-- S Kumaraswamy
THE Unorganized Sector Workers Bill, 2003 is the reaction of the Indian ruling classes, to the present crisis. The bill is the logical outcome of the Second National Labor Commission’s (SNLC’s) recommendations. For any serious assessment of the bill, the SNLC’s recommendations should also be taken in to account.
In para 7.396 the report states "…new and separate umbrella legislation is imperative to protect the workers in the unorganized sector. Labor laws do not offer protection and welfare to workers in the unorganized sector. Whatever exists is inadequate. Our Constitution and the international agreements we have entered into give us the mandate to secure their protection. The Unorganized Sector including the agricultural sector account for more than 92% of the total workforce, i.e., around one-third of India’s population. In absolute terms, this sector contributes more to the economy and employment in India. National Accounts Statistics Report of 1995 confirms that nearly 65% of the national income is contributed by the Unorganized Sector. These workers, particularly women, have not been able to organize themselves and are further discriminated against. The existing labour laws do not define most of them as workers because a principal employer is not easy to identify in these kinds of work. If properly conceived and effectively implemented, a law for unorganized sector workers will make a definite contribution to the eradication of poverty. The unorganized sector cannot be wished away. The national ‘divide’ between the Organized Sector (Formal) and the Unorganized Sector (Informal) of the country’s economy, and the workers/labor engaged in them, is unreal because these sectors are interdependent. Legislation cannot be effective unless it integrates their needs for protection and welfare with those of the rest of our society and economy".
"7. 472 It is clear to us that crucial guarantees of justice lie in minimum wages, job security, safety and social security."
According to SNLC, a comprehensive umbrella legislation for unorganized sector workers is necessary in India for eradication of poverty. None can quarrel with this proposition. After making this pious declaration about eradication of poverty the SNLC is back to "ifs and buts" in a down to earth manner. Recommendation in Para 7.404 reads "As structural adjustment proceeds, the entitlements of the organized sector are getting eroded, and the need for social security systems is becoming more urgent and central to the success of structural adjustment programs. The concept of social safety nets may not be feasible in the economic situation that prevails in India. Difficulties may deepen with the increasing marginalization of labor. Social safety nets would be viable if the number of people who ‘fall’ into them constitutes a small percentage of the workforce".
There cannot be a large safety net. It will have to be small. Should one infer from this that only a token safety net is affordable and possible?
The actual recommendations and the wherewithal for implementing them are suggested in the following paras.
Para 8.32 – "We recommend a system in which the State bears the responsibility for providing and ensuring an elementary or basic level of security, and leaves room for partly or wholly contributory schemes. This will mean that the responsibility to provide a floor will be primarily that of the State, and it will be left to individual citizens to acquire higher levels of security through assumption of responsibility and contributory participation. Such a system will temper and minimize the responsibility of the State, and maximize the role and share of individual and group responsibility."
The burden is shifted on the individual workers. "The more you contribute the better will be your benefits". The emphasis is not on the role of the state or industry or employer to provide social security, but on the individual unorganized worker to fend for himself.
It is true that the SNLC talks about a social security fund to be created by the Union Government and the state Governments. But none can miss the caution that there can never be a larger social security net.
Chapter IV deals with this topic, mentioning basic rights like the 8-hour working day, minimum wages, equal wages for women and so on. The bill 2003 does nothing more than extending the existing laws which have never been implemented in real life till now.
What does it offer by way of social security schemes? Who will pay for it? How will they be run?
The bill 2003 provides for the creation of a Central and State level Unorganized Workers Welfare Boards to be run on government loans and grants as well as contributions. The Central and State Governments have got the powers to give instructions to the boards to carry out the provisions of the act.
There are only provisions and promises for social security. But nothing concrete is spelt out. What does our experience on construction labor show? Though the central legislation on construction labor was passed in the year 1996, even up to 2003 the majority of Indian States do not have any Welfare schemes under that act. Even in States like Tamil Nadu, where such a scheme is in existence from 1994, out of 4.5 lakh registered workers only some 16,000 have been able to avail the benefits. Out of the Rs.57 crores accumulated in the fund only Rs.6 crores were given to the workers up to 31-03-2003. Even out of this Rs.6 crores, Rs.5 crores were paid only on their death. No pension is given. A proposal from the board to increase the percentage of cess from 0.3% to 0.5% is not accepted by the State Government, even when the Central Act prescribes a minimum of 1% and a maximum of 2%. When this is the reality, where is the question of the governments directing the boards to comply with the provisions of the Act?
The welfare measures in the bill will remain illusory if they are not matched concurrently in the schemes backed up by funds from the Central and State governments. Well, the SNLC has recommended the creation of Central and State level funds for the Welfare of the unorganized workers. The SNLC has bemoaned the fact that in India the funds for social welfare are meagre at 1.8% of the value of GDP, where as it is 4.7% in Sri Lanka and 3.6% in China. Let the Central Government set up a welfare board for unorganized labor with 3% of the value of GDP immediately and let the State governments follow suit. Let them announce the various welfare schemes along with the bill. Otherwise, all these so-called welfare measures in the bill will only remain mirages.
In this bill 2003, there is an interesting element of workers’ facilitation centers, which shall grant a social security number and issue identity card to the unorganized sector worker. These facilitation centers are to mobilize members for the funds, assist the workers in the promotion of self-help groups, cooperatives etc. Whether the unorganized worker gets a multi-purpose identity card or not, there will be a multi-purpose facilitation center which will mobilize the workers and mobilize funds from the workers.
Bill 2003 does not deal with the regulation of employment of unorganized workers. There is no provision whatsoever for protection of jobs or for employment guarantee. Not only that. It does not say anything about any uniform national floor-level minimum wages. It does not go a single step beyond the existing mechanism of the minimum wages act. The ground for this could be found in the SNLC’s recommendations. Its para 6.112 states. "However, before fixing the minimum wage the appropriate Government should keep in mind the capacity of the industry to pay as well as the basic needs of the workers". In simple language this means minimum wages should be linked with the capacity of the industry to pay. This is nothing but making a mockery of the Supreme Court’s judgments and the constitutional provisions. This is what the Supreme Court says: "Broadly speaking, the first principle is that there is a minimum wage which, in any event, must be paid, irrespective of the extent of profits, the financial condition of the establishments or the availability of workers on lower wages. This minimum wage is independent of the kind of industry, and applies to all alike, big or small. It sets the lowest limit below which wages cannot be allowed to sink in all humanity... A "Socialist" framework to enable the working people a decent standard of life, has further been promised by the 42nd Amendment. The workers are hopefully looking forward to achieve the said ideal. The promises are piling up, but the day of fulfillment is nowhere in sight. Industrial wage – seen as a whole -- has not yet risen higher than the level of minimum wages".
The SNLC gives a go by to the Supreme Courts guidelines and its own study group’s recommendations for Rs.4,500/- as minimum wages and once again puts in command, ‘the capacity of the industry to pay’. That is why the bill 2003 does not even attempt anything different on minimum wages.
Let us see the ultimate quotation on wages from the Communist Manifesto: "Hence the cost of production of a workman is restricted, almost entirely to the means of subsistence that he requires for his maintenance and for the propagation of his race. But the prize of a commodity and therefore also of labor power is equal to its cost of production". Nothing more need be said. And there ends the matter. That is why nothing could be done beyond loud-mouthed promises and pious platitudes on minimum wages.
Bill 2003 has done something more dangerous. It brings within its purview the agricultural laborers. The agrarian laborers are becoming a dynamic assertive and independent class of rural India and they are the motive force of revolutionary democracy. They are the living links of rural India. As an independent class, they have been demanding comprehensive welfare legislation. A bill for agrarian labor has been kept in cold storage for long. And now they are being dragged into this lame-duck legislation.
It will be a long fight to secure the rights and protect the interests of the
unorganized workers and agricultural laborer. Bill 2003 opens up a lot of possibilities
for advancing the cause of the downtrodden. It makes it possible for nationwide
concerted struggles covering all sections of the working masses because of its
various provisions and promises.