Labour in India

The labour in India consists of about 487 million workers, the second largest after China. Of these over 94 percent work in unincorporated, unorganized enterprises ranging from pushcart vendors to home-based diamond and gem polishing operations. The organized sector include those employed by the government, state-owned enterprises and private sector enterprises. In 2008, the organized sector employed 27.5 million workers, of which 17.3 million worked for government or government owned entities.

India has numerous labor laws such as those prohibiting discrimination and child labor, those that aim to guarantee fair and humane conditions of work, those that provide social security, minimum wage, right to organize, form trade unions and enforce collective bargaining. India also has numerous rigid regulations such as maximum number of employees per company in certain sectors of economy, and limitations on employers on retrenchment and layoffs, requirement of paperwork, bureaucratic process and government approval for change in labor in companies even if these are because of economic conditions.

India is considered to be a highly regulated and most rigid labor law countries in the world. Rigid labor laws in India have been criticized as the cause of low employment growth, large unorganized sector, underground economy, use of casual labor and low per capita income. These have led many to demand reforms for labor flexibility in India.