Logo


Inside labour hubs in India's capital: Fewer jobs, more unemployed workers

Demonetisation, GST, sealing and anti-pollution measures worsened the prospects of getting a job, but experts said such opportunities were already scarce for those without a proper education

workers
Representative Image

As the midday May sun blazed overhead, and the temperature rose to 42 degree Celsius, several construction workers stood or sat on the pavement where they gathered every day, waiting to be picked up for odd jobs by prospective employers. The last batch of workers had been picked up two-and-a-half hours ago, at 10 am, and no more employers came along.

Yet, they waited, nearly six hours after getting to Harola in eastern Delhi. The lucky ones got picked by 7 am, others later. The unlucky ones hung on, until hope ran out and they headed home.

“It’s a daily routine here,” said 32-year-old Ram Kripal, a daily wage labourer left behind at Harola. The numbers of those left behind began to rise after demonetisation--the withdrawal of 86 per cent, by value, of India’s currency--in November 2016, said Javed Ibrahim. From 2,000 to 3,000 daily wage workers who found employment here every day that year, fewer than 1,000 find work today, he said.

The Harola labour hub in Sector 5, Noida, is one of the major gathering points for those who seek daily wage work in Delhi’s informal economy. It is also an embodiment of India’s dichotomies.

The hundreds who gathered here daily to beg for a day’s work amidst dust, smoke and smog, did so on a street surrounded by high-rise, chrome-and-glass buildings and towers. As the men and women in torn, stained clothes and sweat-drenched bodies waited, others drove by in the latest cars, in matching suits, shiny shoes and briefcases.

At Harola and other labour hubs in the national capital region (NCR) of Delhi--India’s largest urban agglomeration with 46 million people--they take whatever work is offered: at brick kilns, as rag pickers, at construction sites, in homes, lifting and moving goods. Those jobs are diminishing, as we report, as the number of workers at labour hubs swell.

Demonetisation came to India’s capital and its informal economy at a time when businesses were being shut across Delhi for working in residential areas without licences and in industrial east Delhi for polluting the air of what is one of the world’s most-polluted cities. These triple blows were made worse by the July 2017 implementation of the goods and services tax (GST), widely criticised for its hasty, often chaotic implementation.

This is the last of an 11-part series (you can read the first part here, second here, third here, fourth here, fifth here, sixth here, seventh here, eighth here, ninth here and tenth here), reported from nationwide labour hubs--places where unskilled and semi-skilled workers gather to seek daily-wage or contract jobs--to track employment in India’s informal sector. This sector, which absorbs the country’s mass of illiterate, semi-educated and qualified-but-jobless people, employs 92 per cent of India’s workforce, according to a 2016 International Labour Organization study that used government data.

By delving into the lives and hopes of informal workers, this series provides a reported perspective to ongoing national controversies over job losses. The number of jobs declined by a third over four years to 2018, according to a survey by the All India Manufacturers’ Organisation, which polled 34,700 of its 300,000 member-units.

In 2018 alone, 11 million jobs were lost, mostly in the unorganised rural sector, according to data from the Centre for Monitoring Indian Economy (CMIE), a consultancy. The unemployment rate in 2017-18 was 6.1 per cent, a 45-year high, according to the Periodic Labour Force Survey, released by the National Sample Survey Office (NSSO) in May 2019. The same report said 71.1 per cent of salaried workers in the unorganised sector--excluding the agricultural sector--had no job contract.

The end of “happy days”

Raju Prajapati, 39, was wearing an unbuttoned half-sleeved shirt and clumsily folded pants, as he reminisced his “happy” days, living with his father, mother and wife in Gokalpuri, northeast Delhi.

Disinterested in education, Raju dropped out after class 9 and dabbled in odd jobs till, in 2008, he started frequenting the labour hubs of Harola and Burari--about 28 km to the north--to find daily construction work. He found almost 25 days of work a month, earned around Rs 12,000 every month, enough to afford food and shelter.

On November 8, 2016, when Prime Minister Narendra Modi decided to cancel the validity of Rs 500 and Rs 1,000 notes, everything changed for the Prajapatis.

Raju said he found work at a construction site only seven months after demonetisation.

“Demonetisation was a black day for us,” said Ganesh Prajapati, 67, a construction worker like his son Raju. “Only we (the family) know the struggle we faced to survive those days.”

Ganesh’s income has dropped from Rs 12,000-Rs 15,000 to around Rs 8,000. Raju said he struggled to earn Rs 6,000-Rs 7,000 per month and work for about 16 days a month.

As the job crisis worsened, Raju left his family home in Gokalpuri in July 2017 and moved to the interiors of Harola village, so he could be close to the labour hub.

He lives in a smelly, shared room with a fellow worker and must travel 1.5 km to get drinking water every day. They struggle to pay the monthly rent of Rs 1,100 on time, like other tenants, so the landlord dismisses all complaints about ramshackle living conditions.

Raju’s wife has moved back to her parents’ house within the NCR and he now visits her only once a month.

Before demonetisation, Raju could save up to Rs 3,000 a month. Now, he saves nothing.

We found different versions of the Prajapatis’ story repeated at other labour hubs in the NCR.

Different labour hubs, same woes

Delhi’s 17th-century Chandni Chowk is one of the city’s busiest markets, its teeming streets visited by half a million people every day and its narrow lanes packed with small-scale industrial units and wholesale markets.

After demonetisation, Chandni Chowk businesses lost about 70 per cent of their turnover, the Business Standard reported in May 2019.

Most of these small-scale industries and markets employed workers on informal contracts, and when the economy declined, these workers joined those on the streets at labour hubs, swelling the already large numbers there.

“There is a sense of insecurity and concern among labourers,” said Zakir Malik, 29, a daily wage labourer at Chawri Bazar, one of Delhi’s largest labour hubs and part of the Chandni Chowk area. “Daily wage work is reducing day-by-day here and across other labour hubs like Burari and Mahipalpur.”

The Mahipalpur labour hub in south Delhi--one of the city’s most prosperous areas--is marked by narrow roads, chaotic traffic, broken footpaths and dejected workers.

After demonetisation, the crowds thinned at the Mahipalpur labour hub, as workers either moved back to their native regions or migrated to areas like Noida.

The Mahipalpur labour hub is now primarily a parking area for rickshaw pullers. “There were three major labour hubs in Delhi: Mahipalpur, Chawri Bazaar and Burari,” said Subhash Chand Mishra, 46, a former labour contractor. “Currently, all of these serve as rickshaw pullers’ stands.”

The downturn has affected not just labourers but contractors. “Frankly, a labour-contracting job was really fine in Delhi-NCR,” said Mishra, “But since demonetisation, labourers and labour contractors, both have been ruined.”

Today, at the Mahipalpur labour hub, it is rare to find labourers between 7 a.m. and 10 a.m., Mishra said. “Now, everyone looks towards Noida.” Although there is work to be found at residential- and office-tower construction sites, there are, as we said earlier, not enough jobs.

Mishra’s story reveals how even relative prosperity diminished after demonetisation and did not return.

After getting a bachelor-of-arts degree in his home town of Lucknow in Uttar Pradesh, Mishra started a grocery shop but closed it later, hoping for better prospects, which he found in Delhi in 2007 as a labour contractor.

Mishra hired large groups of daily wage workers from labour hubs and shipped them to jobs at south Delhi’s Okhla industrial area. Before demonetisation, Mishra earned between Rs 30,000-Rs 40,000 every month and saved enough to rent a flat in north Delhi’s Adarsh Nagar, where he lived with his wife and two children.

Now, Mishra lives in a single room near Sangam Vihar in south Delhi, moving out of his flat after he could not find enough work for the workers he once gathered. He is now an Uber driver, earning about the same amount, about Rs 40,000 a month. But expenses grew, and Mishra’s family moved back to Lucknow to save money.

Like Mishra, others down the chain have tried to move on, such as Sonu Kumar, 30, a migrant from Bihar who found pulling a rickshaw a better, more “independent” job than waiting at a labour hub every day and living under a contractor’s thumb.

Mishra and Kumar’s diminished job prospects are a reflection of the difficulties that Delhi’s industrial areas faced after not just demonetisation but GST and court orders shutting down businesses in residential areas and those that caused pollution.

GST, sealing, pollution

Mayapuri phase-II in West Delhi is one of India’s largest iron-trading hubs for small traders, micro and small enterprises, from scrap dealers to vehicle workshops, where unskilled and skilled workers come to find work.

While demonetisation led to the closure of several small-scale industries and left informal sector workers unemployed, GST played a significant role in adding to the financial stress.

“The filing system of GST is very complicated, it has functionalities such as drop-down menus, invoice upload, upload of purchase and many more,” said Jatin Sharma, 52, an iron trader. “All these activities kill time and money of small traders. We can not afford professionals to look after all these things.”

Dinesh Makol, 46, executive committee member of the Mayapuri Industrial Welfare Association, explained that several small-scale industry owners in New Delhi had invested personal savings to run their businesses. Demonetisation and GST stopped iron distribution, “wrecked” the lives of owners and hundreds of jobs were lost, said Makol, who runs a cast-iron manufacturing unit.

The end of cash transactions killed business and taxes under GST rose from 2 per cent to 18 per cent.

“A big scarcity of iron was created in Mayapuri for months and all units had stopped working for a while,” said Ganesh Tanwar, 29, a Mayapuri vendor. Many shut permanently, said Makol.

Rishabh Shah, 37, said the market was closed for almost three months and labourers moved back to their native places.

The situation was made worse by the Delhi government’s drive to shut down unauthorised businesses in residential areas, driven by a Supreme Court monitoring committee. By January 31, 2017, at least 10,533 commercial units, including shops, restaurants, bars and bakeries were shuttered.

In 2016, before demonetisation, the National Green Tribunal (NGT) ordered the shutdown of unauthorised industrial units in east Delhi to curb pollution. Based on this, the Delhi State Industrial and Infrastructure Development Corporation identified 51,837 units that needed to be relocated or closed. Hardest hit were informal-sector workers. While working at these industrial units put them at risk of exposure to toxic air pollutants, they had stable monthly incomes.

Mayapuri was one of the most affected by the sealing drive and several times over 2018, traders have taken to the streets in protest. At a press conference in April 2019, Brijesh Goyal, head of Aam Aadmi Party’s (AAP) trade wing, assured traders that chief minister Arvind Kejriwal planned to move the Supreme Court against their sealing order.

Meanwhile, on the streets of Mayapuri, workers spend their days playing cards, waiting for factory owners to hire them.

Dark days before demonetisation

Few labourers we spoke to expected the government to provide jobs, but they did express a desire for waiting sheds, drinking water facilities and a labour union that could fight for Delhi’s minimum wage: Rs 399 for unskilled labour and Rs 485 for skilled labour.

With almost 1.3 million unemployed people in 2016, Delhi’s jobless rate surged 6 per cent over the year from 2015, according to the Economic Survey of Delhi 2017-18, the latest available local data.

Demonetisation, GST, sealing and anti-pollution measures worsened the prospects of getting a job, but experts said such opportunities were already scarce for those without a proper education.

“There is an impression within people that Delhi has several opportunities for labourers,” said J John of the Centre for Education and Communication, an advocacy. “However, that’s not the actual scenario. Before demonetisation, it was average and post demonetisation it has become worse.”

Brick-kiln worker and migrant from Bihar, Parvati Kumari, 29, said “nothing has changed” for labourers in the NCR over the last five years. A class-10 dropout, she lives with her husband, a cab driver, and is never certain of finding work for the day. Since demonetisation, her income has dropped from Rs 8,000 to Rs 7,000.

“We struggled to get one proper meal a day and we are still struggling,” she said.

Tracking unemployment, however, is difficult in India’s capital because the data appear to be unreliable.

Delhi’s dodgy data

From the situation at Delhi’s labour hubs and industrial areas, it is apparent that unemployment among daily wage workers is widespread.

For instance, after demonetisation, hundreds lost jobs and businesses were shut in Sangam Vihar’s garment factories, considered to be one of Asia’s largest unauthorised neighbourhoods, said John. Home to more than 1 million, Sangam Vihar’s people are mostly poor migrants.

But as in the rest of Delhi, tracking jobs lost and gained is difficult because there are no clear data, he said.

In 2016, Delhi had an average unemployment rate of 10.31 per cent, going up to 17.3 per cent in May 2016--before demonetisation, according to CMIE’s unemployment data.

Unemployment was at its lowest between June 2017 and April 2018, at an average of 3.6 per cent, falling to 1.6 per cent in February 2018. In May 2018, the unemployment rate rose to 8.8 per cent and has increased since. In the first four months of 2019, the unemployment rate has averaged 11.32 per cent.

These spikes are hard to analyse because employment rises and falls gradually, said experts.

“While the unemployment data itself is of concern and requires further analysis, it is important to highlight that there is a need for an independent and globally aligned system for capturing real-time unemployment data,” said Utkarsha Bhardwaj, a Delhi-based social-impact consultant.

Without reliable data and a strategy, government social-welfare programmes for the jobless and unemployment programmes appear to be shots in the dark.

“While the skills mission launched by the Delhi state government and PMKVY (Pradhan Mantri Kaushal Vikas Yojana) launched by the Union government are notable attempts to address some of the prevalent issues, they need to focus on the existing employment exchanges and develop them as a one-stop platform for not just gathering and maintaining real-time data on skills, employment, and available opportunities in the market, but also collaborate with academia and industries to present viable job options for those seeking employment,” said Bhardwaj.

Employment opportunities can improve only if it is easy to run a business, which it currently does not appear to be in Delhi.

Making business difficult

In March 2019, the Reserve Bank of India (RBI) released data on the ease of doing business in Indian states. Based on the rankings over the last three years, Delhi slipped the most, falling from the 15th spot in 2015 to 23rd in 2017 (Andhra Pradesh tops the ranks, Telangana is second and Delhi’s neighbour, Haryana, is third).

“Very high cost of industrial land makes it impossible for aspiring young entrepreneurs to make the initial investment and stay viable in Delhi-NCR’s MSME (micro, medium and small enterprises) market,” said Suman Chawla, proprietor of a leather-goods manufacturing company called V&M Exports.

Land is likely to get costlier by 15-20 per cent, a real-estate developers’ association predicts, but even if it does not, the shortage of skilled workers is a problem that continues amidst visible unemployment and numerous government programmes.

For instance, the National Skill Development Mission was launched in July 2015 to coordinate the efforts of the National Skill Development Agency, the National Skill Development Corporation and the Directorate General of Training, but at the labour hubs, workers told us they were unaware of job-training programmes and had never registered for any.

The Pradhan Mantri Kaushal Vikas Yojana, launched in 2016--a programme under the National Skill Development Mission--promised free training in soft skills, entrepreneurship and financial and digital literacy to those who are school/college dropouts or unemployed, roughly about 10 million Indians by 2020, with a budget of Rs 12,000 crore. However, no more than a third of that target was achieved by January 2019, Al Jazeera reported in May 2019.

What welfare schemes?

During the February 2019 interim budget, Modi’s government introduced a pension programme for unorganised-sector workers called the Pradhan Mantri Shram Yogi Maandhan (Prime Minister’s Labour Honorarium), which allowed those workers who earned less than Rs 15,000 a month a Rs-3,000 monthly pension after turning 60.

Among those eligible to register are street vendors, loaders, brick-kiln workers, landless labourers and domestic workers aged 18 to 40 years. Since the launch of the scheme, 5,966 workers registered in Delhi, as on May 26, 2019, according to the programme website.

The 2017-18 NSSO survey said that among regular-wage workers in the unorganised sector--excluding the agricultural sector--54.2 per cent were not eligible for paid leave, while 49.6 per cent were not eligible for any social security benefits.

No worker we spoke to was aware of any government programme. “I have never heard of it,” said Suresh Koli, 52, a carpenter. “All I know is that I need to fight a battle every day to have a meal at night.”

The consensus: government programmes are for the authorities that run them. Delhi’s ruling AAP created eight labour organisations in January 2019, to seek votes from the unorganised sector.

These labour organisations aimed to include workers in transportation, water, wholesale markets, construction, health, railways and electricity boards. Almost all the workers we spoke to in Sangam Vihar or Mahipalpur had heard to these labour bodies and expressed skepticism of government.

Arun Jha, 43, a construction worker at Mahipalpur said in his 14 years on the job he had never heard of an organisation for labourers. Told of the AAP’s effort, he said: “It’s just for elections, nothing else.”

Back in Harola, when asked of expectations from the new Bharatiya Janata Party government, Raju, the worker we began this story with, referred to Modi’s 2014 promise of better days and said: “We are in search of acche din