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Recent labour protests and unrest in Manesar, Noida, Faridabad, Panipat and other places clearly manifest the precarity of the Indian labour market and the helplessness of the labour administration. The kind of demands raised and grievances expressed by the protesters are very basic and fundamental. Revision of minimum wages, eight-hour working days, overtime pay, provision of drinking water, toilet facilities, safety provisions at work, etc. constituted the major rallying points of the protesting workers.

In almost all cases, the employers involved are all big, formal sector enterprises. In the case of Panipat, Indian Oil is a profit-making Navaratna public sector undertaking. However, the majority of workers in these organisations are contract and casual workers, implying a growing informalisation of labour in India’s organised sectors, both public and private.

From the late 1980s and particularly after 1991, the Indian labour force witnessed unprecedented informalisation through the ever-increasing use of contract and casual workers. Contractualisation is the increasing reliance on temporary, third-party or project-based contracts rather than hiring permanent employees. This practice aims to enhance operational flexibility and reduce labour costs, but often leads to job insecurity, wage disparities and a lack of benefits like social security. It is widely considered a form of worker exploitation that limits labour rights.

Illustration: Pariplab Chakraborty.

Employment in organised enterprises has grown over time from 10.9% in 1999-2000 to 17.1% in 2023-24. But within the larger organised sector, formal jobs form only a small share. Many firms rely on temporary, outsourced or contract workers. The literature calls this “embedded informality”, where even registered and modern enterprises continue to depend on insecure labour arrangements. The share of contract workers in organised manufacturing surged from 12% in 1990-91 to 33.6% in 2013-14, while their wage share rose from 58.7% in 1999-2000 to 81.5% in 2013-14. Informal sector workers now constitute over 90% of the total workforce.

The question that can be asked here is: why this increase in contract/casual workers instead of regular workers? The basic answer is the pursuit of........

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