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Contract Labour Act in India: A Pragmatic View

Author

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  • Meenakshi Rajeev

    (Institute for social and Economic Change)

Abstract

In order to surpass the stringent labour regulations, the industry sector in India is largely resorting to contract labourers, who are governed by the "Contract Labour Regulation and Abolition Act of 1970". A primary survey carried out in Karnataka reveals that many of the stipulations made in the Act to safeguard contract labourers are not followed in practice. It has also been felt by the workers that collusive agreement between the labour inspector, the protector of law, and the principal employer (or the contractor) has aided the violation of law. This paper discusses some of the survey findings and formulates a game theoretic model to show why it is economically optimal to collude. It also examines theoretically whether any provision of reward for the labour inspector would help to protect the law.

Suggested Citation

  • Meenakshi Rajeev, 2006. "Contract Labour Act in India: A Pragmatic View," Working Papers 175, Institute for Social and Economic Change, Bangalore.
    • Handle: RePEc:sch:wpaper:175
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    References listed on IDEAS

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    1. Basu, Kaushik & Bhattacharya, Sudipto & Mishra, Ajit, 1992. "Notes on bribery and the control of corruption," Journal of Public Economics, Elsevier, vol. 48(3), pages 349-359, August.
    2. Mookherjee, Dilip & Png, I P L, 1992. "Monitoring vis-a-vis Investigation in Enforcement of Law," American Economic Review, American Economic Association, vol. 82(3), pages 556-565, June.
    3. Timothy Besley & Robin Burgess, 2004. "Can Labor Regulation Hinder Economic Performance? Evidence from India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 91-134.
    4. Marjit, Sugata & Rajeev, Meenakshi & Mukherjee, Diganta, 2000. "Incomplete information as a deterrent to crime," European Journal of Political Economy, Elsevier, vol. 16(4), pages 763-773, November.
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    Cited by:

    1. Daniel Schwab, 2020. "Labor protection laws and the drain on productivity: Evidence from India," Review of Development Economics, Wiley Blackwell, vol. 24(2), pages 383-401, May.
    2. Basu, Arnab K. & Chau, Nancy H. & Soundararajan, Vidhya, 2019. "Wage fairness in a subcontracted labor market," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 24-42.
    3. Shyam Sundar, K.R., 2011. "Non-regular workers in India : social dialogue and organizational and bargaining strategies and practices," ILO Working Papers 994665563402676, International Labour Organization.
    4. Radhicka Kapoor & P. P. Krishnapriya, 2019. "Explaining the contractualisation of India’s workforce," Working Papers id:12998, eSocialSciences.
    5. repec:ilo:ilowps:466556 is not listed on IDEAS
    6. Daniel Schwab, 2019. "Labor protection laws and the drain on productivity: Evidence from India," Working Papers 1906, College of the Holy Cross, Department of Economics.
    7. Radhicka Kapoor & P P Krishnapriya, 2019. "Explaining the contractualisation of India's workforce," Indian Council for Research on International Economic Relations (ICRIER) Working Paper 369, Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India.

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