Labour Regulations and Informalization of Industrial Labour in India

  • Bishwanath Goldar
  • Suresh Chand Aggarwal


Informalization and contractualization of labour in India’s organized manufacturing is analysed using NSS Employment-Unemployment Survey (EUS) and ASI data for 1999–2000 and 2011–12. It is found that between 1999–2000 and 2011–12, there was a significant increase in the employment share of both informal workers (57–72 per cent) and contract workers (20–35 per cent). But, beyond this, there is considerable dissimilarity in trends. The analysis reveals that, in several industries and states, a substantial part of directly employed workers hold informal jobs. Also, while the intensification in contractualization was relatively faster among states with inflexible labour markets, this is not true for informalization. The econometric results suggest that employment protection legislation has caused contractualization of industrial workers, but probably it has not been an important factor driving informalization.


Informalization Informal sector Informal workers Contract labour Organized manufacturing Labour market rigidities Labour regulations Employment protection legislation Industrial Disputes Act (IDA) Contract Labour Act (CLA) NSS EUS ASI 


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Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Bishwanath Goldar
    • 1
  • Suresh Chand Aggarwal
    • 2
  1. 1.Former Professor, Institute of Economic GrowthNew DelhiIndia
  2. 2.Former Professor, Department of Business EconomicsUniversity of DelhiNew DelhiIndia

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