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According to the World Bank, India’s GDP is projected to grow at 7.3% in 2018-19. This forecast would help India regain its position as the world’s fastest-growing major economy. It is a well-acknowledged fact that one of the driving forces behind India’s growth is its labour force. However, with the casual workforce in India, an increase in GDP is accompanied by a fall in job security. This article explores the state of casual labour in India and its role in our economy.

Casual labour is said to be the employment of an irregular kind that is usually on the hourly or daily basis. Such workers could be engaged in farm or non-farm enterprises such as construction, community services, and agriculture. They tend to earn only through daily wages and thus, thrive in the informal sector. According to the Fifth Annual Employment & Unemployment Report (2015-16), casual labourers represent one-third (33%) of those employed in India. It is the most prevalent form of employment, second only to self-employment. Are casual workers considered ‘employees’ of a company under the law?

In India, daily-wage earners are not given the same benefits or status as a tenured employee. This not only makes casual labour an unattractive option of employment but also endangers the progress of the population that engages in such work. However, casual labourers do come under the purview of the Employees’ State Insurance (ESI) Act. A closer look at the casual workforce in India prompts us to ask if this critical section of the population is provided with the rights and security needed to maintain a decent standard of living. Unfortunately, this question has not been addressed adequately by labour reforms and has disadvantaged the casual workforce.

One of these disadvantages being the absence of job security which adversely affects their standard of living. Employers can easily exploit casual workers in the lack of minimum wage policy. A government survey has shown that majority of casual workers (59.3 %) earn only up to Rs. 5,000 per month. This study also points to the link between growing casual labour and poor wages & salaries. Casual workers do not get employment benefits such as maternity leave, sick leave, health benefits or right to form unions. Job contracts with legal responsibilities and ramifications are also rare, thus allowing casual workers to be retrenched without providing them any prior notice Casual labour’s ties with caste and gender in the Indian context have also been noted. For example, there was a rise in the percentage of SCs and STs engaged in casual employment between 2004-05 and 2011-12. Data also shows that female casual workers earn only 60% of what their male counterparts earn.

A concern in the labour market is that of workforce casualization. This refers to the increase in a number of workers employed on a casual basis. In the past decade, India has seen an increase in the number of contracts and casual labourers. An NSSO report in 2011 stated that in the period between 1999-2010 the share of contract & casual workers in organized employment rose from 10.5% to 25.6% and the percentage of regular employees workers fell from 68.3% to 52.4% in the same period.

Many factors are at play when discussing the casualization of the workforce in India. The Indian economy has not succeeded in generating enough employment to meet the needs of its population. Due to reduced rates of job generation, workers look for employment opportunities in the unorganized sector. Such ‘labour migrants’ often resort to casual labour. Labour laws have also been criticized for being too rigid, thus, not encouraging companies to employ regular workers. Neither do they offer labour rights to casual employees. Informalisation of the economy has also been closely linked with casualization of labour. As economies become more developed, it is expected that formal enterprises will grow to displace informal ones. But in India’s case, 81 percent of the population is employed in the informal sector. Since the majority of the jobs created by the informal sector are casual, the growth of the informal economy (informalisation) would also lead to an increase in the number of casual workers, unless policy intervenes.

Some attempts have been made to regularize casual labour in the country. For example, in 2017, former Chief Minister of Jammu & Kashmir, Mehbooba Mufti, announced that the government would regularize the services of 60,000 daily wagers and casual labourers working in various departments. The move was a step towards providing sustainable livelihoods to citizens and came as a relief to thousands of casual labourers.

As the challenges faced by the casual workforce are multi-faceted, they merit an equally comprehensive solution. This could involve improving the quality of employment opportunities, providing suitable working conditions with minimum wages and implementing the right labour laws. India is slated to have the most significant labour force in the world by 2027, but our labour markets are vulnerable to some extraneous factors. Most developed countries have succeeded at maintaining a low percentage of casual workers in their workforce and labour reforms in India would benefit from doing the same. If the country wishes to succeed as a sustainable economy, it would have to replace a flawed growth ideology with inclusive development for all. Therefore, it would help to understand the needs of our workforce to harness its potential in the near future.


Pais, J. (2002). Casualisation of Urban Labor Force. Economic & Political Weekly37(7). Retrieved from https://www.epw.in/journal/2002/07/special-articles/casualisation-urban-labour-force.html

Mishra,V., & Bhattacharya, A. (2017). Job Security in India Falls Even as GDP Continues to Rise. Retrieved from https://thewire.in/labour/job-security-falls-gdp-rises

Employment and Unemployment Survey: NSS 43rd Round : July 1987 - June 1988. Retrieved from https://data.gov.in/resources/employment-and-unemployment-survey-nss-43rd-round-july-1987-june-1988

Nearly 81% of the Employed in India Are in the Informal Sector: ILO. (2018). Retrieved from https://thewire.in/labour/nearly-81-of-the-employed-in-india-are-in-the-informal-sector-ilo

Padmanabhan, A. (2011). India's workforce goes casual - Livemint. Retrieved from https://www.livemint.com/Home-Page/pDWd443DYw3BYcmbEvdqNM/India8217s-workforce-goes-casual.html

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Written By Smriti Natarajan

Undergraduate student at St. Xavier's College, Mumbai

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