Bridging the Gap

Commerce Minister Kamal Nath has taken umbrage at US clothing retailer Gap deciding to return clothing from India on the grounds that the exporter who had sent the consignment had used child labour to produce the clothes. Mr Nath has been quoted as saying this was just another form of non-tariff barriers (NTBs), of the kind the west has been increasingly known to use (of course, India also uses some NTBs of its own as US wheat exporters will testify to)! The problem with Mr Nath's position, however, is that he just needs to look at the government's own data, or the spate of pictures in local newspapers after the Gap story hit the front pages, to know it is untenable.

Data from the latest round of the National Sample Survey indicate that around 2.6 per cent of children between the age of 5 and 14 years are in the country's labour force. In terms of numbers, given there are around 230 million children in this age group, that means around 6 million children are in the country's 440-million strong work force. That's a large enough number to ensure that several other Gaps can, with some degree of legitimacy, claim that their imports are made using child labour. The NSS, of course, provides no indication of just where these children are employed, as domestic help or factory employees and, in the case of the latter, in factories churning out export produce. Indeed, since Indian law also prohibits employing child labour, Gap has probably done the right thing even by Indian law!

But since these children, with some exceptions, are probably working of their own accord to make both ends meet, what can the government do? One way out, of course, is to ensure that all states make education compulsory till a certain age, and increase the funds available for schemes like the mid-day meal which, in the past, has been responsible for a quantum jump in the proportion of those enrolled in schools. More than enrolment, however, the real test lies in ensuring these children remain in school. And that requires better teaching standards, which brings into play a larger question about how government-schools are to be run. The other thing to do, of course, is to ensure there are enough jobs for the educated "" once parents realise there are higher-paying jobs available for those with a certain number of years of education, chances are parents will keep their children in school. NSS data show wage rates for those with a minimum number of years of schooling are much higher than those for the illiterate.

But what's also clear, as the OECD Economic Survey of India shows, is that the returns on the same level of schooling (in terms of wage levels) are very different depending upon whether the jobs got are in the formal or the informal sector "" indeed, the returns on education are so low in the informal sector that it is probably rational for parents to pull out their children from school and put them in the labour force. Ensuring enough formal sector jobs, of course, requires a complete overhaul of the existing labour laws that discriminate against formal employment. In other words, if the government is keen to put an end to children working, piecemeal solutions are not going to work.