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Contract labour act in India: a pragmatic view

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  • Meenakshi Rajeev

Abstract

In order to surpass the stringent regulations, the industry sector in India is largely resorting to contract labourers, who are governed by an Act. A primary survey carried out in an industrially developed state in India, reveals that several stipulations made in the Act are not followed. The workers felt that collusive agreement between the labour inspector, and the entrepreneur (or the contractor) has aided the violation of law. We consider a game theoretic model of Marjit, Rajeev and Mukherjee (2000) to show why such an act is optimal and examine whether any provision of reward for the inspector independent of fines collected by him would help to protect the law.

Suggested Citation

  • Meenakshi Rajeev, 2010. "Contract labour act in India: a pragmatic view," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 3(3), pages 237-252.
    • Handle: RePEc:ids:ijepee:v:3:y:2010:i:3:p:237-252
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    1. 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.
    2. 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.
    3. 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.
    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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