Statistical half-truths

The relevance of labour statistics is seriously undermined by the dominant neoliberal ideology which seeks to cover up and even shut out any evidence questioning its legitimacy.

Workers at a Metro Rail station that is being built in Chennai. In the case of industrial disputes, the poor coverage of the services sector or the construction sector and the rich coverage of the plantations and manufacturing sectors could and do affect their dispute proneness.

IN 1992, INDIA ratified C160 of the Labour Statistics Convention, 1985, of the International Labour Organisation which requires member-countries to produce and update labour statistics covering several variables on a periodical basis and in such a way “as to be representative of the country as a whole, covering, where possible, all branches of economic activity”. In 1949, it had ratified the Labour Inspection Convention, 1947 (C81) of the ILO (excluding part II, which relates to services). As a ratifying country, India should have put in place a statistical system relating to labour inspection.

Labour statistics is primarily published by two government agencies, the Central Statistical Organisation (CSO) of the Ministry of Statistics and Programme Implementation and the Labour Bureau attached to the Ministry of Labour. In the case of labour statistics published by the Labour Bureau, the Central sphere comes under the Central labour administrative agencies and the State sphere under State labour departments. The statistics relating to factories, earnings, trade unions, industrial injuries and so on are collected statutorily and those on industrial disputes voluntarily. The statutory statistics are a part of labour administration and derive from the respective labour laws. The validity and the relevance of existing labour statistics need to be questioned as they have suffered severe blows in the post-reform period.

The labour statistical system was conceived during the command economy regime and in the contexts of the sectoral and the institutional composition of the Indian economy. Tremendous changes have taken place in both, but the conceptual and schematic structures of official labour statistics have remained virtually the same. For example, it is well known that the working class movement has undergone significant changes as new forms of trade unions and workers’ organisations such as the National Association of Street Vendors of India (NASVI) and non-affiliated trade unions (known as independent or enterprise trade unions) have emerged as significant players. The trade unions’ statistics published by the Labour Bureau is hardly helpful in understanding these changes. The basic utility of this statistics is another matter altogether. As the statistical system largely derives from the legal framework and this applies mostly to the formal sector, there is obviously little or no information on the world of work in the informal sector.

The data variables framed by the Labour Bureau do not cover many interesting aspects of industrial relations. State intervention mechanisms such as state conciliation and compulsory adjudication and even primary institutions of resolution of industrial disputes and work stoppages are important. There are hardly any data on the machinery of conciliation and adjudication, that is, the number of industrial and labour courts, the strength of the conciliation machinery, the number of disputes raised and settled, cases reported as failures and cases referred for compulsory adjudication by States and spheres; and some more disaggregate classification (for example, by industries, issues involved, results, where appropriate, and so on) is desirable.

The ILO has issued a benchmark ratio for enforcement officials: it is 1:10,000 for industrial market economies, 1:20,000 for economies in transition and 1:40,000 for the less developed countries. We do not have “national” data on inspection machinery to find out the gaps in the functioning of the machinery; it is another matter to speak of qualitative aspects such as the facilities and incentives provided to labour inspectors. At the same time, the “inspector raj” is vilified purely on the basis of “employers’ perceptions”.

Ignored sectors It is questionable whether the official agencies cover adequately the sectors they should, or even propose, to cover. In the case of industrial injuries, the official statistics cover the manufacturing sector, the railways, mines and ports. There is no initiative on the part of the government to cover the vast agricultural sector, the urban informal sector and, more importantly, the services sector. The concept of industrial injuries needs to be revised to include these sectors. In the case of industrial disputes, the poor coverage of the services sector or the construction sector and the rich coverage of the plantations and manufacturing sectors could and do affect their dispute proneness. In the case of any variable, the coverage of the rural areas is questionable thanks to poor official presence in them.

In view of the lack of coverage of emerging sectors such as information technology (IT), the statistics produced by non-governmental agencies such as the National Association of Software and Services Companies (NASSCOM) is accepted by all, ignoring the fact that its statistics could be influenced by its characteristic as a pressure group. Alternative bodies such as the Centre for Monitoring Indian Economy (CMIE) provide limited and costly access to data. It is doubtful whether the statistics of an NGO or a trade union enjoys as much legitimacy as non-government business agencies such as NASSCOM.

Thanks to the thresholds-based labour laws in India, the coverage is not complete. For example, contractors bypass the statutorily mandated registration by undercounting their workers. This could be true of all kinds of employers. This has become more significant thanks to the sly reforms strategy adopted by the state and the employers. It is well known that the official contract labour employment data—35 per cent for 2011-12, based on the Annual Survey of Industries (CSO)—are an underestimate.

Anecdotal evidence clearly shows that the contract labour employment could be anywhere between 50 per cent and 65 per cent on an average in the medium and large establishments; there is no concept of regular employment in small establishments. In other words, the statistical system as it exists today does not adequately capture the share of vulnerable and non-standard employment. The employment composition in any data set, including the date of the National Sample Survey Office (NSSO), does not adequately capture the extent of labour flexibility in India either temporarily or spatially. We do not have data on temporary and casual labour, which hurts the understanding of the labour market dynamics.

Annual returns More seriously, employers and trade unions do not increasingly submit their annual returns under the respective labour laws. As a result, statistical agencies “estimate” the numbers pertaining to the non-reporting units by several methods, including “repeat” of the previous years’ numbers. Trade union membership in India, unlike many other countries, has shown tremendous increase thanks to the growing unionisation of workers in the vast informal sector and the organisation of informal workers in the so-called formal sector. However, thanks to a combination of factors, the official data do not capture the true picture of unionisation of the workforce in India.

More seriously, State labour departments fail to send State-level returns to the Labour Bureau. In furnishing major labour statistical variables such as factories, minimum wages, and industrial injuries, around 10 States, including big States such as Tamil Nadu, Maharashtra and Karnataka, would be defaulters in the last decade or so. Of the 28 States and seven Union Territories, only 17 or 18 submitted returns to the Labour Bureau on factory inspections for 2006-2007 (Indian Labour Year Book 2009-10).

False sense of peace

While it is true that the incidence of work stoppages has declined, the decline represented by official statistics at the national level is unbelievable, thanks to the failure of social actors and State labour departments. For example, the Labour Bureau counted one work stoppage involving 771 workers and causing 771 workdays lost for 2007 while the State Labour Department of Maharashtra counted 22 work stoppages involving 6,100 workers and causing 9,55,300 workdays lost (from the Economic Survey of Maharashtra). This must be true of other States as well. While disparities between the State and the federal data sources are understandable, the extent of disparities is discomforting. Further, the official data on industrial conflicts do not count various forms of protests such as go-slow, marches, morcha s, conventions, national-level strikes and strikes by the unorganised sector workers thanks to its archaic concept of industrial conflict. Fourteen national-level work stoppages and protests have occurred in the post-reform period and the official data on workdays lost do not capture them. In other words, the diversification of industrial conflict in the post-reform period is not captured at all by official data, which explains the official picture of industrial quietude.

These two features—poor union membership data and inadequate industrial conflict data at the national level—together provide a conducive picture of weak unionisation and industrial quiescence to potential investors. Investors abroad would go by the statistics presented by the Economic Survey of the Ministry of Finance and the Labour Bureau and may not bother to scout data at the regional level. Even State governments undercount the number of industrial disputes. The Central government and State governments pat their backs regularly for creating a conducive industrial relations environment—notwithstanding the occurrence of some bloody conflicts and hundreds of ordinary conflicts—and downplay the incidence of industrial conflicts. There is no national data on the industrial disputes that do not necessarily result in work stoppages—data that would be more pertinent for an assessment of the industrial relations picture in a region or in the country. Put simply, industrial harmony in India is questionable and a statistical fiction!

For the Minimum Wages Act, 1948, in the case of six big States for which data for 2012 are available, only 2.59 per cent of the establishments covered had submitted returns. In the case of West Bengal, Bihar, Jharkhand and Maharashtra, a “nil” report was presented (http://labourbureau.nic.in/MW_Report_2012.pdf). Just a quarter of the registered factories submitted returns under the Factories Act for 2010 (http://labourbureau.nic.in/REP_FACT_2010.pdf). The submission rate under the Trade Unions Act by trade unions is less than 10 per cent. It is interesting that the trade unions that protest the reform processes are as guilty of non-compliance as their rivals are.

High person-power deficits, poor infrastructure, multiple tasks and high workload misallocate human resources in the government sector, and labour statistics becomes the casualty. Transition from the command economy, where labour statistics played an important role, to the market economy has surely undermined the importance of labour statistics.

The tremendous relaxations in labour inspections and procedural reforms such as self-certification also adversely impact labour statistics. In a sense, high non-compliance by social actors reflects their disdain for labour bureaucracy (returns, data, and so on) and discontent over the inspector raj regime. In another sense, this reflects the labour flexibility strategies adopted by firms, which mainly involve bypassing and even violating labour laws, in the absence of labour law reforms.

Under-reporting of industrial conflicts and accidents could in fact project an image of India as a “liberal labour market” to external investors. The poor validity and quality of labour statistics could at worst reflect weakening of labour and marginalisation of the Labour Ministry in a globalised economic environment.

The curious aspect of the poor show is the high non-compliance by trade unions, which perhaps reveals their frustration over the enforcement regime and anger over the denial of the fundamental right to register their trade unions.

At any rate, India, having ratified the labour statistics and labour inspections conventions of the ILO, does not produce valid “national” statistics. As a result, labour policymaking, if it happens, will be seriously hampered. The relevance of labour statistics is seriously undermined by the dominant neoliberal ideology which seeks to cover up and even shut out any evidence questioning the legitimacy and even the relevance of it. The most fundamental labour reform that the country needs is the reform of labour statistics.

K.R. Shyam Sundar is Professor, Human Resource Management, XLRI, Jamshedpur.