“What do you understand by ‘informalisation of labour’? Write your answer with special reference to India.” (2017)
Informalisation of labour is the process by which a growing share of work loses statutory and contractual protection: job security, social security, regulated hours and collective bargaining. It has two faces, the expansion of the informal sector and the spread of informal employment inside formal establishments. India’s National Commission for Enterprises in the Unorganised Sector (2007) called the second the “informalisation of the formal sector”.
Forms in India
- Contractualisation: contract workers in organised manufacturing rose from about 20 per cent in 1999-2000 to 42 per cent in 2023-24 (Annual Survey of Industries).
- Casual and self-employment: PLFS 2025 finds 56.2 per cent self-employed and 20.2 per cent casual; only 23.6 per cent hold regular wage jobs, many without written contracts.
- Outsourcing in public institutions: sanitation, security and “guest” teachers. In Jaggo v Union of India (2024) the Supreme Court said government misuse of temporary contracts “mirrors” the gig economy.
- Platform work: NITI Aayog (2022) estimated 77 lakh gig workers in 2020-21.
- Feminised home-based work: garments, beedi and agarbatti on piece rates.
Why it has deepened
- Liberalisation after 1991: global competition pushed firms towards flexible, cheaper hiring.
- Size thresholds in labour law: firms stay small or hire through contractors.
- Agrarian distress: Jan Breman (Footloose Labour, 1996) describes workers circulating between village and city, neither peasant nor proletarian, recruited through jobbers and tied by advances.
- Weak unions: trade unions remain confined to a shrinking permanent core and rarely reach contract or home-based workers.
Social consequences
- Exposed vulnerability: during the 2020 lockdown, the government told Parliament that over one crore migrant workers had returned home, with no employer accountable.
- A divided working class: Jonathan Parry (Classes of Labour, 2020) found regular and contract workers at the Bhilai steel plant forming distinct classes, with different lifestyles and marriage patterns.
- Caste and gender: Dalits, Adivasis and women crowd the lowest rungs.
State response
The four Labour Codes, in force since 21 November 2025, extend minimum wages to all workers, mandate appointment letters and recognise gig workers. e-Shram has registered about 31.9 crore unorganised workers. Critics note that the same codes ease lay-offs and normalise fixed-term work.
Conclusion
Informalisation in India is less a residue of tradition than a feature of its growth model, in which output rises while protection shrinks. Whether the new codes reverse it depends on enforcement and on informal workers’ own organisation.