A peek into India’s Labour Situation

There is always an inertia when you deal with age old industries like manufacturing. You got to deal with inefficient systems and unions. Even though we live in a rapidly changing world where everything seems to be getting integrated with the optical fibre network / internet, bringing about change in the manufacturing industry will be slow. One way to bring about change is to hire change makers and grooming change makers in this industry. The labour coming into manufacturing have to get skills in many more domains than just being fitters, assemblers and lathe operators. The ITI’s which are a standard entry point of workers into the manufacturing shop floor need to get as much attention from the government as perhaps IIT’s and IIM’s are getting. India is no doubt producing excellent engineers to run the manufacturing plants but its best to seek to bring about change at the lowest level, and that means we need to upgrade our massive network of as many as 6000 registered ITI’s.

Here are some facts about the labour in India which will act as eye openers and assist foreign investors thinking of investing in India to take informed decisions.

The average overall age of India is 26. The working age is 15-60 years and almost 70% of India’s population are in the working age group of 15-60 making it one of the youngest country in the world. The agricultural growth rate is flat and very less compared to the industrial growth rate. This is resulting in agricultural labourers seeking opportunities in manufacturing industry. There is a need to have in house training for workers to groom their skills.

A manufacturing plant has 3 types of hierarchy in general.

1. Engineers / Managers
2. Workers (Varying skill set and experience)
3. Helpers (Unskilled and required for assisting workers)

Almost everyone in the hierarchy can understand English though people in the bottom of the hierarchy may not be able to speak English. The cost of labour in India is quite low for foreign manufacturers thinking of establishing units in India. But the adaptability of labour to new technology and automation may not be good. So, there is a need to weigh the pros and cons of cheap labour according to the context. With India being a vast country there is also a need to evaluate the culture of different regions and languages before taking decisions.

I am working on a detailed report on the labour situation in India which deals with things like educational background of workers, cultural problems, unions, strikes, lockouts, disputes, working hours and general managerial viewpoints. Just send me an email to rahulkaap@gmail.com mentioning your name, organization and background and I will send you the report absolutely free of cost.