Despite robust economic growth, India's formal manufacturing sector has seen modest employment creation, with a marked increase in contractualisation of jobs over past two decades
ASI data reveals that the share of directly employed factory workers has declined, while contract workers’ share surged from 21.8% to 40.7% between 2001-02 and 2022-23
Companies are increasingly relying on contract workers for flexibility, cost savings, and navigating rigid labour laws, particularly in capital-intensive industries
Contract workers face job insecurity and lack essential benefits such as paid leave, leaving them in a volatile employment situation without collective bargaining power
Contractualisation is not limited to manufacturing; it’s growing in non-farm sectors like trade, transport, health, and education, highlighting a deterioration in job quality
With the implementation of the four labour codes, there is hope for improved working conditions and more stable employment opportunities in India’s evolving job market