Home-based workers in India

Home-based workers in India

The article understands the home based workers in India, who are part of the informal sector, but who are totally dependent on a firm or contractor or a sub contractor for supply of raw material and sale of the product produced by them. The article also deals with the International Labour Organization (ILO) convention governing the home based workers, understanding the activities undertaken, their numbers, their plight and what can be done by stake holders to improve their present status.

The International Labour Organization (ILO) a tripartite United Nations organisation has been known for its contribution towards labour, employers and governments by coming forward with conventions, so that the same when ratified by a country become applicable to that country. The General Conference of ILO in 1996 adopted the Home Work Convention (also called Convention No. 177).

The salient features of this convention are:

l The term home work means work carried out by a person, to be referred to as a home worker,

1. In his or her home or in other premises of his or her choice, other than the workplace of the employer;

2. For remuneration;

3. Which results in a product or service as specified by the employer, irrespective of who provides the equipment, materials or other inputs used, unless this person has the degree of autonomy and of economic independence necessary to be considered an independent worker under national laws, regulations or court decisions;

Persons with employee status do not become home workers within the meaning of this convention simply by occasionally performing their work as employees at home, rather than at their usual workplaces;

The term employer means a person, natural or legal, who, either directly or through an intermediary, whether or not intermediaries are provided for in national legislation, gives out home work in pursuance of his or her business activity.

Under Article seven of the convention the national policy on home work shall promote, as far as possible, equality of treatment between home workers and other wage earners, taking into account the special characteristics of home work and, where appropriate, conditions applicable to the same or a similar type of work carried out in an enterprise.

The International Labour Conference in its 103rd session in 2014 and the 104th session in 2015 held discussions on transition from the informal economy to the formal economy and this has major relevance to a country like India, where the major employment in the labour market is in the informal sector and home based workers are a part of this sector. India has not ratified this convention.

Home-based work in India

Home based work in India historically evolved from home craft production activity, where the individual house hold members acquired the skill from their parents and produced the products in their home/yard needed by the residents in the vicinity. To produce these items at home a variety of materials are used such as bamboo, grass, leaves, flowers, wood, cotton yarn, synthetic yarn, silk yarn, silver thread, gold thread, mud, clay, terracotta, ceramics, glass, metallic mineral material, cotton, silk, etc. Many of these items are unique and have become household utility. The Government has set up (i) Khadi and Village Industries Commission (KVIC) (ii) Central Silk Board (iii) Coir Board (iv) Handloom Board (v) Handicrafts Board (vi) Forest Corporations (vii) National Small Industries Corporation and these institutions are suppose to play an active role in helping in the design, development, marketing and distribution of these products to Indian and foreign customers.

We are well aware of items produced in various states of India for example chikan work by home based women workers in and around Lucknow in Uttar Pradesh , chanderi design sari weaving from Madhya Pradesh, bangles from Firozabad in Uttar Pradesh, "sanganeri print" (clothes with a colourful block print) in and around Jaipur, phulkari a traditional embroidery from Punjab, hand embroidered table cloth/bed sheets/shawls from Kashmir, bidri ware from Karnataka, bell metal item of Bastar from Chattisgarh, plus many other products made in various parts of India. There are also many private players in India who get specific products produced/upgraded by home based workers and sell in the domestic and export market., where the money is really made by the various players in the supply and distribution chain and the home based worker who works on a piece rate system, by and large earns a paltry sum and is the lowest beneficiary in the system.

These home based crafts historically led to the caste/sub caste system where specific products were produced by certain people/community for local consumption. Specific geographical locations in India because of availability of raw material, availability of skilled artisans, and the support of rich persons/rulers/governments/major buyers has led to the development of clusters which produced unique products and also the skills got upgraded producing quality products. Presently workers both in rural and urban India are involved in various economic activities at home depending on the inherited/acquired/upgraded skills. In practically every states of India, a particular location is famous for certain specific crafts, textiles and food products.

Most States in India are famous for the design, weaving, and embroidery of wearing apparels and textiles made by home based workers. Often the home based workers have to fight against all odds at every stage of their business, be it in availability/buying the raw materials or promoting their products, arranging for capital or access to insurance covers, etc. To his/her utter misfortune the home based worker is by and large exploited by the supply chain. Hence, it is important to ensure that the benefit of value added services reaches the home based worker.

The definition of home based workers is the category of workers who carry out remunerative work in their homes or adjacent/nearby premises, but the premise is not owned by the employer. Some home-based workers are independent self-employed workers who take the entrepreneurial risk and there are others who are totally dependent on a firm or contractor or a sub contractor for supply of raw material and sale of the product produced. The second categories of home based workers are also referred to as sub contracted home based workers; but obtaining official statistics to assess the number of home based workers becomes difficult in every country unless the classification in bifurcation is made of those that take the entrepreneurial risk and the others who are totally dependent on a firm or contractor while collecting the data in the national survey.

Number of home-based workers in India

Homenet South Asia and Women in Informal Employment Globalizing and Organizing (WIEGO) in December 2013 have compiled and analysed home-based workers in India based on data collected by the National Sample Survey Organization (NSSO) through the Unemployment Survey in 2011-12. Details of the same, as published by them are briefly given below. {More Details Reference (2)}

The total home based workers in India in 2011-12 are 37.45 million of which 20.51 million are rural and 16.94 million are urban. The total home based women workers in India in 2011 -12 are 16.05 million of which 8.71 million are rural and 7.34 million are urban. The total home based men workers in India in 2011 -12 are 21.4 million of which 11.79 million are rural and 9.61 million are urban.

The industry in which home based workers in India in 2011-12 are involved is manufacturing (54.7 per cent), whole sale and retail trade (26.1 per cent), other community social and personal services (5.2 per cent), hotels and restaurants (3.7 per cent), education (3.1 per cent), real estate -- renting and business activities (2.3 per cent), transport, storage and communication (2 per cent), financial intermediation (1.1 per cent), health and social work (1.1 per cent), construction (0.6 per cent), mining and quarrying (0.1 per cent).

An analysis of the manufacturing industries in which home based workers in India in 2011-12 are involved is manufacture of wearing apparels (23.72 per cent), manufacture of textiles (21.17 per cent), manufacture of tobacco products (19.42 per cent), manufacture of wood and products of wood and cork (8.58 per cent), manufacture of food products and beverages (8.21 per cent), manufacture of furniture (8.16 per cent), manufacture of other metallic mineral products (3.06 per cent), others (7.68 per cent) .

From the data analysis it is clear, that the home based workers in India are mainly in manufacture of wearing apparels, manufacture of textiles, manufacture of tobacco products and also in whole sale & retail trade.

The total of 37.45 million workers makes India the biggest home for home-based workers; hence there is a need for Government, trade unions, NGOs, employer organisations and academic institutes to jointly work to help the conditions of these workers.

Earnings of home-based workers in India

The Centre of Indian Trade Unions (CITU) with the support of the ILO carried out a research study in 2006 & 2007 among 3,300 (i.e. 2720 women and 580 men) home based workers in 40 districts in ten states of India i.e. – Andhra Pradesh, Assam, Delhi, Haryana, Kerala, Madhya Pradesh, Maharashtra, Tamil Nadu, Uttar Pradesh and West Bengal. The survey covered four metropolitan cities, 41 towns (small, medium, as well as relatively large) and 43 villages. Coverage in this study is more towards women than men, though the national statistics given in the paragraph above indicate a higher proportion of men in home based work. The report of the study was published in 2013 and though the data collected is old because it is for 2006 and 2007, still it is indicative of the low earnings of these workers. {More Details Reference (1)}.

The study was carried out by CITU activists meeting home based workers and the report as published indicates the following:

  • 93 per cent were involved in manufacturing processes and only 7 per cent in services inclusive of retail trade. One third of the workers were involved in textiles including handloom, tailoring, etc. Others included beedi rolling; incense sticks (agarbatti) manufacturing, bamboo and coir products, flowers, food processing, etc.

  • Majority of workers mentioned that poverty was the main reason for doing home based work.

  • The average monthly earnings from home based work was found to be as low as Rs 538. About 42 per cent were earning between Rs 50 and Rs 500. About 35 per cent earned between Rs 520 to Rs 1,000. About 59 per cent earned less than Rs 1000/- per month.

  • More than 60 per cent of the workers explicitly stated that their work was irregular while 39 per cent said it was regular. Irregular availability of work would be a factor in determining the low monthly earnings of many workers since 64 per cent of those earning between Rs 50 to Rs 500 were those who did not get work regularly.

  • 47 per cent of the workers said that family members, i.e., spouse, other adult relations and generally children worked with them. 55 per cent of all the workers worked a full 8 hours and more. 18 per cent were working more than 10 hours in the day.

  • More than three fourths of those working more than 10 hours a day managed to earn only between Rs 25 and Rs 50. On average the earnings of the surveyed workers were less than Rs 25 for a day’s labour, when work is available.

  • Less than ten per cent of the workers had any social security.

  • The self employed workers constituted a mere 14 per cent of the home based workers. In other words, the overwhelming majority, 86 per cent were home workers according to the definitions of the ILO Convention.

  • About 31 per cent of the workers who answered the question informed that agents, brokers, contractors supplied work to them. These were followed by merchants, traders, businessmen who were the employers of some 20 per cent of the workers. About 23 per cent did not answer this question.

  • In general more than half of the workers in home based work are either completely uneducated or have had only primary schooling. About 19 per cent of the total workers were non-literate but there were wide regional variations.

The work in majority of the cases is a combination of home and an economic activity and there is a need to see how the earnings of this category of workers can reach the prescribed minimum wage level specified by the State Government. It is unfortunate that the monthly earnings of home based workers by and large are very low.

There are also home based workers in metropolitan cities in India, who through small office home office (SOHO) carry on various economic activities and earn substantial income. However, these numbers in comparison to the national figures are few and limited. These home based workers are well educated and well networked. They are mostly involved in manufacturing/trading activity at times also involving high priced elitist items like diamond/gold/silver jewellery, fashion garments and high priced cookery items. There are others who also supply packed lunch for office goers from their home. There are also some individuals in cities, who are well qualified and involved in Information IT-based applications from their residence involved operating AUTOCAD/other applications from home PC's provided by employer because of space limitations.

NGOs of home-based workers in India

Lijjat Papad is a well documented case of how seven women living in a group of five buildings in Girgaum, Bombay (now called Mumbai) started a venture to create a sustainable livelihood using the only skill they had i.e. cooking. The seven women borrowed Rs 80 from Chagganlal Karamsi Parekh (also called Chagganbaba) and manufactured packets of papads in 1959 and sold the papads to a known merchant in the local area. The women initially were making two different qualities of papads, to sell the inferior one at a cheaper price. Chaganbapa who became their guide advised them to make a standard papad and asked them never to compromise on quality. He emphasized to them the importance of running home based work as a business enterprise and maintaining proper accounts. In 1962, the brand name Lijjat (in local language Gujarati Lijjat meaning tasty) was chosen by the group for the products and the organisation was named Shri Mahila Griha Udyog Lijjat Papad.

In July 1966, Lijjat registered itself as a society under the Societies Registration Act 1860. In September 1966, Khadi Village and Industries Commission (KVIC) formally recognised Lijjat as a unit belonging to the "processing of cereals and pulses industry group" under the Khadi and Village Industries Act, which helped the organisation get benefits of working capital at subsidised interest rates and certain tax exemptions. The rest is history, as today Shri Mahila Griha Udyog Lijjat Papad popularly known as Lijjat, is an Indian women’s cooperative not only involved in producing papads but in producing and marketing of other fast moving consumer goods needed for house hold consumption like khakra, chapatti, spices, wheat flour, bakery products and detergents (cake, powder, liquid). This is an excellent case of women empowerment and improving livelihood of home based women workers. Apart from Shri Mahila Griha Udyog Lijjat Papad there are also other examples of NGOs/cooperatives in India which have done excellent work on improving livelihood of home based workers and these have not been covered in this article.

Corporate sector role in home-based workers in India

There are corporate sectors in India that have taken up business related projects which would help in improving the livelihood of home based workers. ITC Ltd in 2004 undertook the activity of developing the brand Mangaldeep of incense sticks (agarbattis) to benefit the home based workers and in later years helped the Tripura Government’s ambitious agarbatti project, which involved developing clusters to manufacture agarbattis statewide. Also ITC Ltd entered in an agreement with the Cane & Bamboo Technology Centre in Guwahati, Assam to undertake similar ventures in other parts of the northeastern region, except Tripura. The inhabitants of the northeastern region were trained by ITC Ltd to make agarbattis as per the quality norms laid down by ITC.

The company buys back the entire production that is manufactured in this cluster. Incidentally, ITC Ltd has entered the Rs 18 billion (i.e. Rs 1800 crore) agarbatti business to improve livelihood of home based workers and small scale units spread across Bangalore, Agartala, Hyderabad and Kolkata. ITC Ltd brand Mangaldeep entered the market in 2004 and is today the country’s second-largest agarbatti brand after the leader Cycle brand which is manufactured by Mysore Products and General Trading Company which entered this business in 1948. This is an example of corporate sector developing scale, utilizing its managerial and marketing capability to bring about a transformational change in creating improved livelihood for the home based workers in specific locations through an identified product which meets the needs of the customers at affordable price.

Large corporations based on their experience, capabilities and strengths could look at supply chain linkages for products that are/can be made by home based workers which involves zero or low capital investment in fixed asset of any plant/machinery, so that the activity can improve the livelihood of home based workers. Apart from ITC there are also other examples from the corporate sector in India which have done excellent work on improving livelihood of home based workers and these have not been covered in this article.

Need to use CSR projects

As per the new Companies Act, most companies in India are required to spend 2 per cent of their net profit on CSR project. Each company chooses a CSR project within the framework of Section 135 under Schedule VII of the Companies Act, and the first reporting had to be done before the year ending 31 March 2015. Companies have been looking at various CSR projects and some of them have also done base line survey to ensure that the project helps in improving livelihood of the targeted population that they plan covering. Employment enhancing vocational skills has been listed under Schedule VII in Section 135 of The Companies Act, 2013 which can be included by companies in their CSR projects.

Hence companies could take up CSR projects in specific districts where their plants are located or where they are interested and enhance vocational skills plus teach simple management concepts to the home based workers to improve their livelihood .The strength of the corporate sector is that it can facilitate in generating scale, by developing simple sourcing, manufacturing, quality, financial, distribution and marketing systems which can help in transformation of livelihood of home based workers by facilitating them to earn better wages. The objective of these projects would be to improve the existing livelihood earnings of home-based workers through improved productive, safe and environment friendly economic activity that they undertake by producing quality products and facilitate in marketing the same. This will help the home based worker to improve their earnings which presently in most cases are pathetic.

Role of employer in home-based workers in India

The national and regional employer/chambers of commerce/trade associations in India can play a role in encouraging their members to take up the cause of home based workers by undertaking some of these activities.

(i) Publicise case studies of member enterprises who have made home based workers part of their supply and distribution chain and helped in improving their livelihood.

(ii) Discussions with members in supporting home based workers in areas associated with activities of their member enterprises, either as a business proposition or as a CSR activity.

(iii) Conferring Awards to members involved in contributing to the betterment of home based workers.

(iv) Involve owner enterprises who are directly dealing with home based workers by making them members, and partner with stake holders i.e. trade unions, NGOs, academic institutes and local government to improve the functioning of the owner enterprises and home based workers. Also develop a voluntary code for owner enterprises.

(v) Undertaking research studies in select States in specific manufacturing activity where home based workers are involved in the supply chain i.e. manufacture of wearing apparels, manufacture of textiles, manufacture of tobacco products, manufacture of wood and products of wood and cork, manufacture of food products and beverages, manufacture of furniture, manufacture of other metallic mineral products to know the present status and develop strategies for improvement.

Conclusion

The Second National Commission on Labour dealt in detail with the opinions it received from Academicians, Labour Lawyers, Trade Unions, Employer Organizations, Professional Bodies and NGOs on the informal sector and in its report released in September 2002, came forward with some major recommendations for the informal sector like:

(i) Ratification of ILO Convention 177 of 1996 on Home Based Work

(ii) Social Security Network for the informal sector

(iii) Right to work, already a directive principle, should be made a Fundamental Right under the Constitution of India.

In India, Government, trade unions, NGOs, employer organisations and academic institutes need to jointly work to ensure that each of the stakeholders helps the home based workers as India is the biggest home for home based workers which are more than 37.45 million.

(i) Government needs to deal with social security coverage. Also Government organisations like KVIC and other bodies need to work on specific products and regions to improve the earnings of the home based workers.

(ii) Trade unions and NGOs need to extend support and facilitate in organising these workers on crafts and region basis and ensuring certain minimum working conditions and benefits.

(iii) Corporate sector to facilitate training, technical up gradation, marketing and branding and also seeing if they can be part of the supply chain.

(iv) Academic Institutions helping in improving design of products produced and also carrying out research.

All stakeholders need to work in a direction to improve the plight of the home based workers by ensuring that they can earn a decent wage.

References

(1) Centre of Indian Trade Unions (CITU) “A Survey on the Conditions of Home Based Workers in India” study in 2006 & 2007 published in 2013.

(2) Govindan Ravichandran, Ratna M. Sudarshan & John Vanak “Home- Based Workers in India : Statistics and Trends” published by Homenet South Asia and Women in Informal Employment Globalizing and Organizing (WIEGO) in Dec 2013

(3) Ratna M Sudarshan and Shalini Sinha “Making Home–based Work Visible: A Review of Evidence from South Asia” published by Women in Informal Employment Globalizing and Organizing (WIEGO) Working Paper (Urban Policies ) No. 19 January 2011.

Published in July 2015 issue of “Current Labour Reports” & “Arbiter”

ABOUT THE AUTHOR:

Dr Rajen Mehrotra is immediate Past President of Industrial Relations Institute of India (IRII), Former Senior Employers’ Specialist for South Asian Region with International Labour Organization (ILO) and Former Corporate Head of HR with ACC and Former Corporate Head of Manufacturing and HR with Novartis India. Email:rajenmehrotra@gmail.com

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