Wages and Working Conditions on the Formal Labour Market in India

The labour market structure plays a vital role in chalking out the development and growth path of a country. The labour market polices, institutions, and patterns of employment in turn determine the structure of the labour market. Thus, it is essential to understand and study the labour market structure. The Census of 2011 estimates the total population of India to be 1.21 billion (Census of India, 2011). But the labour-force participation to population ratio in India is at 56%, as compared to the world average of almost 64%. This is mainly because of low female labour-participation rate which stands at a mere 31%. Even though about 49% of workers are engaged in the agricultural sector in India, their contribution to output was merely 14% of total GDP. We cannot neglect the fact that nearly 92% of the workers are absorbed by informal employment and have almost no social protection, coupled with very low wages (Institute for Human Development, 2014)