41% workers on contract in formal manufacturing sector in FY23: ASI data

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Every two in five workers employed in the formal manufacturing sector were on contract in FY23, thus showing an increasing trend of contractualisation in the country’s labour force, according to the additional Annual Survey of Industries (ASI) data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Wednesday.

 

According to the data, in FY23, a total of 14.61 million workers were employed by 253,000 factories across India. Of them, 5.95 million workers (40.7 per cent) were on contract — the highest ever — as compared to only 40.2 per cent in the preceding financial year. 

 

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 social security benefits.

 

Meanwhile, in the pre-Covid year of FY20, the share of contract workers stood at 38.4 per cent — only 5.02 million of the total 13.05 million workers were employed through contractors. 

 

Besides, data also showed that among the remaining directly employed workers in these factories, the share of women stagnated at 18.42 per cent in FY23. This is the same as the preceding financial year.   

 

A state-wise analysis of the data shows that the share of contract workers among total workers in FY23 exceeds the national average in 10 out of 21 major states and union territories (UTs).

 

States like Goa and the Northeastern region, except Assam, have not been taken into consideration.   

 

The share of contract workers is highest in Bihar (68.6 per cent) and Telangana (64.5 per cent) followed by Uttarakhand (57.7 per cent), Odisha (57.3 per cent) and Maharashtra (53.04 per cent).

 

On the other hand, Kerala (23.8 per cent) has the lowest share of contract workers in the workforce, followed by Tamil Nadu (24.5 per cent), Punjab (29.8 per cent), Himachal Pradesh (32.5 per cent) and Karnataka (33.9 per cent). The share of contract workers in Delhi stands at 12.2 per cent. 

 

The “total persons engaged” in an enterprise, which is defined as the sum of directly employed workers, contract workers, supervisory or managerial workers, and the unpaid family members, had risen by 7.4 per cent to 18.5 million in FY23 from 17.21 million in FY22. It typically represents the overall employment generated by the formal manufacturing sector in the economy. 

 

The ASI survey by MoSPI provides crucial insights into the changing dynamics of India’s formal manufacturing sector in terms of output, employment, and capital formation. It primarily covers factories registered under the Factories Act, 1948, as well as beedi and cigar manufacturing establishments and electricity undertakings not registered with the Central Electricity Authority.

 

It also covers establishments with over 100 employees registered in the Business Register of Establishments (BRE), prepared and maintained by state governments.