Two of every five industrial employees now contract workers: ASI data

Every two in five workers employed in industrial establishments were contractual hires in 2021-22, showing an increasing trend of contractualisation of the labour force in the country. Also, the share of employer's contribution towards wages of the workers has seen a continuous decline, according to the latest Annual Survey of Industries (ASI) released by the Ministry of Statistics and Programme Implementation (MoSPI).
 

The ASI data shows that in FY22, a total of 13.6 million workers were employed by 249,987 factories across India. Of them, 5.4 million workers (or 40.2 per cent) were contract workers — the highest ever — compared to only 39.4 per cent in the preceding year. In the pre-Covid year of FY20, the share of contract workers stood at 38.4 per cent as only 5.02 million of the total 13.05 million workers were employed through contractors.

 

Contract workers are employed by an industrial establishment through contractual agreements for a specified period or task. These workers are distinct from regular employees who have permanent or long-term employment status with the establishment with social security benefits.

The data also showed that among the remaining directly employed workers in these factories, the share of women workers rose slightly to 18.42 per cent in FY22, compared to 18.1 per cent in the preceding year.  

Separately, the share of employer's contribution towards wages of workers has declined to 10.87 per cent in FY22, from 11.07 per cent in FY20. The total amount of wages and salaries paid to workers in FY22 stood at Rs 6.29 trillion, of which only Rs 0.68 trillion was paid by employers.

The data further shows that the share of contract workers among the total workers in FY22 exceeded the national average in 10 out of the 21 major states and Union Territories (UTs). States like Goa and the Northeastern states, except Assam, have not been taken into consideration.  

Prominently, the share of contract workers is highest in Bihar (68.6 per cent) and Telangana (64.9 per cent) followed by Odisha (58.4 per cent), Jharkhand (54.5 per cent) and Uttarakhand (54 per cent).

Kerala (21.4 per cent) has the lowest share of contract workers in the workforce, followed by Tamil Nadu (23.1 per cent), Punjab (30.5 per cent), Karnataka (31.8 per cent) and Andhra Pradesh (34.5 per cent). The share of contract workers in the UT of Delhi stands at 13.4 per cent.

The “total persons engaged” in an enterprise — defined as the sum of directly employed workers, contract workers, supervisory or managerial workers, and the unpaid family members who might be engaged in the enterprise — had risen by 7 per cent (Y-o-Y) to 17.21 million in FY22 from 16.08 million in FY21.

The ASI is the most important source of industrial statistics of the registered organised manufacturing sector of the economy. It covers all establishments under the Factories Act 1948 employing 20 or more workers with power and 40 or more workers without power.