Model Answer
0 min readIntroduction
India’s economic growth story over the past few decades has been accompanied by a significant shift in the nature of employment, characterized by a growing casualisation of the workforce. Casual employment, defined as work lacking job security, benefits, and social protection, has become increasingly prevalent. This trend is particularly concerning given India’s persistent poverty levels, with the latest Multidimensional Poverty Index (MPI) report (2023) indicating that 11.28% of the population is still multi-dimensionally poor. This answer will examine the complex relationship between the casualisation of employment and poverty in India, exploring the drivers, consequences, and potential solutions.
Understanding Casualisation of Employment
Casualisation refers to the increasing proportion of workers engaged in temporary, part-time, or contract-based employment, lacking the benefits associated with formal employment such as job security, provident fund, health insurance, and paid leave. This trend is driven by several factors:
- Economic Liberalisation & Reforms (1991 onwards): Increased emphasis on market flexibility and cost reduction led to firms preferring flexible labor arrangements.
- Technological Advancements: Automation and the gig economy have created demand for short-term, task-based work.
- Informal Sector Dominance: A large proportion of the Indian economy remains informal, where casual employment is the norm.
- Lack of Skill Development: A skills gap makes workers less competitive for formal sector jobs, pushing them towards casual work.
- Agricultural Distress: Declining agricultural productivity and rural distress force many to seek casual employment in urban areas.
The Link Between Casualisation and Poverty
The relationship between casualisation and poverty is multi-faceted and operates through several channels:
1. Income Poverty
Casual workers typically earn lower wages compared to their formal sector counterparts. The Periodic Labour Force Survey (PLFS) 2022-23 reveals that the average daily wage for casual labourers was significantly lower than that of regular wage employees. This lower income directly contributes to income poverty, making it difficult for households to meet basic needs.
2. Vulnerability to Economic Shocks
Casual workers are more vulnerable to economic shocks, such as recessions, natural disasters, or pandemics (like COVID-19). The lockdown during COVID-19 disproportionately affected casual workers, leading to widespread job losses and increased poverty. They lack the safety net of unemployment benefits or job security.
3. Health and Nutrition
Lack of access to health insurance and social security benefits leaves casual workers vulnerable to health shocks, which can lead to catastrophic health expenditures and further impoverishment. Poor working conditions and exposure to occupational hazards also contribute to health problems. Malnutrition, particularly among children, is also more prevalent in households dependent on casual labour.
4. Education and Human Capital Development
Children from families dependent on casual labour are more likely to drop out of school to contribute to household income. This perpetuates a cycle of poverty by limiting their future earning potential. Limited access to quality education and skill development opportunities further restricts their ability to move into better-paying jobs.
5. Social Exclusion and Inequality
Casual workers often face social stigma and discrimination, limiting their access to opportunities and reinforcing social inequalities. They are often excluded from formal social networks and lack the power to advocate for their rights.
Illustrative Data & Trends
| Indicator | 2011-12 (NSSO) | 2018-19 (PLFS) | 2022-23 (PLFS) |
|---|---|---|---|
| % of Workforce in Casual Employment | 52.2% | 54.3% | 57.5% |
| Average Daily Wage (Casual Labour) | ₹264 | ₹317 | ₹375 |
| Average Daily Wage (Regular Wage/Salary) | ₹487 | ₹624 | ₹789 |
Source: National Sample Survey Office (NSSO), Periodic Labour Force Survey (PLFS)
Policy Implications and Potential Solutions
Addressing the link between casualisation and poverty requires a multi-pronged approach:
- Promoting Formalisation of the Economy: Simplifying labor laws, reducing compliance costs, and incentivizing firms to formalize employment.
- Investing in Skill Development: Providing vocational training and skill development programs tailored to the needs of the labor market. The Pradhan Mantri Kaushal Vikas Yojana (PMKVY) is a step in this direction.
- Strengthening Social Protection: Expanding social security coverage to include casual workers, providing unemployment benefits, and ensuring access to affordable healthcare.
- Promoting Rural Employment: Investing in rural infrastructure and agricultural development to create more employment opportunities in rural areas. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) provides a crucial safety net.
- Enhancing Labor Rights: Strengthening labor laws to protect the rights of casual workers, ensuring fair wages, and providing access to grievance redressal mechanisms.
Conclusion
The casualisation of employment in India is inextricably linked to poverty, creating a vicious cycle of vulnerability and exclusion. While economic growth is essential, it must be inclusive and generate decent work opportunities. A concerted effort to formalize the economy, invest in skill development, strengthen social protection, and enhance labor rights is crucial to break this cycle and ensure that the benefits of growth reach all segments of the population. Addressing this challenge is not only an economic imperative but also a moral one, essential for building a just and equitable society.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.