India has promised for many decades to get rid of poverty. It has consistently failed to deliver

In the long transition to a monetised and more diversified economy managed along capitalist lines of production, a small contingent of the workforce found access to the slowly emerging formal sector of employment which qualified for provisions meant to improve the plight of the working class. Mahatma Gandhi, as the founding father of the Textile Labour Association in Ahmedabad, insisted that the worker’s pay be enough to meet the basic needs of his household. Gandhi’s demand for a fair wage included social care benefits such as pension and health insurance, as well as a dearness allowance to compensate for the rising cost of living.

The labour rights introduced in the first decade after Independence were meant to strengthen the bargaining power of the small segment of labour which had managed to get organised in trade unions. The industrial legislation introduced remained restricted to a vanguard of the non-agrarian workforce which benefited from the statist objective to calibrate the interests of labour and capital. The National Planning Committee set up in 1938 and chaired by Jawaharlal Nehru wrote the draft for the transition to an industrial-urban society, heralded as the ultimate trajectory for the multitude of land-poor and landless peasants made redundant in the rural economy.

The regulations the state planners proposed were modelled on those practised in the developed world and included a variety of social security benefits. The progress promised did not filter through to the huge workforce outside the public sector and the mills.

In Gujarat, the committee charged in 1966 with the fixation of a minimum wage rate for agricultural work turned down the suggestion that the cash needed to meet the daily cost of living should be the yardstick. The panel argued that the recommended pay scale should not negatively affect agricultural productivity and profitability. But the statutory wage finally enacted in 1972 and periodically revised since has consistently remained below the level required for bare livelihood.

Farmers bluntly refused to pay even that minimum rate. Increasing clashes between the main landowners and the landless proletariat forced the Gujarat government to introduce various social insurance and welfare schemes aimed at reducing the threat to survival of the landless class. These schemes were announced as a first step towards a more comprehensive system of social protection.

The need was obvious. The National Commission on Rural Labour, 1991 reported that a mere 2.5 per cent of India’s GDP was set aside for social security. This budget was nearly exclusively spent on organized labour in the formal and largely urban economy. There has been no change for the better in the subsequent decades. The approach taken was not meant to address the problem but to provide immediate electoral gain with minimal pressure on the budget of the Congress government. The strategy of informalisation which followed in the late 20th century – although in Gujarat it was already practised much earlier on – paved the way for the regime of neoliberalism. It meant that capital was set free from the onus to ensure the welfare of labour.

The closure through the 1990s of about 50 textile mills in Ahmedabad, once called the Manchester of India, led me to investigate the impact of the turnaround in the city’s economy on the dismissed workforce of at least 1,20,000 mill hands. A deep fall in income, erratic but long hours of work in casual engagement or self-employment, deskilling, the end of collective action and lack of representation together with loss of social welfare benefits were major features of their forced exit from formal employment.

My next round of fieldwork concentrated on these issues. Its main focus was to find out how the fall from the formal to the informal economy had affected the proletarian consciousness of the dismissed workforce. Sliding down from what was stymied as unduly tenured and protected terms of service in the doctrine of the free market, these victims had come to share the plight of labouring masses which had never enjoyed job security, income security or social security. This huge workforce had consistently been exempted from the body of labour legislation which, under pressure of trade unionism, together with a broad range of civil associations canvassing for social reform, had been promulgated for the well-being of labour in the formal sector of the economy.

However, in the previous decades labour relations in the informal sector had not been totally left to the discretion of the employers. This attempt at regulation led to a number of labour laws which targeted employment practices considered unfair or abusive in official eyes, and became enacted from a social justice perspective. The most important of these were the Minimum Wage Act, 1948, the Contract Labour (Regulation and Abolition) Act, 1972, the Bonded Labour System (Abolition) Act, 1976, the Equal Remuneration Act, 1976, the Inter-State Migrant Workers (Regulation of Employment and Condition of Service) Act, 1979 and the Child Labour (Prohibition and Regulation) Act 1986. A Rural Labour Inspectorate was set up in 1981 to check on the employment conditions of both agrarian and non-agrarian workers. Government labour officers were appointed at the district and sub-district levels to monitor the implementation of the legislation. But these officials used their mandate of inspection to line their own pockets instead of exposing and prosecuting employers for non-payment of minimum wages).

Under pressure also from the World Bank and the International Monetary Fund (IMF) – operating as the high command of globalised capitalism – the state has stepped back from guaranteeing minimal protection and security to the labouring poor.

In order to avoid inspection raj, which is supposed to have led to “unnecessary” litigation, and to promote amiable collaboration between the government’s labour department and private business, a policy of self-certification allows employers to just declare that they abide with the labour laws applicable to their enterprise. Inspection of worksites has reduced to a trickle compared to what it used to be – much to the chagrin of officials who received hefty bribes for not prosecuting the large majority of employers unwilling to comply with the rules and regulations.

The agency charged with checking on the terms and conditions of labour has become moribund and might as well be shut down. The widespread practice of informalisation is aimed at weakening and cheapening labour for the greater benefit of capital. In the changed scenario, social welfare for the worker remained a far-fetched illusion.

Pushing through the politics and policies of neoliberalism in the 1980s as a win-win strategy for all stakeholders, the Congress government astutely abandoned the role it had claimed from the very beginning as a protector-cum-provider of the common good. Under the Hindutva regime, this retrogression was confirmed and further promulgated in the form of four labour codes which boil down to withdrawal of the body of labour legislation that had earlier been fought for.

The new legislation is part of a strategy of reducing labour costs, aimed to depress both wages and social benefits, and driven through with despotic labour control mechanisms to pre-empt trade unionism. The insistent and prolonged denial of the social question in postcolonial India would seem to be impossible to square with the reported trend of poverty alleviation. Of course, not for politicians and policymakers who changed track and became ardent proponents of the shift from a formal to an informal economy.

This turnaround gained momentum in the 1970s and was postulated by the advocating lobby as a win-win strategy for both capital and labour. At the beginning of this section, I have already referred to the sobering words of an essay authored by Deaton and Kozel, which signalled that India’s poverty guesstimates were politically tailored and that the rapid decline of deprivation was less than officially reported. The Bharatiya Janata Party (BJP) government, since 2011-2012, has obfuscated the measurement of poverty.

The National Sample Survey Organisation (NSSO), which was the main statistical agency, is no longer a semi-public body. It was incorporated within the Ministry of Statistics and Programme Implementation and in that repositioning, lost its reputation of professional competence and rectitude. There is solid evidence to conclude that major segments of society hovering around the poverty line – mostly those of OBC (Other Backward Classes) denomination, equipped with skills and owning some means of production – were able to work their way out of hardship.

On the downside, however, many of the unskilled and dispossessed households have further slid down in their deficient way of life to destitution. The controversy that remained a raging one, on how to figure out the changed magnitude and composition of indigence, induced in-house consultants of the World Bank to keep the gospel of neoliberal bliss alive. Persevering in the charade of a progressive decline of indigence, their statistical analysis shows a steady shrinking of poverty between 2011 and 2019 among roughly 10 per cent of the population – but, as they are belatedly forced to concede, “not as much as previously thought”.

Without this cautionary afterthought, an IMF working paper wants us to believe that by 2019, India had succeeded in almost eradicating extreme poverty, a feat that is reported to have remained unspoilt even by the explosive impact of the pandemic. These are brazen claims in the light of the multiple livelihood disasters that befell the labouring poor in these years more than any other social class.

Excerpted with permission from Fighting Free to Become Unfree Again: The Social History of Bondage and Neo-Bondage of Labour in India, Jan Breman, Tulika Books.