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Disinterring the Report of National Commission on Labour

This paper disinters the report of the National Commission on Labour to reveal the ideological basis of the changes sought in the labour laws. Changes suggested in the labour laws flow from an understanding of labour that is derived from the perspective of capital. The policy goal of the NCL recommendations is to position labour in a manner that will ensure the expansion of competitive capitalism in India. The article deploys the class-focused Marxist approach to reveal how the NCL attempted to change the meanings of labour, the working day, work culture and indeed that of the labour rights as a whole.

Disinterring the Report of National Commission on Labour A Marxist Perspective

This paper disinters the report of the National Commission on Labour to reveal the ideological basis of the changes sought in the labour laws. Changes suggested in the labour laws flow from an understanding of labour that is derived from the perspective of capital. The policy goal of the NCL recommendations is to position labour in a manner that will ensure the expansion of competitive capitalism in India. The article deploys the class-focused Marxist approach to reveal how the NCL attempted to change the meanings of labour, the working day, work culture and indeed that of the labour rights as a whole.


he second National Commission on Labour submitted its report in September 2002. Its policy goal was pointed – change the labour laws. The importance of the National Commission on Labour (henceforth, NCL) must be judged in the proper perspective.1 We claim that the NCL has a view of labour grounded on the logic of global capital harbouring the project of competitive capitalism. This in effect is the neoliberal platform based on neoclassical economic logic that explicates the place and role of labour from the perspective of capital. Not only is this approach troubling for its effort to reduce the multifaceted dimensions of labour to the logic of capital. It is equally disturbing to note that this approach is virtually forwarded as the only manner in which labour ought to be viewed, thereby evacuating the discursive terrain of any other way of viewing labour.

Instead of taking the perspective of capital, we situate labour as the object of analysis by placing it at the centre of our discursive terrain. To produce this alternative perspective, we take recourse to a class-focused Marxist approach that produces the terrain of an alternative economic cartography in terms of the processes of performance, appropriation, distribution and receipt of surplus labour [Marx 1967, 1963, 1968 and 1971; Resnick and Wolff 1987, 2002; Chakrabarti and Cullenberg 2003]. Capital as and when interrogated will now be viewed from this alternative perspective of labour, producing a contrasting understanding of the socially produced effects and policy recommendations. Accordingly, labour laws as looked at from the Marxian perspective will evidently view the NCL recommendations quite differently from what NCL seeks to produce from a perspective of capital.

We train our focus on the organised sector due to the inordinate importance attached to the logic of competitive capitalism in the NCL report that demands a breakdown of the “labour rights” in the organised sector. In addition, as we shall argue, the dismantling of the received “labour rights” de-links the enterprises within organised sector from a host of constraints that, in turn, unlocks its access to the unorganised sector, thereby opening a new dimension in the history of capitalism in India.

While we believe that many enterprises are already working, at least, in principle, according to the changes recommended by the NCL, the document is still important for it reflects the state’s ideological basis of looking at labour and that, if implemented, will change the labour conditions as also the judicial structure pertaining to labour-related issues. At stake here is the resolution of a struggle over the changing perception of labour in India, that of the very meaning of enterprise (what is permissible and not permissible within it) and the “socially accepted” labour rights, as also the meaning and role of trade unions.

In Section I, we present a Marxist theory of labour that will be used for the purpose of disinterring the NCL report. In Section II, from that Marxist perspective, we produce an overall reading of the NCL report in order to claim that its basic policy goal encoded in the recommended changes in labour laws is to perpetuate competitive capitalism within India. This basic policy goal of the NCL report is exemplified through its recommendations on ‘Redefining the Worker’ (Section III), ‘Work Culture’ (Section IV), ‘Working Hours’ (Section V) and ‘Labour Contractors and Casualisation’ (Section VI).

I A Marxist Theory of Labour

Following a reading of Marx (1967; 1963, 1968 and 1971), Resnick and Wolff (1987) situate the basic premise of Marxist theory on a distinction between necessary labour and surplus labour. Let us explicate.

The total labour time exerted by direct producers in the process of creating goods and services can be divided into two components. First, there is the necessary labour component, which is taken as the labour value of the basket of goods and services needed to reproduce the direct producers. Second, the direct producers exert labour time beyond necessary labour. Following Marx, we define this extra labour as surplus labour. When the product is exchanged for a price, the surplus product equivalent of surplus labour is said to acquire the form of surplus value. Otherwise, surplus labour will simply retain the form of surplus product, as is the case within household. Whether as surplus produce or surplus value, surplus labour is appropriated by some entity and distributed by the same appropriators. Surplus is needed to pay off for those processes that provide the conditions of existence for the labour process in general and necessary labour reproduction in particular. The condition providers receive a fragment of surplus labour for activating the process of advanced loans (for which the moneylender/bank receive a payment), the process of realisation of the sale of produce (for which the merchants receive a payment), the process of land credit (for which the landlord or state receives a payment), the process of advancing money capital against ownership (for which the shareholders receive dividend payments), the process of legalising the “enterprise” and getting police and administrative protection for running the “business” (against which payments are made to the state), the process of organising and supervising the direct producers (against which the managers receive a payment), and so on. The four processes of performance, appropriation, distribution and receipt of surplus labour constitute the class process.

Marxist theory seeks to explore and exploit the multi-varied ways in which the class processes effect and, in turn, is effected by other non-class processes in society. In this way, Marxist theory produces a class-focused but not class specific analysis of the economy and society.

Class struggles are fundamentally struggles over class processes, that is, over the processes of surplus labour which take place between contingently situated agents and groups in a certain socio-historical setting. However, not only class struggles but also other non-class struggles over processes that are in constitutive relations with class processes (such as gender, caste, race and so on) are also of interest. In this context, the struggle over labour laws is of fundamental importance to Marxists since changes in this set of legal non-class processes are bound to alter the class processes.

We define an enterprise as a conceptual site comprising a specific cluster of class and non-class processes. Constituted by a unique set of class and non-class processes, each enterprise is distinct. Instead of seeing enterprise as an economic entity reducible to class process or some exclusive process such as capital accumulation or profit maximisation, it is instead viewed as an overdetermined and non-reducible site of class processes and their constitutive economic, cultural, political and natural processes.

Regarding who appropriates the surplus, there are three possibilities.2 Appropriation is exploitative if the direct producers are excluded from the process of appropriation. Exploitative enterprises have been analysed as capitalist, feudal and slave. Non-exploitative mode of appropriation occurs if the direct producers are not excluded from the process of appropriation; instead, in some commonly decided manner, they share in the process of appropriation. Non-exploitative enterprises include the communist type or communitic type. Finally, the mode of appropriation is self-appropriating if both the performance and appropriation of surplus labour is done individually. Varieties of exploitative, non-exploitative and self-appropriating modes coexist across the social terrain, spanning sites in industry, agriculture, state, household, temple, school, university, brothel, etc.

Marxists consider exploitation unethical and unjust because

(i) it is based on the social theft of surplus labour (those who produce the surplus labour are excluded from the fruits of their labour), and (ii) it excludes the rest of society from distributional decisions since, under exploitative arrangements, the power of distribution of the mass of discretionary funds of society rests in the hand of the few appropriators perpetuating in turn the phenomena of marginalisation, inequality, poverty, environmental degradation and discrimination. Because it is found to be lacking on these two attributes, Marxists find capitalist organisation of surplus as also the order of capitalism built on its presumed centrality unacceptable and, in response, posit the end of “exploitation” and “unfair distribution” as its uncompromising standpoint to confront and terminate capitalism [Chakrabarti and Cullenberg 2003, chapter 7].

Given the importance attributed to competitive capitalism in the NCL report, our interest is particularly on the capitalist enterprise. A capitalist enterprise is a site of processes of performance and appropriation of surplus value as also the processes of distribution and receipt of surplus value (to landlords, merchants, banks, state, managers and so on) and numerous constituting non-class related processes (the market exchange that takes place, the gender and caste meanings that are produced, the rules of authority and power, and so on). This site qua enterprise is named capitalist because of the unique role played by a group of people named “productive capitalist” who personifies the two processes of appropriation and distribution of surplus value created by the direct producers. However, following Marx, “capitalist” cannot be reduced to simply “productive capitalist” and is instead differentiated. Let us explore.

A “capitalist” is one who personifies the possession of surplus value that in money form is called capital. Surplus value or capital can be generated in the process of circulation (advancing money, begetting more money). Following Marx, we name such capitalists as “unproductive capitalists”. Bankers, merchants and shareholders would be such “unproductive capitalists”. In contrast to these unproductive capitalists who generate capital from sources other than the labour process, “productive capitalists” appropriate and distribute the surplus value created in the labour process and thus also generate more money than what they started with. In terms of our definition of capitalist enterprise, the surplus value created by the direct producers is appropriated by the productive capitalists and distributed by the same to various claimants.

The productive capitalist must distribute its surplus value so as to satisfy a number of diverse conditions of existence that include the economic process (such as exchanging commodities in the market or using part of the capital for the process of further accumulation of capital), political process (such as paying the managers to supervise the workers or paying the state to keep the workers and unions under control), cultural process (such as paying for advertisement to create a certain image of the commodity produced by the enterprise) and natural process (such as paying to keep the working environment dust free). While the surplus value is distributed to a host of institutions and individuals, the varied group of unproductive capitalists forms an important and powerful constituent in terms of the claimants of surplus value.

As in the case of capitalists, Marxian theory also differentiates workers depending on the diverse positions that they occupy visà-vis class and non-class processes, an issue which will be addressed later.

II NCL Report: Neoliberal Agenda

At a basic level, the NCL divides the workers between the “organised sector” and “unorganised sector”. Given this binary, the NCL report telescopes two apparently dissimilar issues: the “labour reform” targeting the organised sector and the more tentatively forwarded recommendation of social security for the unorganised sector, including that designed for the women workforce and children. To reveal the unifying theme of the two disparate policy goals, we need to bring to the surface NCL’s underlying theoretical framework, which as we claimed earlier, is the neoliberal approach that produces and defends the logic of (global) capital. The logic of (global) capital helps procreate the principle of competitive capitalism. Competitive capitalism refers to a system designed to produce competition between (global) capitalist enterprises seeking to secure and/or expand the base for producing, appropriating and distributing capital qua surplus value.

One aspect of globalisation is to develop the system of competitive capitalism world-wide. This requires the capitalist enterprises to seek constitutive linkages with various conditions of existence at a global level, forming in the process what Chakrabarti and Dhar (2005) and Chakrabarti, Dhar and Cullenberg (2007, chapter 5) describe as the circuits of (global) capital. Briefly, they define the “circuits of global capital” as all those processes that are directly or indirectly connected with the multi-varied global capitalist enterprises. These connecting processes are situated within the bank, merchant, state, local capitalist enterprises, and so on. Numerous non-capitalist enterprises in the unorganised sector are also part of the connecting processes. Together, these processes constitute the circuits of global capital. The circuits of global capital thus span a much wider space than that specified by the physical reach of all the global capitalist enterprises combined. Given this vastly disaggregated and de-centred operational space, capitalist enterprises compete with one another through the circuits of global capital in order to create, sustain and expand the processes of surplus values or capital – both productive and circulating. The NCL recommendations in this direction is supposed to facilitate the effort to create and expand conducive circuits of global capital in order to allow competitive capitalism to get entrenched in India.

Importantly, the above mentioned logic of (global) capital based on the principle of competitive capitalism functioning through the circuits of global capital repudiates, that is, forecloses the very existence of exploitation and indeed of surplus labour as such [Wolff 2002; Chakrabarti, Cullenberg and Dhar 2007, chapter 2]. Instead, the distribution of income is seen as payments to the factors of production for the resources they lend in the process of the production of output. Thus, the workers, landlords and capitalists lend labour, land and “capital” against which they receive “wages”, “rent” and “profit”. What they receive is in tune with what they contribute in the production of output, which is their delivered marginal product. If each is getting the rightful return against their contribution, there is no question of exploitation. Expelling exploitation from the discursive terrain is important because the category of exploitation captures the social loot of a portion of value of product equivalent to surplus labour. This process of looting is foreclosed by the principle of marginal productivity that expels any such unethical moment from the discursive terrain, turning, instead, that unethical moment into an ethical gesture – each getting what they contribute and hence deserve, that is, their respective marginal product. The process of foreclosure of the process of exploitation in the creation of surplus value legitimises the “right” of productive capitalists to appropriate and distribute the surplus value created by others’ labour and for the unproductive capitalists to receive a share of it.

From a Marxian perspective, the NCL report telescopes this transmutation of the unethical moment of exploitation into an ethical moment of “fairness” concerning wage and security, signalling the absence and indeed disavowal of the very idea of exploitation. It produces a conception of “work culture” that seeks to defend and legitimise the wage-productivity nexus in order to expel the spectre of exploitation from the social realm.3

The NCL contends that while the management is already committed to productivity, the workers are not.4 To counter this, the NCL wants to produce what it says is a “systematic arrangement” that will guarantee the social reproduction of the wageproductivity nexus which in turn must form the founding basis of the relation between the workers/trade unions and employers. The social reproduction of the wage-productivity nexus (subsuming the moment of foreclosure of exploitation) is, however, dependent upon harmonious and stable relations between the two contending parties.5 A host of measures seeking to redraw the boundary between the permissible and impermissible “mindset” and “action” zones of the workers are sought as part of the “systematic arrangement”.

Why the labour laws need to be reconsidered in this manner is answered by invoking the aspect of competitive capitalism opened up by the globalisation process. Competitive capitalism demands two things from the labourers: (i) acceptance of wholesale cost-cutting as a matter of right of employers which, by default, constitutes the right to shed labour, and (ii) acceptance of the wage-productivity principle that would guarantee the maximum intensity of labour usage. NCL acknowledges that the two aspects are sacred and must be secured through necessary changes in the labour laws.6 Both these conditions are deemed necessary for a capitalist enterprise to survive in the face of global competition and, to keep on, to use Marx, “pumping out” the maximum possible amount of surplus value from the workers.

Here we can discern a definitive pattern. The logic of (global) capital encapsulating competitive capitalism demands the social sanction of cost-cutting and wage-productivity nexus as a matter of right for the employers qua capitalists which can only be guaranteed in a harmonious social scenario where the workers are seen as accepting this right, a guarantee that NCL attempts to produce. In this context, NCL sees itself as an integral part of the new economic policy that seeks to position, secure and expand the exploitative process of appropriation and distribution of surplus value in India on a global setting.

Given this background, it makes sense for NCL to focus on the organised sector, for here, as it concedes, the workers’ acceptance of the wage-productivity nexus and the employer’s right to cut costs is as yet not satisfactorily guaranteed. The organised sector includes the capitalist enterprises (the site of productive capitalists) as also those enterprises that provide their conditions of existence such as bank enterprises, trading enterprises, share trading enterprises, and so on (the sites of unproductive capitalists). Not just the existing labour laws but the current conceptions of “worker” and “workers’ rights” are considered as contravening the logic of (global) capital and are seen as posing serious barriers to the rights sought by the employers/ capitalists, both productive and unproductive. Consequently, what the NCL attempts to change in the organised sector are not simply the labour laws but also the conception of the worker by invoking the aspect of “work culture”. It seeks to institutionalise a change in the workers’ “mindset” regarding who they are and what is rightfully theirs.

This is in sharp contrast to the unorganised sector where the wage-productivity nexus is downplayed. Similarly, the usual cost-cutting race observed between capitalist enterprises is not what is seen as taking place within the unorganised sector. Given that the reforms recommended in the organised sector are not considered as applicable for the unorganised sector, what is instead emphasised for the unorganised sector is the aspect of social security which, the NCL says, is to be guaranteed by the employer and the state or some combination of both. In this sense, we aver that the NCL recommendations can be seen as reforming the labour laws in the organised sector and offering social security in the unorganised sector.

Other than their role in maintaining the competitive competence of enterprises, one reason why capitalists need the rights of closure and cost cutting is to gain access to the unorganised sector. Freedom of closure and cost-cutting give the capitalist the ability to shed their own operations and outsource them to the unorganised sector, which is seen as capable of producing the same good or service at lower cost. Thus, unlimited access to the unorganised sector enterprises allows (i) organised sector enterprise to acquire the outsourced products at low cost in order to use it as a means of production for further production of the final commodity, and (ii) for global trading enterprises to buy and sell the product at cheaper prices. This enables the enterprises in the organised sector to lower costs and/or charge competitive prices for their produce.

A host of “reforms” have been initiated in the name of new economic policy that attempts to institutionalise the linkage of unorganised sector enterprises within the broader circuits of global capital. As part of that policy the numerous subsidy protections for the unorganised sector from government are taken away or sharply reduced. Just as there is an international reverse army of labour from where enterprises in the organised sector can now pick and choose, there is similarly an effort to create a reserve army of enterprises in the unorganised sector that can be possibly accessed by these organised sector enterprises.

The unlimited access to the unorganised sector, however, requires that the barriers, including the labour related ones that remain fossilised within the perimeter of capitalist enterprises, needs to be dismantled. Consequently, the existing “labour rights” and trade union power of the organised sector have to be curbed and their meaning so redrawn as to allow the capitalist enterprises in the organised sector unrestricted access into the world of the unorganised sector.

We can surmise that the emphasis of NCL remains the labour rights in the organised sector whose dismantling and even possible truncation is important because, first, it allows the capitalist enterprises to directly compete against one another and, second, the capitalist enterprises get unlimited access to the unorganised sector thereby enabling these enterprises to gain competitive advantage of a different kind. Both these aspects, of course, help secure and facilitate the process of extracting, appropriating and distributing the maximum amount of surplus value by the “productive” capitalists. As receivers of surplus value, the “unproductive capitalists” in the banks, merchants, shareholders (as also the state and managerial bureaucracies) too are beneficiaries. Not only do the latter receive the surplus value but also use parts of that already distributed surplus value to invest in other value creating activities (circulating capital), making markets such as the stock market grow, both in size and volatility.

III Redefining the Worker

To see how the NCL sets out to practically redefine the meaning of worker, let us explore the meaning of worker from a Marxist approach. From a Marxist perspective, the workers are disaggregated and broadly clubbed into two types: productive and unproductive. The term “productive” labour refers to the direct producers who create surplus value in a capitalist enterprise in order for the surplus to be appropriated by “productive” capitalists. In contrast, unproductive labourers are those who do not produce surplus value for the productive capitalist.

At an elementary level, the unproductive labourers can be divided into four types. The first group is the “internal” unproductive workers employed by the capitalist enterprises and includes the clerks, managers, supervisors, sales and marketing agents, etc, who provide direct conditions of existence for the production of surplus value by “productive labourers” and its subsequent appropriation by “productive capitalists”. Second, we have already explained that part of the surplus value created by the capitalist enterprises is distributed to other “unproductive capitalists” such as the merchant capitalists, the bank capitalists, the shareholder capitalists and the state for providing these with various external conditions of existence. The “unproductive capitalists” and state employ a host of workers – the second group of “external” unproductive labourers – such as clerks, accountants, managers, supervisors, state bureaucracy, etc – to ensure that the guaranteed conditions (such as the processes of buying and selling commodities, lending money or lending ownership capital, political and legal support) are completed against which they receive wages as part of the surplus value already distributed to the “unproductive capitalists” and state. Thirdly, unproductive labourers include those direct producers who exert surplus labour in other non-capitalist types of enterprises.7 Finally, there are multiple labouring activities providing those conditions of existence that enable direct producers engaged in noncapitalist enterprises to produce surplus labour and its subsequent appropriation.

Through this distinction between productive and unproductive labour, and between various types of unproductive labour, Marxist theory is able to capture the diversity of labouring activities and their relation with one another as well as the varied capitalist and non-capitalist employers. This is never to emphasise that productive workers are in any way considered as superior to unproductive workers but is invoked to, first, distinguish the social setting of labouring activities in capitalist class processes from those in other class and non-class processes, and second, to highlight the specificity of the capitalist mode of appropriation from other non-capitalist modes of appropriation. The analysis of the disaggregated working force that is produced through this differentiation between the “productive” and “unproductive” help us conceptualise the multiple positions occupied by the workers in concrete reality, sometimes even in conflict with one another. Accordingly, the category of “working class” as consisting of all those labourers who perform labour and receive remuneration (monetary or in kind) resembles what Laclau called the “kaleidoscopic movement of differences”.

Deploying the Marxian approach helps make visible the attempt by NCL to displace the conceptions of worker and of “working class” in which the two indicators of income and status fixed in terms of the type of work play an instrumental role.8

Let us first focus on wage income. The NCL recommends dislocating those workers from the definition of “workers” and henceforth protection of labour laws who hit upon a salary limit, say, of Rs 25,000/- pm. Following the Marxist theory, we can never claim any necessary association of workers with income or status. Instead, what is commonly attributable to the name “worker” is its performance of labour, whether productive or unproductive. Workers can be rich or poor, have high or low status. While high or low income, high or low status, more or less property do have an effect on the organisations of surplus labour and their conditions of existence, one cannot reduce the aspects of income/status to that of labour. While each does effect the other in important ways, processes pertaining to income (and status) are conceptually distinct from those concerning the performance of labour and this distinction is important in maintaining the connection of a disaggregated “working class” to that of labour. Airline pilots or automobile workers are “productive labourers” by virtue of the fact that their performed labour enables the production of surplus value that is appropriated by “productive capitalists”. Whether the “productive labourers” receive Rs 25,000 or Rs 1,00,000 as wages is not an issue for their categorisation as worker. Similarly, the income of unproductive labourers too is not material for its due place within the “working class”; what is pertinent is the performance of labour whether for non-capitalist enterprises or for providing various conditions of existence to capitalist and non-capitalist enterprises.

In sharp contrast to the NCL viewpoint, Marxists would worry about income questions of different kinds. In this regard, questions that acquire importance are: “whether the workers are getting the socially necessary equivalent wages or not”; “who appropriates the income in the form of surplus value”; “to whom and how that income is distributed”. There is a deathly silence in the NCL report regarding the question of workers’ participation/non-participation in the processes of appropriation, distribution and receipt of the wealth that their labour creates. Instead, the focus of the report remains singularly trained on dividing the “workers” from the “non-workers” on the basis of a ceiling wage fixed arbitrarily thereby transforming the meaning of who is a worker and who belongs to the “working class”.

The second aspect used to differentiate the “worker” is status, which is again used to further differentiate the workers from nonworkers in terms of the assigned job. Now, Marxist theory says that status could be very well mixed since an individual could be simultaneously occupying two positions within an enterprise, say, as a productive labourer and as an unproductive labourer involved in the process of supervision, two distinctly different processes. Moreover, NCL attests that those who take spot/ technical decisions as against more manual and mundane types of work should not qualify as workers by virtue of having a different status. However, we can argue that not only are taking spot/technical decisions common in any kind of labouring practice but these workers, irrespective of their assigned work, perform surplus labour and hence should qualify as workers. Nothing prevents the worker from taking spot decisions as part of the process of performance of surplus value, that could include, say, the automobile workers responding immediately to the breakdown of a machine or the airlines pilot responding with emergency landing in the event of some technical failure in the aircraft.

What could be the motive of disqualifying workers by the criteria of wage income or status? We believe that the answer lies in the point that competitive capitalism demands, among other things, increased protection from socially created barriers such as the received “labour rights” and trade unions. These barriers are especially seen as problems in case of high value creating industries such as airlines and automobiles as also in services sector such as banks. The NCL seeks to meet this demand of competitive capitalism by excluding a major chunk of the workforce from the definition of “worker” by the criteria of income and status and in this way literally dislocate them from any access to labour rights. This exclusion should give the “productive capitalists” in capitalist enterprises and “unproductive capitalists” in bank enterprises, shareholding enterprises, trading enterprises, etc, along with the top management they appoint, an overall control over the labour process within the enterprises.

IV ‘Work Culture’

Another aspect given special importance by the NCL is “work culture”.9 In a theme that recurs throughout the NCL report, a worker must remain attentive to two aspects – rights and responsibilities. It is claimed by NCL that the rights of workers must be balanced with that of responsibility in order to create a harmonious existence within an enterprise that would guarantee stability and peace along with increased output. In this regard, NCL recommends a host of checks and balances that fix the rights and responsibilities in order produce a certain understanding of work culture. As against the “rights” being legally guaranteed by the NCL, “work culture” requires that workers should stand ready to exert labour of any asked amount, in whatever form required and with the greatest possible intensity (productivity). This requirement that is demanded from the worker constitutes the responsibility or duty of the workers, a requirement that comes with the rights handed over to the workers. The “rights” of workers to have access to a “fair” wage and “minimum social security” must be offset by a return in terms of maximum possible productivity they will deliver to the capitalists. That is, in NCL’s understanding, the days of invoking the workers’ rights per se are over.

In this context, the proposed responsibilities could be seen in terms of negative rights, that is, rights which are denied. For example, the “rights” of the workers rule out any form of legal recourse to closure, retrenchment and lay off for which no prior permission is required by the employer (6.87 and 6.88). The “rights” also include workers being subjected to the “act of misconduct” in case they refuse to undergo training and take up jobs assigned by the employers following any restructuring the enterprise could be undertaking or otherwise. Similarly, any kind of labour actions such as “go slow” and “work to rule” would also come under the “act of misconduct” (6.41). All such acts of misconducts are seen as social evils by NCL and the “strong arm of the state” is recommended to ensure that severe penalties on the workers and their organisations are imposed as deterrence (6.45, 6.46). Water supply, medical services, sanitation, electricity and transport are put under essential services and any kind of workers’ “rights”, including the right to strike, in such enterprises are recommended to be banned (6.48). These set of denied rights constitute the social responsibility of the “workers”.

While guaranteed by NCL, the workers’ right to strike too is truncated and represented in a dwindled form as compared to its current state. What is emphasised is collective bargaining between the trade unions and employers to sort out the disputes relating to wages (6.94) for which the mediating and juridical roles of appointed arbitrators of the Labour Relations Commission (6.90-96) and the Lok Adalats are found to hold great promise (6.97). Though the NCL also warns, “it should, however, be ensured that Lok Adalats are not used to “browbeat” workers into accepting payments which may be only a fraction of what they may be entitled under the law”. (6.97, pp 90). What is not spelled out is how such “deviations” by the Lok Adalats could be prevented. To stop the workers/unions from attempting to take legal recourse through any other avenues, it is recommended that the “jurisdiction of civil courts be banned in respect of all matters for which provision is contained in the relevant labour laws” (6.99, pp 90-91).

As far as strikes and lockouts are concerned, the NCL contains an important point of discrepancy between the workers’ closure (strike) and the employers’ closure (the lockouts).10 The workers are required to approve the strike by satisfying the objective condition of 51 per cent approval that can be verified in a positive sense. On the other hand, to declare lockouts, the employers are required to get the approval of the management or hold a perceived apprehension of threat to the management or the enterprise per se, which is a very subjective condition that is non-verifiable in a positive sense. With the top management comprising of members appointed by the employers, it would be surprising if the two ever differ, especially with respect to the question of confronting labour. Moreover, the “perception” stemming from “threat” coming from workers is largely subjective and cannot be verified as and when invoked. Consequently, we can say that the NCL gives the employers a free hand in declaring lockouts as and when deemed a fit case by the employers, without giving the same kind of right to the workers to declare strikes. To cap it all, even if the 51 per cent objective condition for strike is met, the government is given extraordinary authority to ban any strike whose violation will expose the workers to a host of penalties and the unions leading the strike faced with derecognition.

Overall, NCL recommends a set of rights and responsibilities to workers and employers though these remain disproportionately skewed in favour of the latter, forming in its opinion the paradigm of a new “work culture”. A “work culture” that is supposed to reconfigure the relation between workers and capitalists in order to stabilise and harmonise the economic environment that will help secure without interruption the processes of performance, appropriation, distribution and receipt of surplus value functioning through the circuits of global capital.

V Working Hours

Previously, the idea/right of an eight hour working day (whether implemented or not) won and/or legitimised through hard struggles was considered as socially acceptable workload per day for a worker. While this right was more confirmed in the west, it had different degrees of success in the rest of the world. However, despite the regional and sectoral differences in terms of its applicability, it was widely accepted to be a desirable goal from the perspective of labour. Currently, this social acceptability is under attack from the neoliberal project in general and NCL’s recommendations on working hours in particular symbolise this offensive against labour. It is understood in NCL that the concept of a fixed “working day” cannot be accommodated within the global field of competitive capitalism. If cost cutting measures, efficiency, competition, profit, etc, are the signs that chain our understanding of the economy, then the received concept of “working day” must be abolished. Quite diligently, NCL has kept the working hours outside its self-proclaimed goal “to ensure at least the minimum level of protection and welfare for workers in all sections of the economy – organised as well as unorganised” (4.6).11

From a Marxian perspective, technology and working hours have important relations with the rate of exploitation and “profit” of the capitalists. The rate of exploitation is the ratio of surplus labour (surplus value) to necessary labour (value of labour power), which captures the extent of the surplus labour pumped out of the worker per unit of necessary labour. The capitalist appropriator would want to increase the rate of exploitation because his existence, prestige and power is largely dependent on his ability to appropriate the maximum possible surplus value so as to have a higher discretionary fund at his disposal. This allows him greater leeway to disburse surplus value for the condition providers, including those who qualify as profit claimants. Given the correct environment, a higher rate of exploitation will increase profit; at least, that is what capitalists desire and compete for. Marxist theory highlights two factors for increasing the rate of exploitation: length of the working day and technical change.

The absolute surplus value production process (ASVPP) refers to the capitalist production process where there is a tendency to increase surplus value by increasing the length of the working hours. An increased surplus value follows from an increase in surplus labour time even as necessary labour time remains constant. In contrast, the relative surplus value production process (RSVPP) refers to a capitalist production process with rapid technical progress. Given a fixed working time, technical progress induces increase in labour productivity that reduces the necessary labour time by allowing the workers’ wage equivalent of basket of commodities to be produced in a quicker time thereby leaving more surplus labour time, that is, more surplus value available for appropriation.

After the 19th century, due to fixed working day and other laws pertaining to labour security and other benefits, the ability of capitalists to exploit through ASVPP got sharply circumscribed in Europe and North America; the capitalists main source of increasing the rate of exploitation became RSVPP. While in recent times the fundamental underpinnings of welfare states are under attack from neoliberals, the basic ingredients of some of the labour laws, such as an eight hour working day, still remain intact.

In the case of India, not least because of trade union and social movements, the received concept of “working day” retains a degree of social acceptability despite its non-implementation in many areas, including the so-called unorganised sector. The “working day” is seen as a marker for what is considered a “humane” day of labour. Because of this social acceptability, which constrains the functioning of capitalist enterprise, the NCL feels the urgency to address the issue so seriously, calling for a practical dissolution of the received concept of “working day”. Indeed, the logic of competitive capitalism that globalisation has let loose is in some ways already producing this dissolution which, now, NCL wants to be socially accepted and legalised.

Resulting from the logic of competitive capitalism as it finds its root in India, we are neither simply witnessing ASVPP nor RSVPP but rather a combined form of both. As the aspects of flexibility and mobility enable (global) capitalist enterprises to activate RSVPP in the South, the relatively loose rules and regulations prevailing in the South also allow the capitalists to exploit workers by increasing working hours in the ASVPP sense. In the Southern countries, technological change along with increasing working hours is offering hitherto unforeseen opportunities for capitalist appropriation of surplus value and its distribution to the claimants, mainly the unproductive capitalists and profit claimants.

In the era of globalisation, existing labour regulations in India pertaining to working hours, working conditions, security of jobs, etc, are coming under attack as different state governments compete with each other to facilitate the entry of global capital and its circuits in their respective domain. The circuits of global capital are increasingly presenting a picture of the Indian economy as a combined form of ASVPP and RSVPP – higher rate of exploitation from increased work hours combined with higher rate of exploitation from increased productivity. Against this background, the recommendations of NCL to loosen the concept of “working day” should not surprise us. As we see it, the issue is not whether the workers would want to work more hours (they may very well do so) but if there is at all the need for the concept of a working day which, if forfeited, would amount to accepting that, in the process of being employed, the workers are required to place their labour power at the disposal of the capitalists in a timeless space so that the latter can pump out the surplus value from the workers at their discretion.

VI Labour Contractors and Casualisation

While the presence of labour contractors in the process of casualisation is acknowledged by NCL (6.109), its role and the effects of its role on labour is generally kept outside the purview of labour laws. NCL accepts that one important element of the current phase of globalisation is the casualisation of labour.12 With NCL’s understanding of the economy embedded within the logic of (global) capital functioning on the principle of competitive capitalism, the linkage of labour with casualisation is deemed a necessary node for the growth of the Indian economy. However, the ongoing process of casualisation is producing its own momentum and creating powerful players such as labour contractors.

These labour contractors are effectively a group whom Marx referred to as “parasites” and they provide the conditions of existence to the enterprises through their control of the supply of casual labourers against which they receive a payment. These



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workers, who can be metaphorically described as “serfs”, form the army of the casual workforce under the control of the “lord”

– the labour contractors. The source of this control may be a result of a complex condensation of fealty, kinship and authority. As and when required, depending upon the manner in which the demand is placed, the labour contractors hand over this body of “serfs” in any divisible amount to the capitalists.

Working under a cost-cutting competitive setting, the enterprises in the organised sector have formed important linkages with these labour contractors for the following reasons: the presence of labour contractors reduces the search cost for finding casual labourers; the role of labour contractors helps the capitalists to circumvent the legal barriers pertaining to employing permanent workers, thereby enabling a reduction in those forms of surplus distributions (like medical benefits, cheap canteens, gratuity, provident funds, etc) that it had to otherwise provide to the permanent workers in addition to the wage rate (the value equivalent to necessary labour). The labour contractor’s role in activating casualisation keeps the wage rate, including those of the permanent workers (who are threatened with substitution by the casual workers), in check. Finally, the role of labour contractors and the casualisation process they help activate sharply reduce the power of trade unions, thereby enabling certain other social actors such as the capitalist appropriators and top management to acquire a decisive hold over the decision-making process within the enterprise. The presence of labour contractors is critical in enabling enterprises to reap all the above-mentioned “advantages” that allow the capitalists and top management to exercise a control over labour and, through that, a control over the costcutting procedure and possibilities of outsourcing. Insofar as dismantling the labour rights within an enterprise helps un-bundle the permanent workforce into a casual workforce, the enterprise in the organised sector now mimics the so-called “right-less” environment within the unorganised sector.

In countries such as India, we not only come across labour contractors in sectors such as construction and jute, where they had existed for a long time, but also in the more “sophisticated” industries such as engineering, finance and IT, where the socalled placement agencies participate in the process of contracting casual labour. It is also not surprising at times to find unions playing the role of labour contractors through their control of the labour supply (including even in some of the SEZs). In such cases, the apparently contradictory role of the trade union could and often does spill over into a situation of conflict between the trade union and its members, where the members equate the union with the capitalists and their appointed management.

The role of labour contractors can produce various effects on the wage rate of labourers. To see the first effect, let the enterprise pay the workers a wage equivalent to that of socially necessary labour, say, W1. Now, one possibility is that the enterprise would have to provide a payment out of surplus value (just as in case of banks, merchants, state and so on) to the labour contractors for providing a condition of its existence in the form of supply of casual workers. This payment would be W2. Resultantly, the amount of surplus available to be distributed to the other receivers of surplus value could be affected. However, if increasing amount of surplus value is extracted by intensifying the use of casual labourers, then even after payment to labour contractors, the distributed surplus to other agents will not decline. There is another possibility namely that the enterprise hand over the wages directly to the labour contractor instead of the labourers. The labour contractor then distributes the wage amount to the casual workers employed by the enterprise. In this case, while the enterprise legally pays the wage W1, the workers may not be receiving it since the labour contractors (as part of their receipt of payments) would deduct part of their wage, say W3. Thus, the workers would be getting W1 - W3, where W3 > 0. In other words, the workers could be super-exploitated. Not only is their surplus value appropriated by the capitalists, the labourers are not even receiving the value of labour power equivalent to the socially necessary amount of the basket of goods and services they require to reproduce their labour power. The aspect of “security” of workers against this powerful nexus of capitalists and labour contractors is not dealt with in the NCL report and no effort is made to institutionalise laws that would prevent such deplorable cases of serfhood and super-exploitation. However, given NCL report’s complicity with competitive capitalism and the logic of global capital, this is hardly surprising.




[We acknowledge Thirthankar Roy and Sumangala Damodaran for their valuable comments at the ‘International Conference on Development in Open Economies: Industry and Labour’ at the Academy of Third World Studies, Jamia Milia Islamia, New Delhi during March 6-8, 2006. We also thank Sunanda Sen. We are grateful to IDPAD for financial assistance. The usual disclaimer applies.]

1 The labour laws, which are a subset of the legal system pertaining to an enterprise, consist of a set of processes concerning various aspects (working day, working condition, right to strike, etc) relating to the labour employed in that enterprise. Putting it slightly differently, the labour laws are the state’s acceptance of what can be termed as labour rights, a legal guarantee referring to various aspects that the workers should enjoy in a specific socio-historical setting.

2 See Chakrabarti, Cullenberg and Dhar (2007), chapters 2 and 5. 3 See NCL Report, 2.123, 1.20 and 1.22. 4 NCL Report, 5.10, 5.11 and 5.12 5 See NCL Report, 5.3. 6 See NCL Report, 4.276, 6.87 and 6.109 7 See Resnick and Wolff (1987) and Chakrabarti, Cullenberg and Dhar

(2007, chapter 5). 8 See NCL Report, 6.18-20. 9 See NCL Report, 5.3, 5.7-9 and 5.20.

10 See NCL Report, 6.101 11 See NCL Report, 5.24-29 and 5.32. 12 See NCL Report, 4.272(d), 4.276 and 5.34.


Chakarbarti, A and S Cullenberg (2003): Transition and Development in India, Routledge, New York and London.

Chakrabarti, A and A Dhar (2005): ‘Imperialism in the Age of Empire: Global Capitalist Hegemony and the Foreclosure of Class’, Other Voice. Chakrabarti, A, S Cullenberg and A Dhar (2007): Global Capitalism and

World of the Third, World View Press, New Delhi. Government of India (2003): Report of the National Commission on Labour, Academia Foundation, New Delhi. Marx, K (1967): Capital, Volumes I, II and III, International Publishers, New York.

– (1963, 1968, 1971): Theories of Surplus Value, Parts I, II and III, Progress Publishers, Moscow.

Resnick, S and R Wolff (1987): Knowledge and Class: A Marxian Critique of Political Economy, University of Chicago Press, Chicago and London.

– (2002): Class Theory and History: Capitalism and Communism in the

USSR, Routledge, New York. Wolff, R (2002): ‘A Critique of Exploitation’, Dogma.

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