a significant role. This is why workers remain poor and vulnerable, a large number of them are trapped into debt-bondage, mostly distressed migrants and children. It is important to note that workers are indebted to the employees/ contractors and wages are only settled at the end of the employment period. Therefore, workers lose control over their conditions of employment and movement. This allows the owner to control the workforce until workers have paid off their loan. It also allows the employer to reduce the agreed wage rate at the end of the season and pay below minimum wage with limited accountability. This new type of bondage is replacing the ‘traditional’ type of bondage, where workers were physically restricted from leaving worksites. This is just case study depicting the picture of a sector whereas the similar scenario can be found across unorganised sector. These characteristics are subject to violation of number of supreme court jurisprudence, fundamental rights of Indian constitution and conventions of the United Nations.

Another prevailing example of increasing bonded labour is among children – often related to child trafficking to financially support their family. Children from rural areas migrate or are trafficked for employment in industries, such as spinning mills, cottonseed production, manual work, domestic work at family enterprises, stone quarrying, brick kilns and tea gardens etc. They are forced to work in hazardous environments for little or no pay. Those forced into labour lose all freedom, being thrown into the workforce, essentially become slaves, and lose their childhood.

CSOs have demanded that the missing children should be accounted as part of organised crime and investigated as human trafficking cases. The Ministry of Home Affairs have formed task force in each state, made exclusive budgetary allocation to investigate such crime but the degree of such cases is increasing with unprecedented rate. It is worrisome that how state has miserably failed to protect potential future citizens of India. This can be also considered that how state has failed to perform their constitutional duties.

SDG 8.8: Key issues (Occupational Safety and Hazard, Migrant Workers)

Caste-based practices such as manual scavenging and untouchability are further dividing the society. The tenacious practice of manual scavenging was quantified through a national survey conducted in 18 states by the Ministry of Social Justice and Empowerment. A total of 48,345 manual scavengers were involved in cleaning sewers and septic tanks in unsafe and precarious conditions till January 2020. As per NCRB data, the number of people killed while cleaning septic tanks or sewers has increased by 61% in 2018 than the previous year. A total of 110 people was killed while working as a manual scavenger. Even after introducing mechanical systems for cleaning the sewers and septic tanks, manual scavenging persists due to the failure of government initiatives to absorb the workforce into decent work. As per the regulation of prohibition of manual scavengers in 2013, manual scavengers are provided with some government rehabilitation – one-time cash assistance of Rs. 40,000, loans up to Rs. 15 lakhs at concessional rate of interest, and scholarship schemes for their children. However, it fails to provide sustained alternative livelihood options or capacity building opportunities where they can get dignified jobs with decent work conditions and which can enable them to sustain in vulnerable conditions. The informalisation of labour has further affected the occupational safety and health of the workers/labourers through sheer negligence of related laws and regulation. The International Labour Organisation (ILO) in India, estimated nearly 48,000 people die every year due to work-related hazards and 38 fatalities per day were reported in the construction sector.

The codes dealing with occupational safety, health and working conditions are under process of consolidation and amendments in the form of ‘The Occupational Safety, Health and Working Conditions Code Bill 2019’ (OSHWC). But this code fails to include many branches of economic activities. In particular, the agriculture sector which employs more than 50% of the total working population of India. Further, the employees in other unorganized sectors such as small mines, hotels & eating places, machinery repairs, construction, brick kilns, power looms, fire-works, carpet manufacturing, and also those employed as informal workers in organized sectors, including new and emerging economic sectors such as IT and ITES, digital platforms, e-commerce, home-based work, are also not found coverage under the Code. In short, The OSHWC Code should have universal coverage of all economic activities and all types of workers including domestic workers, home-based workers, trainees, volunteers. The code has got away by fixing any responsibility on the employees in respect of safety and health. It does not specify even minimum standards on OSH, and working condition measures and everything is delegated to the Government. The requirement of compliance with OSH standard is covered, as general duties of employers. Thus, diluting the responsibility for basic and minimum standards of safety and health. The Code also does not regulate the daily and weekly working hours. The enforcement mechanism also has been removed by introducing “facilitator”, and the third-party certification like mechanism. The Code also does not contain any provisions for equal treatment for contract labour who perform the same or similar kind of work as that of permanent workers in the same establishment. When contract labour is engaged for doing the same or similar kind of work as that of permanent workers in the same establishment, they should be treated on par with the permanent workers in the matter of wages and other conditions of employment. With regards to, inter-state migrant workers, the contractor has been given the role of a principal employer, which means the principal employer won’t have any obligation to safeguard workers interest. Keeping in mind the nature and vulnerability of migrant workers, it will further push them in an unimaginable exploitative situation.

One can imagine how the labour law reform will not only undermine the protection achieved through legislative framework, but it will also ridicule the efforts put by working class from decades. Indeed, the government has failed to recognise that focusing on economic growth for its own sake leads to jobless growth and socially unaccountable prosperity. This leaves workers and communities poorer, uncertain, unstable, vulnerable, insecure and unprotected against business harms. It is clear that failing to address these issues threatens the peace and harmony of the society and undermines the nation’s capability to improve the living and work conditions for worker.

Chapter 2: Incoherence and gap analyses between GOI’s reporting frameworks for SDG 8

To strengthen the economy and tackle the issues of inequality, GOI has come up with different schemes and policies such as Mudra loan, Jan Dhan Yojana, Skill India, amendment of maternity bill or abolition of bonded labour and child labour by framing a comprehensive rehabilitation plan. But unclear and scanty information in the review reports and unavailability of quality data by the government have created restraints in analysing the impact and performance of such policies. One such example is of the data available with the Ministry of Labour and Employment on bonded labour. As of March 2019, out of around 8 million people in forced or bonded labour (GSI 2018), only 3,13,687 were identified and 2,93,725 were rehabilitated since the enactment of the Bonded Labour System (Abolition) Act in 1976 (Ministry of Labour and Employment, 2019). Out of this number, 19962 bonded labourers were not available for rehabilitation for unidentified reasons. Ironically this figure doesn’t provide any idea about what the efforts are made in last few years. Whether government has increased any efforts in identifying, releasing and rehabilitating workers? Keeping in mind the crisis in the informal economy, this data itself reflects how little efforts are being made to reduce the plight of the informal workforce in India. And most importantly how our efforts have been extended to labour market in recent years?

Nevertheless, individual reports and newspaper articles (Economic times or Business today) are the basis for analysing underperformance of the schemes or policies targeting SDG 8 indicators, especially prioritising 8.3, 8.5, 8.7 and 8.8. The comprehensive nature of SDG calls for impact-based reporting framework as a key step towards SDG engagement by the government. But the analysis of different schemes and policies have found a significant gap in terms of impact, consistency, monitoring and extent of SDG 8 and prioritization process.

Findings

First, our analysis uncovered a lack of consistency in objectives of the policies and reporting indicators to determine the impact of the schemes and flagship programmes. One of the indicators chosen for reporting SDG 8 talks about percentage of households with bank accounts. In line with same we have taken example of the MSME sector while looking at Udyog Adhaar’ registration process. This was introduced to increase financial flow in the MSME sector. Even though this scheme has ensured equal access to finance for all but as per the annual report 2018-19 of Ministry of Micro, Small and Medium Enterprises, only 15% MSME units were registered by the end of 2019. Amongst this, only 14% were women-led enterprises which also highlights inequalities in opportunities created for women in economic activities (Table 5).

Table 5: Gender data of registered MSMEs under Udyog Aadhar

Along with this, ‘Pradhan Mantri Mudra Yojana’ (PMMY) was launched in 2015 (MUDRA Loan) for inclusive financing and fuelling growth at the bottom of the pyramid. Amongst the 59.87 million registered loan accounts, 86% had got less than Rs 50,000 to start their business. Even if we consider the official definition of micro-enterprises, it requires minimum INR 10-15 lakh of the initial investment. This exemplifies inadequacy of such schemes which have resulted in Non-Performing Asset (NPA) crisis in the MSME sector with the share of 41% stressed loan accounts in public as well as private finance sector. Further, this does not reflect in the selected indicators by NITI Aayog for SDG 8 reporting framework (refer Annexures 2). This celebrated Mudra Loan scheme have been widely lauded, however when we went deeper, we found how flawed it is in achieving SDG 8. There is limited information about the rationale for cherry-picking certain indicators. This raises the question of how the government should report on their incorporation of SDG 8 in national policies and its implementation. What indicators will result the real outcome?

To align with the Sustainable Development Goals and the ‘Respect’ pillar of the United Nations Guiding Principles (UNGP, 2011), The Ministry of Corporate Affairs (MCA), Government of India released a set of guidelines called the ‘National Guidelines on Responsible Business Conduct’ (NGRBC) (MCA, 2015). The principles outlined for responsible business conduct are based on 3 main pillars, leadership commitment, employee and stakeholder engagement, and disclosure and reporting of the social and environmental impact. However, the selected indicators by NITI Aayog for reporting framework do not align with either the NGRBC principles or the UNGP indicators. The indicators selected for reporting framework discuss only the quantity and do not reflect the quality or consistency of the policies. Accordingly, these indicators put a question mark on the transparency and accountability of the government while assessing their performance for SDG 8.

While India is increasing the awareness and support for SDGs, evidence in our review shows huge gap about priorities, ambition and transparency. Instead of following the guidelines set by UNGP and NGRBC, the government policy framework seems to be attempting to reinterpret the SDGs by cherry-picking indicators. This creates significant non-alignment with the ambition to achieve the SDG Agenda 2030.  

Recommendations

The government has failed to recognise that focusing on economic growth for its own sake leads to jobless growth and socially unaccountable prosperity. This leaves workers and communities poorer, uncertain, unstable, vulnerable, insecure and unprotected against business harms. It is clear that failing to address these issues threatens the peace and harmony of the society and undermines the nation’s capability to improve the living and work conditions for worker.

We, therefore, propose the following recommendation to be adopted, to increase our efforts to achieve SDG Goal 8: 

  1. Creation of a diversity index based on an audit to be done by the companies’ basis which can be categorised as high diversity and low diversity. Gender, Caste, Disability can geography can be considered, as main indicators.
  2. Companies should create a ‘robust digital mechanism’ for an effective reporting of violations and regular social audit. Sexual violence and caste discrimination can be priority areas.
  3. Government being the biggest procurer, should issue a directive to all their inter-mediatrices to strictly follow the labour statutory provisions, particularly wages, social security and occupational safety, health and working condition.
  4. Govt must allocate a special package to build the infrastructure of ‘Small, Scale and Micro Industries’, as they are the biggest subsidiaries of multi-national corporations. In this regard, the industrial association in collaboration with the Trade Union must develop a demand charter to be submitted to Central Govt. It will enable them to increase the compliances on ‘Labour Laws’ and formalisation of establishment lead to Tax collection.
  5. The Central Govt has proposed ‘Self Certification’ for labour law compliances, instead of ‘Labour Inspection’. The companies must develop a comprehensive digital mechanism for the sake of transparency and solvency of reported cases. Creating an external social audit system will be a milestone towards achieving it.
  6. Sectoral Independent Human rights Ombudsman to be set up which is linked to the businesses to enable deeper percolation of labour laws and stronger auditing mechanisms
  7. The industrial association must create a digital portal where basic trade union demands can be recorded, such as registration of trade union, collective bargaining agreements etc. The industries should promote industrial relations in the spirit of employee-employer, as equal stakeholders. The aforesaid portal will set a precedent and lead to harmonize labour market, as never before.
  8. We celebrate Govt efforts to promote start-ups/enterprises, which are eventually creating immense employment, and emerging as inputs industries for big businesses too. Gig Economy, Future of Work, Industries 4.0 have become a familiar word for this emerging economical phenomenon. However, the level of precarity has been increased in such sectors. There is an urgent need for a policy, which can enforce ‘labour laws’, in these sectors. The industrial association should make sincere efforts along with Govt and Trade Union to formulate a policy which can regulate the ‘Gig Economy’. It will further allow the smooth transition of Industry 4.0 too.
  9. Forced Labour, Bonded Labour, Distress Migration, Human Trafficking have become new normal across the informal sector. There is an urgent need to bring in ‘Labour Law Enforcement’ together with the criminal justice system.
  10. Industry must push for portable identity card, perhaps they themselves must facilitate workers enrolment to concerned welfare board. This will help access particularly the migrant workers for social security benefits and other entitlements.
  11. Government of India must collaborate with concerned ministries such as labour and employment, home affairs, social justice, corporate affairs etc to develop a robust digital compliance mechanism where state in collaboration with business fraternity and workers representative to ensure entitlements are not denied for every worker. Women workers and childcare should be on priority list.

 

Annexure 1

MAPPING OF LAWS POLICIESColumn1Column2Column3
LawsPoliciesSchemesProgrammes
SECTION – I: Laws dealing with Social Security:   
1. Unorganised Workers’ Social Security Act, 2008NAUWINNA
2. The Mica Employees’ Compensation Act, 1923,   
3. The Employees’ State Insurance Act, 1948,   
4.The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952,   
5. The Maternity Benefit Act, 1961,   
6.The Payment of Gratuity Act, 1972,   
7. The Unorganised Mines Labour Welfare Fund Act, 1946,   
8. The Limestone and Dolomite Mines Labour Welfare Fund Act, 1972,   
9. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare (Cess) Act, 1976,   
10. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare Fund Act, 1976,   
11.The Beedi Workers Welfare Cess Act, 1976,   
12. The Beedi Workers Welfare Fund Act, 1976,   
13. The Cine Workers Welfare (Cess) Act, 1981   
14. The Cine Workers Welfare Fund Act, 1981,   
15. The Building and Other Construction Workers Cess Act, 1996   
    
State Laws who have made a significant contribution   
Maharashtra Mathadi, Hamal and Other Manual Workers (Regulation of Employment And Welfare) Act, 1969   
Tamil Nadu Manual Labour Act 1952   
    
    
Laws relating to Trade Unions, conditions of employment in industrial establishment or undertaking, investigation and settlement of industrial disputes   
1. The Trade Unions Act, 1926,   
2. The Industrial Employment (Standing Orders) Act, 1946,   
3. The Industrial Disputes Act, 1947   
    
Laws regulating occupational safety, health and working conditions   
1. Factories Act 1948,   
2. Mines Act 1952,   
3. The Dock workers act 1986   
4. The building and othes construction workers act 1996,   
5. The plantation labour act 1952,   
6. The contract labout act 1970,   
7. The inter state migrant workmen act 1979,   
8. The Working journalist and others news papers employees act 1955,   
9. The working journalist (fixation of rates of wages) Act 1958   
10. The Motor Transport Workers Act 1961   
11. Sales promotion employees act in 1976   
12. The beedi and cigar workers act 1966   
13. The cine workers and cinema theatre workers act 1981   
    
Law relating to wages and bonus   
Labour Code on Wages 2019 (Following laws recently repealed by enacting new wage act)   
1. The Minimum Wages Act, 1948,   
2. The Payment of Wages Act, 1936,   
3. The Payment of Bonus Act, 1965,   
4. The Equal Remuneration Act, 1976   
    
Laws related to protection from sexual harassment at workplace   
The Protection Of Women Against Sexual Harassment At Work Place Bill, 2010   
Criminal Procedure Code (CrPC)   
    
Laws related to MSMEs   
Micro, Small and Medium Enterprises Development Act, 2006   

 

Annexures 2

GOI FrameworkSelected National Indicators by NITI AyogThe annual growth rate of GDP per capita (at a constant price of 2011-12)Average unemployment rate per 1000 persons for males and femalesPercentage of households with a Bank accountNumber of ATMs per 1,00,000 population
NGRBC 
Principle 2Sustainable and safe goods and services 
1Providing adequate information about environmental and social issues and impacts across the product life cycle from design to disposal    
Principle 3Respect and promote the well-being of all employees, including those in their value chains 
1The business should comply with all regulatory requirements pertaining to its employees, and that there are systems and processes in place to enable this to be done by its value chain partners.    
2Equal opportunities at the time of recruitment, during the course of employment, and at the time of separation without any discrimination    
3Promote and respect the right to freedom of association, the participation of workers, and collective bargaining of all employees including contract and casual labour, and provide access to appropriate grievance redressal mechanisms.    
4No child labour, coercive or forced labour, or any form of involuntary labour, paid or unpaid.    
5Systems and processes to support the work-life balance of all its employees.    
6Fair, timely and transparent payment of statutory wages of all its employees, including contract and casual labour without discrimination    
7Pay fair living wages to meet basic needs and economic security of all employees, including casual and contract labour    
8Safe, hygienic, accessible to the differently-abled and which upholds the dignity of the employees. Engage and consult with their employees on this provision.    
9Continuous up-gradation of skill and competence of all employees by providing access to necessary learning opportunities, on an equal and non-discriminatory basis. They should promote career development through human resource interventions.    
10Ensure a humane workplace free from, violence and harassment (including sexual harassment); a safe and secure workplace with adequate provisions for grievance redressal.    
Principle 4Respect the interests of and be responsive to all its stakeholders 
1Develop systems, processes and mechanisms to identify its stakeholders, understand their expectations and concerns, define the purpose and scope of the engagement, consult with them in developing policies and processes that impact them, and commit to resolving any differences and redressing grievances in a just, fair and constructive manner.    
2Enable all stakeholders to benefit fairly from the value generated by the businesses, and any conflicts or differences arising from the impact of business operations or the sharing of the value generated by the businesses should be resolved in a just, fair and equitable manner.    
3Governance Structures should ensure that the business acknowledges, assumes responsibility, and is transparent about the impact of their policies, decisions, products and associated operations on all stakeholders, and the natural environment.    
Principle 5Respect and promote human rights 
1Make employees aware of the human rights content of the Constitution of India, relevant national laws and policies, and the International Bill of Human Rights and their application to businesses as outlined in the United Nations Guiding Principles for Business and Human Rights. It should further ensure that the responsibility for addressing such impacts is assigned to the appropriate level and function within the business.    
2The Governance Structure should ensure that the business undertakes to make its employees aware of the human rights content of the Constitution of India, relevant national laws and policies, and the International Bill of Human Rights and their application to businesses as outlined in the United Nations Guiding Principles for Business and Human Rights. It should further ensure that the responsibility for addressing such impacts is assigned to the appropriate level and function within the business.    
3The Governance Structure should ensure that their business, where it is causing, contributing or otherwise linked to adverse human rights impacts, takes corrective actions to address such impacts.    
4Businesses should promote the awareness and realization of human rights across its value chain.    
5Businesses should ensure that all individuals and groups whose human rights are impacted by them have access to effective grievance redressal mechanisms.    
Principle 8Promote inclusive growth and equitable development 
1The Governance Structure shall ensure that the business takes appropriate actions to minimize any adverse impacts that it has on social, cultural and economic aspects of society including arising from land acquisition and use, construction of facilities and operations.    
2Businesses should assess, measure and understand their impact on social, and economic development, and respond through appropriate action to minimize and mitigate its negative impacts on society.    
3Businesses should innovate and invest in products, technologies and processes that
promote the well-being of all segments of society, including vulnerable and marginalized groups.
    
4Businesses should respond to national and local development priorities and understand the needs and concerns of local communities, particularly vulnerable and marginalised groups and in regions that are underdeveloped while designing and implementing their CSR programmes.    
5Businesses should make efforts to minimize the negative impacts of displacement of people and disruption of livelihoods through their business operations and where displacement is unavoidable, this process must be undertaken in a humane, participative, informed and transparent manner, where just and fair compensation is paid to those impacted.    
6Businesses should respect all forms of intellectual property and traditional knowledge and make efforts to ensure that benefits derived from their knowledge are shared equitably.    

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[1] Uniform Labour law, Press Information Bureau, Government of India, Ministry of Labour & Employment, https://pib.gov.in/newsite/PrintRelease.aspx?relid=107950

[2] Centre, states need to pursue labour law reforms: SBI report
https://economictimes.indiatimes.com/news/economy/policy/centre-states-need-to-pursue-labour-law-reforms-sbi-report/articleshow/69876081.cms

[3] Rajasthan labour law reforms lost in political play, Economic Times
https://economictimes.indiatimes.com/news/economy/policy/rajasthan-labour-law-reforms-lost-in-political-play/articleshow/48151943.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

[4] The ITUC Global Rights Index depicts the world’s worst countries for workers by rating 139 countries on a scale from 1-5 based on the degree of respect for workers’ rights. Workers’ rights are absent in countries with the rating 5 and violations occur on an irregular basis in countries with the rating 1.

[5] Defining labour force participation rate (LFPR) as the total number of employed and unemployed persons in the country out of the total population above 15 years of age. Among persons of age 15 years and above, LFPR in usual status (ps+ss) was 49.8%; 50.7% in rural areas and 47.6% in urban areas.


  • 8.3 (formal/informal employment & MSMEs),
  • 8.5 (decent work & equal pay),
  • 8.7 (forced labour & child labour)
  • 8.8 (OSH, migrant workers).

 Labour force participation, which is part of SDG8.3, should be moved to Chapter1- key issues that need to be addressed under SDG8.3

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