Dossier People’s struggles on Urban and Energy related issues

Informal Labour and Dynamics of the Construction Sector in India

, by Intercultural Resources , VERMA Praveen

According to India’s National Commission for Enterprises in the Unorganized Sector, over 92% of India’s labour force was employed in the informal economy in 2007, and this number has been consistently increasing. This implies that more than 92% of the Indian labour force is exposed to job and income insecurity, exploitation, violation of rights and absence of effective legal protection. The construction industry is the single biggest non-agricultural industry in the capitalist world. Construction workers are, however, treated largely as second-class citizens, deprived of means to protect their dignity.

The construction sector in India is a developing sector, and in the last five decades it has witnessed a boom, especially in big cities such as Delhi, Mumbai, Chennai, and Bangalore. Moreover, according to the National Sample Industry Organization, the growth of employment in the sector has been noteworthy; it is considered one of the most important industries for national development in Asia. A focus on the construction sector brings into the picture certain key issues related to work conditions, recruitment patterns, migration, and cycles of exploitation.

The construction sector is peculiar because it offers an example of the intermingling of formal and informal relations in the economy. For example, medium to large-scale projects require legal procedures – such as tenders from the government, legal contracts and monitoring – but at the same time employ labour on a completely casual basis. This intermingling is institutionalized within public works in a manner that retains the facade of formality and at the same time perpetuates informality.

In big cities, one comes across two kinds of labour recruitment: one for medium to large-scale projects through a long chain of middlemen, and another through labour chowks (literally, “roadside squares,” where labourers gather in the morning to be hired for various projects), which fulfill the need for small construction sites. This article deals with these two different practices of labour recruitment in the construction sector in Delhi, India’s capital. The case studies for big worksites were done in Delhi School of Economics (DSE) and Jawaharlal Nehru University (JNU); for small worksites, I chose three labour chowks in different areas in Delhi.

Labour Recruitment and Conditions at Big Worksites

Most big projects are alloted to private construction companies by the government’s Public Works Department. These big construction companies or contractors further sub-contract work to small contractors. Sometimes, one finds many small contractors at the same worksite. To find labourers for the big sites is quite difficult, and these contractors are dependent on middlemen. These middlemen work to find labourers for construction sites, and most of the time they find labourers from their own village, district or state. The middleman, therefore, becomes quite an important figure; he helps his fellow villagers find work in the city, and he helps the contractor get access to cheap labor, while collecting commissions from both groups.

Groups of workers are transported directly to the worksites in big groups from states where the cost of labour power is lower. The labourers are in dire need of employment and ready to enter into all sorts of exploitative agreements with contractors. It often happens that this migrant labour force, after finishing work at one construction site, stays and tries to get more work.

At the two worksites I studied, most of the labourers came from the central Indian states of Madhya Pradesh and Chattisgarh with a middleman from the same district. These labourers are on the move constantly. Because of this insecurity, the labourers are seen as a compliant and disciplined workforce. Although the violation of basic norms and labour laws is very obvious, measures to protect the workers are rarely taken.

The labourers are divided into three categories: unskilled, skilled and specialized. The majority of the labourers here are ‘unskilled’ and help in masonry work. The skilled labourers are masons and have higher status in this hierarchy. The specialized labourers are the ones doing tasks such as flooring, road construction and marble work for beautification.

The majority of the workers are male, but sometimes entire families work together. Children below the age of 18 often work on construction sites to share the burden of the family’s work. Almost all the workforce at these two sites belonged to lower castes, and all live in precarious conditions. The makeshift houses they build for themselves adjacent to the worksite have no basic amenities, and all the labourers share two toilets and have to fetch the drinking water from outside. During the extreme summers and winters it becomes very hard to survive.

None of the workers here are registered with the Labour Commission, and therefore they do not have any legal entitlements. They cannot claim anything in case of injuries at the worksite. When one labourer died during working hours, the contractor only paid a small amount of money to his family for the cremation rituals.

These sites contained several co-existing agreements and hierarchies. There was a mix of many kinds of labourers, and most were confused about the hierarchy above them. Some were directly working for the company, though recruited through a middleman, and others worked at the same site but under petty contractors. Worksites were also divided into a few sub-worksites under various contractors. This transfer of power from chief contractor to petty contractor was confusing for the labourers, and due to this they had enormous difficulty at the time of payment.

All the labourers declared themselves to be absolutely free to leave whenever they wanted to, but their relationship with the employer was not so simple. The payment dynamics were so complicated that no labourer could easily leave. This bondage was achieved through a system in which the employer always held back ten days of wages from every labourer. This was also forced through the ‘virtual advance’ (a weekly payment given by the employer to all the labourers, which was called an advance by the employer as well as labourers). After work for a week, most of the labourers received 500 rupees each, and they considered this as an advance. What this practically meant was that, at end of the month, the labourer would receive no more than 400-500 rupees.

The labourers, however, had no complaints about payments and declared that they had always received their money. Some of the workers lamented that the rate was too low, but most of the workers who had a longstanding relationship with the company valued the ‘timely’ and secure payment and the stability of the employment. While aware of the fact that the minimum wages are much higher than what they receive, the labourers maintained that their priority was to get regular and stable work. This long-lasting relationship with contractor works without any written or legal contract.

The site engineer declared that all the labourers residing at the work site were regular labourers and worked directly under the company, receiving the minimum wage. But contrary to his claims, he was not able to provide any list of labourers, and was not even aware of the minimum wage in the state. Dealing with labourers is a burden left to the lowest rung of subcontractors, and no one higher up in the chain takes any responsibility for their conditions. In the worksites I analysed, the labourers have no clear understanding of who they work for, and the management does not know who its labourers are. The chain of intermediaries is therefore a crucial one that enables the execution of the project.

This migrant workforce has different characteristics and enters at different levels of the subcontracting chains. They are always on the move from one worksite to another, linked with the same middlemen until they are able to build their own networks and acquire new skills. The middleman is usually hand in glove with big contractors who are always looking for a new group of people because the older groups start to learn the dynamics of the sector or discover how to earn a livelihood for themselves. Thus, to keep the chain of exploitation strong, there is a constant need for new labouring hands. New migrants cannot easily access the labour market unless they are coming through the exploitative channels run by middlemen.

Sagas from Small Construction Sites

The second part of this article will trace the experiences of labour from a different departing point. Labour chowks (LC henceforth) are quite familiar in cities like Delhi, as they form a major part of the daily wage labour landscape. Most of these LCs draw different kinds of labourers, including unskilled workers, skilled workers, experts on masonry or carpentry and so on. Almost all the labourers hired from LCs works in small private construction sites. The task is also different for different sites; common jobs include breaking down old houses, small renovation projects, and building new houses.

The stories and experiences of the labourers located in these sites are quite different from big construction sites. In interviews, most of the labourers showed their unwillingness to work at big worksites, as their work through LCs earns them higher daily wages and the freedom to choose work accordingly. The labour recruitment system on big worksites is so tight that once you leave the site, it is very difficult to get work again independently. Labourers at LCs receive more money; the average daily wage of unskilled workers is around 150 to 200 rupees a day, compared to a maximum of 85 to 100 rupees a day for similar work on a big public project.

Occupational multiplicity is a common characteristic of labourers at LCs. Many of the labourers switch from construction work to other jobs like pulling rickshaws; often their relatives earn their livelihoods in different ways in Delhi, such as selling coconuts on the road or working at phone booths, repair shops or small restaurants.

The mobility of the labourers at LCs is much more than at big sites. Also, their personal linkages with potential employers in the city are much stronger than those of big-site workers. Labourers at big construction sites rarely find the time to go back home, and they travel mostly during festivals and return to their site soon after that. In contrast, labourers at the LCs are much more mobile and frequently visit their homes. Some of the unskilled labourers also reported that they could become skilled labourers more quickly with the help of fellow villagers who stood with them at LCs, as opposed to the situation in big sites, where it is harder to move up the ladder.

Most of the labourers at LCs are from the states of Bihar and Uttar Pradesh, and often all the labourers who stand at a particular LC are from neighboring districts. They have a strong network of ‘friendship’ with others, but they also compete amongst themselves in the same market conditions. All the labourers at the LCs are divided into groups, and they often try to take up work together. When more labourers are required for work, labourers draw on their ‘ties’ or ‘friendships’, but not at the cost of their own employment. Most of the time, all the labourers have linkages to each other in one way or another, whether it is friendship from work, or family, caste or village ties.

All the labourers here have some knowledge of the construction industry in Delhi and also understand market mechanisms. For example, if there is not much need for construction labour, they can easily switch to other kinds of work. This kind of confidence does not come simply from the working condition that emerged in the market, but also from the extended network they have in Delhi.

It is striking that there were no female labourers standing in any of the LCs, in sharp contrast to the big work sites. Most of the labourers standing on the LCs come to the city alone. Their mobility also pushes them not to keep their family in the city.

Their perception about work on big projects is that there is always more work and less pay. The contractors do not pay the labourers sufficient money to survive. Delay in payment is another key issue these labourers identify with big construction sites. Some of the skilled labourers at LCs shared their reasons for working through LCs. When they first came to Delhi, they used to work as unskilled labourers with someone they did not know. This did not allow them to bypass these intermediaries so as to enhance their skills. Once they caught on to the market mechanisms, they shifted to the LCs. Gradually, with help from their fellow labourers, they acquired the skills required in different kinds of work. Had they stayed on at big construction sites, they would have been working at the same rate they used to work as unskilled labourers.

However, this doorway to LCs is not so easy for every labourer; this space is simply not open to all labourers. New labourers are quite skeptical about the market and initially want to stick with a middleman or their fellow mates for security and stability.


In both cases, we can see the regularization of ‘irregularity’ but through different means, as the agency of labourers is manifested differently. While labourers working in small private projects would seemingly be more exploited, this study shows that they retain a degree of agency and mobility that cannot be neglected. On the other hand, we see the bondage of labour in big sites, often part of the public sector, which is seemingly more legal, regulated and standardized. This study of two kinds of labour relations within the construction sector shows that this sector is not homogeneous in nature, but is ridden with complexities and layers of networks, linkages and hierarchies.