ABSTRACT
This chapter looks at the changing structure of labour utilization in agriculture and industry and the rise of flexible specialization in the handicraft industries and in modern manufacturing. Labour legislation between independence in 1947 and the late 1980s inhibited growth, not least causing confusion to employers, some of whom moved abroad. The Contract Labour Act 1971 sought the gradual abolition of casual labour through regulation. With liberalization in the 1980s, labour-intensive industries faced severe competition from China. The body of labour laws had sought to engage with globalization. The two most powerful forces affecting Indian labour after 1990 were an emphasis on market-led employment and the abandonment of full employment and labour security and welfare. In India, agriculture and labour-intensive industry remained main features throughout the colonial period and into the post-independence period. Dualism in Indian manufacturing, both formal and informal, and the maintenance of a large labour force, explains the persistence of low productivity.
