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India's Labour Reforms: The Informalisation of Work and Growth of

Semi-formal Employment

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SPECIAL ARTICLE
India’s Labour Reforms
The Informalisation of Work and Growth of
Semi-formal Employment
Secki P Jose
The changes to the nature of employment in India are
evaluated in the context of deregulatory labour reforms.
A distinctiveness in the current government’s approach
to labour (de)regulation is identified, locating it within
the longer-term processes of informalisation,
contractualisation and casualisation of work in the
country. Contrary to the notions that such reforms create
formal employment, they deteriorate the quality of jobs,
and the nature of employment then being created can
only be characterised as semi-formal. This is seen in
the dissolution of the formal–informal binary as
informality is increasingly incorporated into the
formal employment.
The author would like to thank the organisers of the Leeds Disrupting
Technology conference, colleagues and the journal’s anonymous
reviewer(s) for their helpful comments. Any errors are of the author’s.
Secki P Jose (secki.jose@dmu.ac.uk) is a postdoctoral research fellow
at the School of Business and Law, De Montfort University, Leicester,
United Kingdom.
Economic & Political Weekly EPW november 12, 2022 vol lVii no 46
I
ndia’s transition to a market-oriented economy witnessed
the gradual liberalisation of product and financial market
regulations. However, labour regulations did not change
apace as attempts to deregulate Indian labour laws and legisla-
tions were often countered by workers and trade unions, res-
ulting in the facade of labour regulations remaining relatively
intact. Despite this, a proliferation of non-standard and infor-
mal employment relationships gradually served to erode the
quality of employment in the country. This happened through
the expansion of precarious contractualised and casualised
employment, resulting in relatively unregulated forms of work
becoming the new normal within the country’s formal sectors
despite several decades of substantial economic growth.
Over the years, Indian employers deployed various strate-
gies to circumvent labour regulations, curtail workers’ rights
and deny employment benefits. However, following liberalisa-
tion, the state provided more overt support to such practices.
This direction, somewhat inadvertently and prematurely, culmi-
nated in a situation where several local states attempted a
near-total suspension of all labour regulations using the COVID-19
pandemic as a pretext (Sundar and Sapkal 2020). Though this
endeavour was thwarted through expeditious protests and
legal challenges, the episode nevertheless revealed how labour
rights and welfare were now limited to encouraging employ-
ment, with most labour market institutions being firmly
viewed by the state as being secondary to or even hindering
certain objectives of economic development.
In line with global neo-liberal tendencies encouraging the
marketisation of employment (Baccaro and Howell 2017),
India’s right-wing Bharatiya Janata Party (BJP) government
too has been advancing an agenda to “reform”—a euphemism
for deregulation—and “modernise” the landscape of Indian la-
bour regulations. Analysing the Indian government’s actions
presents a complicated terrain not in the least because of the
manifold schemes and policy vacillations, but also due to the
complex and diverse de facto realities of work in India.
This paper nevertheless attempts to consolidate a reading of
the current changes to the formal employment while contex-
tualising it within the longer-term processes in the country. It
argues in the main that employment in India is shifting deeper
into the domain of informality and unlike claims of formalisa-
tion, much of the so-called formal employment being created
may at best be characterised as semi-formal.
53
SPECIAL ARTICLE
The paper begins with outlining the current labour reforms
being undertaken. It then locates these reforms as a continua-
tion of longer-term processes of employment degradation in
India. The paper highlights some key employment-related social
security measures, proffered by the state in lieu of institutional
regulation. Finally, the paper synthesises and evaluates the dis-
cussions to arrive at a characterisation of the current changes.
The Politics of Labour Reforms: Continuity in Change
Shortly after assuming office in 2014, the right-wing BJP-led
coalition government kick-started several initiatives to “rational-
ise” and simplify Indian labour legislation. The most significant
of these were a series of newly drafted Labour Codes: the Code
on Wages (combining four labour laws), Code on Industrial
Relations (three laws), Code on Social Security (eight laws) and
the relatively crudely-assembled Code on Occupational Safety
and Health (13 laws). The Code on Wages was passed as a law,
with minimal discussion in Parliament in 2019. The remaining
codes were passed without any discussion in September 2020
amid an opposition boycott of Parliament and the Indian peak
of the COVID-19 pandemic.
Though yet to be implemented across the country (as of 2022),
the potential changes being introduced through these
codes have been discussed extensively—in Jayaram (2019),
Rajalakshmi (2019), Sarkar (2019), Secki (2015), Shyam Sundar
(2019) among others—generally finding the “reforms” project
being about addressing certain concerns of capital rather
than any concrete improvements or demands from labour.
For example:
The proposed labour reforms initiatives will reduce the complexity
in compliance due to multiplicity of labour laws and facilitate setting
up of enterprises and thus creating the environment for development
of business and industry in the country and generating employment
opportunities without diluting basic aspects of safety, security and
health of workers. (MoLE 2019)
The pro-capital nature of the reforms is reinforced by the
fact that the process of drafting the codes hardly involved
workers or trade unions. Trade unions discerned the subse-
quent soliciting of their inputs as tokenism, paying lip service
to tripartism, even as their core demands remained largely
unheeded (Newsclick 2019; Hindu 2019). In this regard, it is
intriguing that the International Labour Organization (ILO)
has been broadly supporting the ongoing labour law reforms
and deregulation despite the near-unanimous opposition from
almost all national trade unions in the country (ILO 2020).
The non-involvement of unions in decision-making is hardly
surprising given the fact that the government has not conducted
the Indian Labour Conferences (ILCs) since 2015—an annual
tripartite conference organised by the Ministry of Labour and
Employment (MoLE) that had otherwise been held regularly
since India’s independence.
It is pertinent to note here that on matters related to labour,
the BJP has displayed long-standing and rather consistent
commitment to an agenda of deregulation. Much of the current
reforms were in fact recommended earlier by the bipartisan
Second National Commission on Labour (SNCL) in 1999. The
54
SNCL had been constituted by the then-ruling BJP-led coalition
government with the express mandate to “rationalise” and
“modernise” the system of labour regulations (Sundar 2006;
Ratnam 2002). The SNCL’s recommendations were not imple-
mented subsequently because the BJP lost power.
But over a decade later, a majority political mandate allo-
wed the BJP to pick up where it had left off. To be clear, the
four labour codes are perhaps the most significant of a series of
critical modifications that have been introduced since. Other im-
portant changes introduced are, for example, the 2016 addi-
tion of fi xed term employment (FTE) into the Industrial
Employment (Standing Orders) Act, 1946, specifically for the
garment and apparel industry with the rather questionable
argument that this is a “seasonal” industry and therefore
requires shorter-term employment contracts. Having tested
waters and found little opposition, its scope was quietly
expanded to all industries in 2018.
The BJP’s deep and long-term enthusiasm towards labour
deregulation is, arguably, rather distinctive and perhaps more
“active” than its predecessors (Mezzadri 2010). For instance,
during the COVID-19 pandemic, several BJP-led states attempted
to suspend all labour laws, drawing opposition not only from
trade unions but also from employers (Chaliawala 2020). Almost
all these initiatives have been largely unilateral, excluding
workers and unions from any real consultations or involvement
in decision-making processes, arguably setting the BJP apart
from earlier Indian governments (Sundar 2020).
Most of these reforms are consistent with the predilections of
its ideological parent, the Rashtriya Swayamsevak Sangh (RSS),
which has expressed views about labour rights and protective
labour regulations as relics of a socialist, if not communist,
past and has therefore not opposed these changes, despite
some rather weak protestations by its trade union-affiliate, the
Bharatiya Mazdoor Sangh (BMS). Moreover, the RSS’s anti-labour
disposition has a material basis in the fact that traders and small/
medium enterprises, who form an important social and political
support base, stand to benefit significantly from deregulation.
Put together, the BJP’s economic agenda—characterised by
a distinctive combination of neo-liberal market orthodoxy,
nationalist protectionism and labour deregulation—contrib-
uted to wage stagnation, reduced aggregate consumer demand
and an economic slowdown well before the pandemic in 2020
(EPW 2019).
The Erosion of Formal Employment in India
It would be premature to view the current labour deregulation
as a recent phenomenon that can be attributed to the rightward
shift in state polity. This decline of formal employment and
related labour protections are part of older and more pernicious
proclivities of Indian employers towards informal and non-
standard forms of employment (Harriss-White 2003; Jenkins
1999; Nagaraj 2004). Through the country’s structural trans-
formation, a significant portion of non-agricultural employment
comprised of various forms of non-standard work arrangements
that precluded workers moving out of agriculture from access-
ing the benefits of regular formal employment (Breman 1999).
november 12, 2022 vol lVii no 46 EPW Economic & Political Weekly

Perhaps the most significant and long-standing method for
this has been the use of contract employment, that is, employment
mediated through contractors, outsourced third-party agencies
or labour intermediaries (Bhattacherjee 1999; Nathan 1987;
Ramaswamy 1988; Srivastava 2016). This is by no means a re-
cent phenomenon, for the use of contract employment in In-
dia—and the challenges it posed to regulation—were recor-
ded as early as 1946, in the Labour Investigation Committee
(LIC) or the Rege Committee report:
In many industries in India the system of contract labour appears to be
firmly entrenched … The principal industries in which contract labour is
largely employed are engineering, [public works], cotton textiles, dock-
yards, cement, paper, coir and mining … Whatever may be the grounds
advanced by employers, it is to be feared that the disadvantages are
far more numerous than the advantages. In the first place, the contract
system undoubtedly enables the principal employer to escape most of
the provisions of the Labour Acts … and it becomes difficult for ad-
ministrators of the law to come to grips with the system. (LIC 1946: 83)
Monolithic characterisations of the formal sector found in
discussions of the informal–formal economy seldom account
for dualism within formal employment, a phenomenon that has
existed in India at least from the pre-independence and early
postcolonial period. British colonial officers and the Indian ad-
ministrative/managerial elite enjoyed significantly different
working conditions and employment-related benefits from the
majority of Indian coolie or manual workers who were usually
denied the same. For instance, the now ubiquitous Employees’
Provident Fund (EPF) scheme was initially intended primarily
for British government and railway officers as a means of in-
centivising their Indian stint and provide a degree of protec-
tion (Dixon 1989). The scheme was expanded much later to
workers in six industries in 1952, and to 120 industries in 1969
(Wadhawan 1969).
Addressing the large variabilities in employment benefits and
working conditions, the Rege Committee had, at the time, recom-
mended the abolishment of contract labour from “perennial”
(or core) work in industry, though it felt that some reasonable
leeway in “non-essential” (or non-core) and peripheral work
could be permitted especially in sectors such as mining or
those involving “seasonal work.”1 This view resulted in a slew
of amendments being introduced into Indian labour legislation
around independence in 1947 to ensure that contract and
casual manual labourers were also included within the
formal legal definition of “worker” and that they too received
the same benefits as regular workers.
Though well-intentioned, the broadened legal definition of
“worker” had the opposite effect, serving instead to legitimise
and expand the use of contract labourers in industry. By the
1960s, when the First National Commission on Labour (FNCL)
was set up, the extensive use of contract workers was well-
documented in industries such as mining, construction, beedi-
making and ports. Contract workers still received a few of the
benefits of formal employment despite the fact that the firms
were often formally registered and carrying out core, organ-
ised capitalist production through the year. This wide preva-
lence of subcontracting and its attendant problems were seri-
ous enough to build a consensus for stricter and more
Economic & Political Weekly EPW november 12, 2022 vol lVii no 46
SPECIAL ARTICLE
specific regulation. This manifested in fresh legislation, the
Contract Labour (Regulation and Abolition) Act, 1971 (or CLA),
introduced in 1967 and passed as law in 1971.
The act attempted to improve the working conditions of
contract workers by clearly delineating and assigning respon-
sibilities to the principal (lead/main) employer, an aspect
that had become diffused due to the multiple employer rela-
tionships arising from subcontracting. Approving the general
direction of this legislation, the FNCL’s main recommenda-
tions called for a “… stricter regulation of contract work than
at present [and] the general direction of policy should be
towards abolition of contract labour in due course” (FNCL 1969:
1.24). The FNCL, much like the legislators of the CLA, 1971, had
hoped that fixing employer responsibilities and equalisation
of working conditions through the new legislation would lead
to improvements and the eventual abolition of the practice.
However, this did not happen.
Though the CLA, 1971 somewhat slowed down the expan-
sion of contract labour, by bringing to bear greater scrutiny on
the practice, employers avoided the regulation by increasing
“putting-out” or subcontracting production itself out to small-
er firms where employment was often casualised and progres-
sively less regulated or even unregulated (Nagaraj 1984; Rama-
swamy 1999). Following liberalisation in 1991, the practice
gained legitimacy and the share of contract and non-regular
workers in the industrial workforce began increasing rapidly.
Figure 1, based on the Annual Survey of Industries (ASI)
data, shows how the share of contract workers increased over
time in the industrial workforce. The share of non-regular and
Figure 1: Share of Contract Workers in Industry (%)
40
30
20
10
0
1980 1984 1989 1995 2000 2005 2010 2015 2018
Sources: 1980—Ramaswamy (1999); 1984, 1989—Anant et al (2006); Rest—Author.
All based on Annual Survey of Industries (various years).
contract workers in industry increased steadily, going from
less than 10% during 1990 to over a third by 2015.
The growth of non-regular (both casual and contract) workers
has been particularly pronounced in private industry since
the 1991 economic liberalisation (Goldar and Suresh 2017;
Sood et al 2014). Several explanations have been offered to
explain this rapid increase; some of these include restrictive
employment regulations and onerous compliances for em-
ployers (Dougherty et al 2011; Mehrotra 2020; Ramaswamy
2013; Sapkal 2016), the dynamics of globalised supply chains
and markets (Anant et al 2006; Kannan and Raveendran 2009),
and attempts to prevent unionism (Kapoor and Krishnapriya
2019; Saha et al 2013). Though insightful, most of these
discussions seldom consider the parallel rise of contract workers
in public sector employment.
55
SPECIAL ARTICLE
Figure 2: Share of Non-regular Employment in Central Public Enterprises,
1980–2020 (%)
40
30
20
10
0 early Indian state to encourage and enforce formality in employ-
1980 1985 1990 1995 2000 2005 2010
Source: Compiled by the author, based on Public Enterprise Survey (various years).
A closer look specifically at public sector employment reveals
that contract or non-regular employment, otherwise common
in the private sector, has similarly expanded significantly in
the public sector as well. Figure 2 charts the growth of non-
regular (includes contract and casual) workers in Central Public
Sector Enterprises (CPSEs), where such workers now constitute
over a third of total employment.
Not only did total employment in CPSEs decline over time,
but the remaining workforce has been significantly substituted
with non-regular workers (the majority being contract workers).
Arguments that attribute informality to regulatory/compliance
costs (and therefore demand deregulation) cannot explain
the rise of non-regular employment in the public sector where
marginal costs for compliance are minimal. This rather indi-
cates how informalisation and contractualisation are linked
to more elementary motives for reducing labour costs (both
wage costs and employment benefits) and countering workers’
organising/unionisation.
An important yet underexplored sociological explanation
for such forms of employment is that they allow employers to
exercise greater “control” over production (Marchington et al
2005; Smith 2015) principally by introducing new segmenta-
tions among workers and expanding the range of sanctions
that may be used to discipline workers.
Non-regular and informal forms of employment significantly
increase the scope for employer despotism, arbitrariness and
discrimination, not only in decisions regarding who enters
formal employment, but also who/how an employee will be
disciplined. Informality in employment then serves as a vehicle
to operationalise social power, especially in heterogeneous
societies such as India, what with its complex terrain of mani-
fold social discriminations (Harriss-White and Gooptu 2001).
It not only facilitates the operationalisation of harassment, ex-
ploitation and discriminatory social relations in the work-
place, but also brings with it forms of feudalism and neo-bond-
age into “modern” industry and within the perimeters of
“modern” urban India (Breman 2004; Srivastava 2005, 2019).
Ironically, the use of non-regular employment in “modern”
production is probably more advanced in developing countries
such as India than in developed economies, where such forms
of employment have grown only recently. Though contract
56
and casual employment originally emerged as a colonial-era
segmentation in the formal sector workforce, it continued and
has only expanded under domestic capitalists in independent
India. The same post-war era that saw the emergence of the
Western welfare state—viewed as the “golden age” or the les
trente glorieuses of Western labour and social democracy—
was marked in India by the gradual expansion of non-standard
employment arrangements that excluded its emerging non-
agricultural workforce from the realm of formal employment
and its benefits.
Though a combination of trade unions, left-wing political
pressure, social activism and judicious industrial policy led the
2015 2020
ment relationships, the reluctance of Indian employers to
formalise employment and its related bureaucratic processes was,
and continues to remain, a long-standing problem and defining
feature of Indian capital-labour relations. Moreover, based on
the growth of casual employment in the public sector, it is clear
that over time, and particularly in the decades since economic
liberalisation, the favourable disposition towards formal, regular
employment has been largely abandoned by the state itself.
The Semblance of Social Security and ‘Weak’ Formalisation
It is interesting to observe how the current spate of labour
reforms have been accompanied by a significant reconfigura-
tion of labour institutions that may appear, prima facie, to be
contradictory and expand employment-related social security
and formality. This is, in fact, very much in line with neo-liberal
prescriptions that call for reshaping labour protection to
support the realities of newly marketised employment (Jenkins
1999). This section critically scrutinises two flagship government
social security schemes: the EPF scheme for formal employees
and the Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM) pen-
sion scheme for those in the informal economy.
While a quick reading might view such schemes as antithe-
tical to the intentions of deregulation, they arguably provide
only a veneer of formality and protection even as the degradation
of employment continues in the background. What emerges from
this is a “flexicurity” regime characterised by high flexibility but
with little or declining social security and weak formalisation.
Even as employment benefits and protections declined in
India, the EPF scheme has remained somewhat exceptional in its
stability. The government turned its attention to this scheme
as a solution to two particular labour market issues. First, the
paucity of statistics regarding the Indian labour market. The
scheme was seen as a statistical source to address the twin
problems of the lack of high-frequency labour market data and
low employment generation. A “presentation” by Ghosh and
Ghosh (2018) was used to lend legitimacy to the initiative of
utilising the EPF as the primary source of high frequency infor-
mation on the labour market and employment generation.
However, the importance accorded to EPF numbers as a sta-
tistical source—to counter criticisms of unemployment and
lack of job generation—spurred attempts to inflate its sub-
scriber base in order to show higher enrolment and therefore
higher job creation. For instance, several private provident
november 12, 2022 vol lVii no 46 EPW Economic & Political Weekly

funds were incorporated into the EPF and other employers were
incentivised to join the EPF programme with the government
paying their share of EPF contributions, for new hires who
earn less than `15,000 per month.2 Not only has this been pre-
sented as formal job creation but has also led to employee re-
classification with indications of wage stagnation around this
level. Statistically, the EPF numbers continue to provide little
insight into work and employment in India as its database is
not publicly accessible, does not adhere to any standard em-
ployment classification systems, is plagued with issues of du-
plication, is inflated by temporary incentive schemes and im-
portant information such as “active contributors” have been
withheld from publication (since October 2020).
Second, the government sought to address the issue of the
high informal employment in the Indian economy by turning
the EPF programme as a vehicle to “promote formalisation”
(PIB 2021). By getting employers to register their employees
with the EPF scheme, it is assumed that employment is forma-
lised. Needless to say, this a rather elementary interpretation
of formalisation. Taking the EPF as the single indicator for for-
malisation ignores the varied facets that constitute formal
employment—such as signed job contracts, formal workplace
rules, standardised working conditions, regulation of sanctions,
provision of occupational safety and health (OSH) and em-
ployment benefits among others—as well as the enforcement
of all of these (as opposed to systems of self-certification).
Many of the benefits that could have accrued through employ-
ment formalisation and the expansion of EPF are negated by
the simultaneous encouragement of casualisation, reduction in
enforcement, discouragement of unionisation and liberalisation
of dismissals—all of which contribute to informality and pre-
carity. In other words, formal employment, where only the EPF
functions, remains formal only in this aspect and little else.
Needless to say, this is a rather weak form of formalisation that
falls short on many measures of formality and job quality.
Apart from the evident shortcomings of the superficial ap-
proach to formal employment, the social protection schemes
themselves—whether for the formal or informal sectors—pro-
vide little by way of security. It is important to recollect how
the (First) National Commission on Labour had noted that the
EPF scheme at best provides some “quasi” form of social secu-
rity (FNCL 1969: 163). Because it is a contributory savings
scheme relying on deductions from wages, it offers little more
than the protection of a savings account.
Similarly, the PM-SYM pension scheme for informal (or
unorganised) sector workers is a defined contribution, defined
benefit scheme relying on regular monthly contributions from
informal sector workers for at least 20 years in order to make
them eligible to earn a relatively small and fixed state pension
beginning in 2040. This not only ignores the basic precarious
nature of incomes of informal workers who may not be able
to contribute in a sustained manner for such a long period
of time—already significantly disrupted by the COVID-19
pandemic—but its predefined benefits are rather minuscule,
hardly accounting for inflation, low life expectancies and
provides little security from more immediate and pressing
Economic & Political Weekly EPW november 12, 2022 vol lVii no 46
SPECIAL ARTICLE
problems, which regularly debilitate informal sector workers
such as health, income and employment shocks.
Thus, even though such quasi-social security initiatives appear
to heed the call for greater formalisation and social security by a
host of international organisations such as the ILO (R204), the
United Nations (UN) (SDGs 1 and 8) and Washington Consensus
institutions, in reality, the schemes provide little by way of either.
Outside the employment dynamics, the workers’ EPF corpus
has been moving into increasingly risky territory due to its
increased exposure to financial markets (currently at 15% of
corpus fund). Since 2015, the government—which had hither-
to invested provident funds in government instruments only—
has been progressively investing the funds into riskier financial
products. For instance, between 2015 and 2020, the Employees’
Provident Fund Organisation invested over `1 lakh crore
(around $12.5 billion at current exchange rates) in equity mar-
kets (Indian Express 2020). Though this was initially restricted
to index and exchange traded funds, the range of financial
products eligible for investment was gradually expanded to
include riskier and lower-graded products. Not only does this
process gradually shift market risks onto workers’ savings
but also results in the counter-intuitive situation where, like
marketised pension funds, labour directly funds and subsidises
capital profligacy and market speculation. The marketisation
of worker savings was widely protested by several central and
banking trade unions, but met with little success.
From Formal to Semi-formal Employment
As various facets of the employment relationship are deregu-
lated—be it from the purview of labour legislation or collective
agreements—employer flexibility and discretion and, therefore,
informality increases. Though the informal economy is char-
acterised as being distinct, albeit connected to and servicing
the formal economy (Guha-Khasnobis et al 2006), non-standard
forms of employment and labour deregulation result in infor-
mality, breaching the boundaries of formal organisations and
permeating through its internal relationships, thereby blurring
the boundaries between the formal and informal forms of work.
To illustrate, informal employment is defined as employment
that is not
subject to national labour legislation, income taxation, social protec-
tion or entitlement to certain employment benefits (advance notice of
dismissal, severance pay, paid annual or sick leave, etc) ... for which
labour regulations are not applied, not enforced, or not complied with
for any other reason. (Hussmans 2004: 6)
However, as the neo-liberal deregulation of work proceeds,
employment in formal organisations is progressively less
subject to legislative/collective regulation or employment
benefits, thereby exhibiting features that otherwise charac-
terise informal employment.
Whereas employment casualisation and marketisation pro-
vide organisations with numerical flexibility, the deregulation
of working conditions provides employers with a functional
flexibility that introduces arbitrariness into workplace rules.
Progress, in terms of a Weberian formalisation, with increased
rationality and reliability in economic relations, then gets stalled,
57
SPECIAL ARTICLE

if not reversed. This contributes to increased despotism within
workplaces, functioning in tandem with the hegemonic disci-
plining of neo-liberal marketised employment and minimal
social protections (Burawoy 1985). As previously pointed out,
compliance along one or a few select dimensions of formality
is largely insufficient to render corresponding employment
as formal. For example, in the recent industrial unrest at the
Bengaluru-based manufacturing unit of Apple’s contractor
Wistron, multiple levels of labour subcontracting eventually
culminated in highly informalised employment with poor
working conditions (including non-payment of wages) despite
all workers being formally employed and working in regis-
tered, organised firms (EPW 2020).
Focusing on a few elements of formality—such as job contracts
or basic social security—excludes the gamut of relations that
comprise formal employment. But at the same time, the existence
of some informal elements does not imply that non-standard
employment can be entirely characterised as informal either,
as is often done. Non-standard employment in formal organi-
sations is quite unlike the informal income opportunities and
work (such as self-employment or in the informal enterprises)
originally described by Hart (1973) because of the presence of
formal elements in work and the organisations.
In other words, casualised and subcontracted forms of employ-
ment in formal organisations are neither wholly informal nor
formal. Such employment that has formal elements but remains
unspecified in several significant respects is located, in an ana-
lytical sense, within a spectrum of semi-formality. For instance,
much like casualised work, newer forms of work (such as gig and
platform work) often have job contracts, work rules and formal
control mechanisms imposed by a formal firm. Such forms of work
differ from regular employment only in a few crucial aspects.
Exploiting certain indeterminacies of the labour process and
the (contract-based) segmentations in the workforce, forms of
semi-formal employment are thus distinguishable by the prev-
alence of unspecified or poorly defined procedures in matters
such as wage payments (quantity or frequency), discipline,
career progression and grievance redressal/dispute mecha-
nisms.3 The result is that employer discretion, informalism
and arbitrariness in these matters have greatly increased.
Over the past century, several indeterminacies in the pro-
duction or labour process had been standardised using labour
legislation or collective agreements. However, these hitherto
standardised elements appear to be gradually shifting and ret-
urning to the domain of the informal, and therefore discre-
tionary control of employers. Formalisation is, in many ways,
understood to be an important ingredient to the modernisa-
tion and rationalisation of economic relations. Specifically,
when applied to employment, it reduces employer arbitrari-
ness and discretion resulting in more reliable and predictable
employment relationships.
However, the tendency to deregulate employment runs counter
to the logics of formalisation, making the twin developmental
objectives of “deregulatory reforms/flexibility” and “formali-
sation” contradictory. Such processes have been contributing
to the steady informalisation of work and employment, not
just in India but across the world (Hart 2015). As regular for-
mal jobs are substituted with semi-formal or informal ones,
informality is exacerbated in the already highly informal Indi-
an economy. Such employment relationships exhibit high het-
erogeneity and are becoming entrenched in the economy.
Being difficult to regulate, rather than being wholly regu-
lated or unregulated, semi-formal forms of work will probably
be permanently under-defined and ever-changing, and there-
fore, permanently under-regulated.
Conclusions
The current deregulatory labour reforms in India can be iden-
tified as a continuation of longer processes contributing to the
informalisation of work and employment relations. Post inde-
pendence, during the socialist planning era, Indian employers
often tried to circumvent labour regulations, but in the post-
liberalisation era the very same strategies became legitimised,
couched as they are within the discourse of employer flexibi-
lity, deregulation and marketised employment. These process-
es accelerated under recent Indian governments as part of
their distinctively neo-liberal, nationalist, pro-capital agenda.
A historical analysis of work in India reveals how non-stand-
ard forms of employment have been a part of formal, organ-
ised production. Though this used to be largely restricted to
private enterprises, equivalent levels of non-regular employment
can now be found in the public sector as well. The (re)emergence
of such forms of employment in the public sector cannot be
explained by elementary neoclassical arguments blaming regula-
tory/compliance costs of formalisation. Rather, it indicates
more basic labour cost reduction strategies (principally wage
and benefits compression), anti-unionism and the operational-
isation of arbitrary, despotic labour “control” mechanisms.
It is obvious that semi-formal and informal forms of employ-
ment introduce precarity, irregularity and instability in indi-
vidual workers’ employment and incomes, thereby diminish-
ing the potential for sustained income earning and wage
growth. These processes further disproportionately affect the
traditionally marginalised and excluded sections of society,
undermining the basis for a balanced, broad-based and equita-
ble period of macroeconomic growth and development.

Notes
1 The term “seasonal” was originally associated
with agricultural or agri-based industries
that operated only during specific agricul-
tural seasons and for less than 180 days in
a year.
2 This incentive is part of schemes such as the
Pradhan Mantri Rojgar Protsahan Yojana for
general firms and the Pradhan Mantri Paridhan
Rojgar Protsahan Yojana for garment/apparel
firms. The schemes were started in 2016 where
the government pays the employer’s contribu-
tion to the EPF and Employee Pension Scheme.
The government has also offered to cover a
portion of the employer’s share of ESI contribu-
tions (that provides some basic medical cover-
age). All schemes have been capped for those
earning less than a salary of `15,000. Similar
new schemes such as the Pradhan Mantri Garib
Kalyan Yojana and the Aatmanirbhar Bharat
Rojgar Yojana were also introduced during
COVID-19.
3 This is a key differentiating characteristic of
subcontracted or casualised employment from
regular employment, whether or not third-party
labour intermediaries/labour contractors are
part of the relationship.

58 november 12, 2022 vol lVii no 46 EPW Economic & Political Weekly

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