July 17, 2022

Field Survey in Manufacturing Hubs Reveals Startling Precariousness of Employment

Sudip Dutta

A WIDE-RANGING field study was conducted by the CITU Centre covering manufacturing hubs in Karnataka and Tamil Nadu in collaboration with the CITU state committees. The survey team covered around five manufacturing industrial clusters of Bengaluru and Chennai and had interactive sessions with many groups of workers covering 23 manufacturing industries to capture a deeper understanding of the dynamics of rapidly changing employment relations as well as to mark the composition of workers recruited under different nomenclatures and categories in the same shop floor. Startling features have come out revealing the most aggressive practice in the era of the crisis-stricken capitalist production system striving for a greater rate of profit.


Ill-intentioned casualisation and contractualisation of workforces under the neo-liberal regime were being incessantly pursued in the manufacturing industry in India for long. With the advent of automation and modernisation of technologies, the destitution of permanent workers in manufacturing sector had only increased, while the contract workers had been pushed towards the level of pauperisation burdened with an unimaginable physical and mental distress. 

In addition to that, a newer and evidently the most fragile labour force is emerging in the form of apprentices/trainees and a more exploiting employment relation is taking birth in the laboratories of modern manufacturing industries in India. The study reveals a glimpse of the heinous nexus between the moves of the ruling class and the policies of the government.     

It has exposed a deep-rooted onslaught by capitalist class to eliminate the age-old time-tested concept of “regular/permanent workers” and engaging contract/variety of temporary workers in huge numbers along with recruitment of different categories of workforces like ‘On Job Trainees (OJTs)’, ‘Long Term Trainee Employees (LTTEs)’, ‘Learn while you Earn’, ‘Junior Executives’, ‘Fixed Term Employees (FTEs)’ or ‘NEEM’, ‘NETAP’ and ‘SITA’ scheme trainees, etc.

Permanent workers are conspicuously reduced to insignificant presence, even below 10 per cent of the total workforce in some industries. In some factories, shockingly thousands of trainees have been deployed in the entire production process. In some cases, trainees are getting more remuneration than the contract workers, indicating the management’s malicious intention to promote and attract work-force in trainee post instead of recruiting them at least into contractual category. 

Though the entire workforce, despite different nomenclatures viz., permanent, contract, casual and trainees/apprentices, are doing almost the same work, i.e., the core operational jobs of value addition on the same shop-floors, there exists differences in their remunerations, working conditions and right to association.   

The study further noticed that while the number of workmen is continuously being reduced, aggressive modernisation of technologies with automation, robotisation and introduction of AI are continuously enhancing the productivity of every unit of labour engaged and hence the intensity of work. Some of the companies, in the process of introducing automation and robotics in a more aggressive manner, have already started experimentation and eventually 60-80 per cent of currently employed work-force will become redundant soon, ultimately to inflate the ranks of reserved army of unemployed.

Different management techniques like Frequent Time and Motion (FTM) Studies, E-Management, Self-Management Teams (SMTs) have been introduced to enhance the rate of surplus-production and hence profit to an increasing degree.  Methods like ‘All Time Management System (ATMS)’, ‘Total Production Management (TPM)’ are especially adopted by MNCs to maximise the extraction of labour and to bring down the cost of production. 

The report concludes that the ever-evolving modern capitalist production processes demand more and more breathless attention of a worker and it is continuously re-shaping itself to ensure the surplus-extraction in precision to a fraction of second’s labour-time, thereby intensifying extraction of surplus value per unit of labour. Competitive and differential upgradation of technology reduces the necessary labour-time for that particular output, hence enabling the extraction of higher rate of surplus. Modernisation of instruments of production with the growing precariousisation of labour power is the dichotomy and the obvious course of capital in the manufacturing sector in India.


An ILO study in 2017 has revealed that the share of wages in Gross Value Added (GVA) in the Indian manufacturing sector declined from 28.5 per cent in 1980–81 to 11 per cent in 2012–13. The share of all emoluments other than wages also declined from 15.5 per cent to 12.6 per cent during the same period. While the share of profit increased from 15.7 per cent to 44.1 per cent touching its peak at 53.8 per cent in 2007-08. The largest decline, steeply from 51.5 per cent to a mere 14.8 per cent, was recorded in firms with more than 5,000 employees – a result of blatant contractualisation in large capital-intensive manufacturing industries. 

On the other hand, during the observed period, the rate of growth of labour productivity was 6.1 per cent but annual earnings per employee (2004-05 base year) grew only at a rate of 2.3 per cent (labour productivity is measured as the ratio of real GVA at nominal prices to total number of workers employed). This divergence in the two indicators implies that while the employee contribution to GVA was growing substantially, the returns for the employees did not keep pace. 

The Indian Council for Research on International Economic Relations (ICRIER) published that the share of contract workers in the organised manufacturing sector increased from 15.5 per cent to 27.9 per cent in 15 years up to 2015-16. According to the Centre for Sustainable Employment at the Azim Premji University, though the share of contract work and other precarious forms of labour has grown since the early 2000s, contract, trainee, and apprentice workers perform the work of permanent workers at a minor fraction of their wages (of permanent workers). 

In the midst of this rampant precarious contractualisation, a new clandestine ploy is coming-up. The draft concept note on Amendment in Apprentices Act, 1961 issued by the ministry of skill development and entrepreneurship (MSDE) on April 6, 2021 has proposed to make apprenticeship compulsory in higher education and to legitimise stipend-less apprenticeship for promoting ease of doing business. Strikingly, in the year-end meeting of 2021, the department of higher education initiatives under National Education Policy (NEP-2020) has reported the initiatives taken for integration of vocational education and apprenticeship/internship into the higher education system compulsorily. 

Earlier in that year, while presenting the 2021-22 budget, finance minister Nirmala Sitharaman proposed the allotment of Rs 3,000 crore for the National Apprenticeship Promotion Scheme (NAPS-2016). NAPS was launched to incentivise the employers with 25 per cent of the prescribed stipend subject to a maximum of Rs 1500 per month per apprentice and to reimburse Rs 7500 for each basic training from the government exchequer to promote engagement of apprentices. Also the employers registered under the Apprentices Act, 1961 are exempted towards contribution of EPF and ESI for apprentices and can utilise their CSR funds for providing stipend. 

In fact just after coming into power, Modi government initiated amending the Apprentices Act, 1961 in the year 2014 and 2015 and subsequently the Apprenticeship Rules, 1992 on September 25, 2019 to enhance the capacity to intake apprentices in an establishment from the band of 2.5-10 per cent to 2.5-15 per cent of the total work-force including the contractual strength. Additionally, 5 per cent became reserved for fresher apprentices. The scope, duration and eligibility of appointing apprentices were enhanced further. The National Employability through Apprenticeship Program (NETAP) was set up in 2014 by MSDE in accordance with the National Employability Enhancement Mission (NEEM) of AICTE.

While subsidising, rather directly financing the employers from public exchequer for recruiting apprentices, the government passed the Industrial Relation Code, 2020 in an authoritarian process bulldozing the existing Industrial Dispute Act, 1947 and deceitfully excluded the apprentices from the definition of workman and hence from all the rights under labour-codes.   

So, despite the huge spike in profitability, the employers of Indian manufacturing sector have been deliberately lowering the wage-share by informalising-contractualising the labour-forces in last three decades. The advancement of technology had multiplied the attentive intensity and productivity per-unit labour-time and the multidimensional appropriation as well as expropriation of labour had already led to de-humanisation of labour-forces beyond the claim-to-be civilised level. 

The newest plot of ruling-class is to further lower the labour-cost by recruiting more and more apprentices in core production processes with practically no-wages while making their existence completely vulnerable by amending the labour laws ripping out their designation as workman. 

Automation-Driven De-skilling

It can be observed that a paradigm shift in the nature and essence of commodities is emerging in the neo-liberal stage as now the constantly updated and diversified features of products have occupied the centre of attraction instead of the durability of the product. The emergence of an aggressively voracious consuming class has supplemented the demand group of these ever-evolving innovative products. 

On the other hand, the automation and resultant obvious de-skilling are continuously outmoding the necessity of dedicated-task specific experienced labour-power. The mode of production is moving towards a direction where the fresh trainee-batches, with the most state-of-the-art knowledge of automation and technology and skill to learn fast are going to be burdened with the whole core responsibility of the production process. The huge reserve army of unemployed, vocationally educated youth with the up-to-date knowledge about the most modern technology is going to reproduce thousands of new batches of trainees/ apprentices every year waiting at the factory gates to replace the old batches from the process of production. 

These apprentices/ trainees, working for a very meagre amount, having no labour-right and allowed to work for only a stipulated period, will be thrown into the completely uncertain market of unemployment just after completion of their tenure. 

This work-force is armed with the knowledge and skill of operating most modern technologies and machines and is emerging as the most vulnerable exploited link in future production relations and hence will rise as the most desperately promising force to strike back.   

 The struggle against recruitment of contract workers in permanent-perennial forms of jobs, the struggle for the equal wages for equal work as well as all other statutory benefits for all casual-contract workers must include the struggle for recognition of the apprentices/ trainees as workers who are recruited under different names and schemes but performing the core production activities in all respects. These contract-trainee workforce constitute the most advanced and potential proletariat class of modern India empowered with the capacity and spirit to lead the struggle for social transition.  

  • Roll-back Codification of Labour-Laws
  • Halt contractualisation-apprenticisation in perennial core production
  • Ensure Right to Equal Wages and Benefits with Right to Association for Contract-Trainee Workforce