Contract workers now form 42% of India’s organised manufacturing workforce, up sharply from 16% in 1997-98, marking the steepest rise in decades
Firms turn to contract labour to bypass rigid labour laws, gaining flexibility and cutting costs, but leaving workers with little job security or benefits
The trend varies widely across states. In Bihar nearly 69% of the workforce is on contract, while Kerala’s share is less than a quarter, showing uneven enforcement
Factories in rural areas rely more heavily on contract workers than those in urban centres, keeping wages low and weakening collective bargaining power
Contractualisation is no longer confined to low-skill jobs. Even capital-intensive industries increasingly use contract workers, pointing to a systemic shift
Operationalising the four labour codes is critical to balance flexibility with fair conditions, improve security for workers, and sustain economic growth