Bonded Labour in India – A Form of Modern Day Slavery

        

India is a labour-surplus economy – with an unlimited number of workers willing to work at a subsistence wage – a paradoxical feature of the labour market is the rising incidence of scarcity or shortages amid a situation of potential plenty.  Labour law reform has been in debate since several decades but this has come onto the political agenda in India by the results of the 16^th General Election. it is commonly being argued that the reform is intended to address the problem of labour market rigidities and ensure a smooth economic investment growth by removing the unnecessary obstacles.

Bonded labour is the most prevalent form of modern slavery in India today, despite being outlawed. Individuals and families, including children, are exploited in slave-like conditions to pay off debt. The lender, often a landowner or factory boss, uses numerous tactics to exploit this slave labour. The borrower is often forced to work at paltry wage levels to repay the debt. Exorbitant interest rates are charged (from 10% to more than 20% per month), and money lent for future medicine, clothes, or basic subsistence is added to the debt.

In most cases of bonded labour, up to half or more of the day’s wage is deducted for debt repayment, and further deductions are often made as penalties for breaking rules or poor work performance. The labourer uses what little income remains to buy food and supplies from the lender, at heavily inflated prices. They rarely have enough money to live on, so they are forced to borrow more money to survive. Any illness or injury, often due to the appalling conditions in which they work, spells disaster. More money must be borrowed not only for medicine but also because the injured individuals cannot work, meaning the family is not earning enough to survive.

Sometimes the debts last a few years, and sometimes (especially in agriculture) the debts are passed on to future generations. For those who do manage to pay off the debt, often their situation means that they need to borrow more money so they are perpetually in debt, albeit for a series of loans.