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ANNUAL SURVEY OF INDUSTRIES, 2001-02 VOL. II : REPORT ON , ABSENTEEISM LABOUR TURNOVER, EMPLOYMENT AND LABOUR COST IN SAMPLE SECTOR |
CHAPTER-V
LABOUR COST
Labour cost is one of the
significant factors for studying the economic viability of any industrial
activity for an entrepreneur before venturing into the industrial field.
It helps in reliable costing, wage fixation on a realistic basis, logical
collective bargaining, evolving implementation and evaluation of welfare
measures, study of trends in labour cost over a period of time, location of an
industry, etc. Labour Cost
data are also important for wage policy formulation at the national and regional
levels. With this objective in
view, data on various aspects of labour cost are collected every year, which
inter-alia, include the expenses incurred by the industrial establishments on
wages/salaries, bonus, contributions to provident & other funds and staff
welfare expenses in respect of all category of workers employed directly as well
as through contractors. The
aggregate of all these components gives the total labour cost.
When used in conjunction with the number of mandays worked, it gives the
average labour cost per manday worked.
5.1
Average
Labour Cost
State-wise and Industry-wise
data on average labour cost per manday worked by category of workers during the
year 2001-02 are given in Tables 5.1.1 and 5.1.2, respectively.
These Tables reveal that at all India level; average labour cost per
manday worked in respect of all the workers was Rs. 129.94.
Amongst directly employed workers, the average labour cost per manday
worked for men was Rs. 145.58, while for women it was just Rs. 88.24.
Average labour cost per manday worked for children was reported as Rs.
26.83 only. For workers employed through contractors, the average labour cost
per manday worked was Rs. 106.86. In
Public Sector units, average labour cost per manday worked was Rs. 233.10 as
compared to Rs. 127.67 in the Private Sector and Rs. 208.65 in the Joint Sector.
5.2
Average
Labour Cost by States
Table 5.1.1 reveals that
highest average labour cost per manday worked in respect of all workers was
reported at Rs. 185.83 in Delhi, followed by Rs. 180.72 in Maharashtra and Rs.
160.19 in Goa. On the other hand,
the lowest average labour cost per manday worked was reported at Rs. 66.13 in
Bihar, followed by Rs. 70.93 in Assam and Rs. 72.32 in Orissa.
Among women workers, the highest average labour cost per manday worked
was reported in Delhi at Rs. 172.49, whereas the lowest average labour cost per
manday worked was reported in Orissa at Rs. 54.67 only.
Among children, the highest and the lowest average labour cost per manday
worked was reported in Karnataka (Rs. 79.88) and Assam (Rs. 23.93),
respectively.
In three States of Uttaranchal,
Haryana and Uttar Pradesh, the average labour cost per manday worked in respect
of women workers was reported higher than that of their male counterparts. The
reason for more average labour cost on woman workers in these states may be
either due to some arrears payment to these workers during the current financial
year or employment of majority of women workers in more skilled jobs in some of
the industries in these states.
5.3
Average
Labour Cost by Industries
Analysis of Table 5.1.2
reveals that in respect of all workers, the highest average labour cost per
manday worked was reported at Rs. 415.52 in the industry group
'353–Manufacture of aircraft and spacecraft‘, whereas, the lowest average
labour cost per manday worked was reported in industry group '371-Recycling of
metal waste and scrap’ at Rs. 52.01 only.
Among woman workers, the highest and lowest average labour cost per
manday were reported in industry groups ‘232-Manufacture of refined petroleum
products' (Rs. 507.32) and '201-Saw milling and planning of wood’ (Rs. 47.85),
respectively. Among children, the
highest and lowest average labour cost per manday worked were reported in
industry groups ‘400-Miscellaneous industry group' (Rs. 79.88) and
'154–Manufacture of other food products‘ (Rs. 23.93), respectively.
Atleast in seven industry
groups, viz., 232, 271, 293, 333, 351, 352 and 359, the average labour cost per
mandays worked in respect of women workers was higher than that of their male
counterparts. The reason for more average labour cost on women workers may be
either due to some arrears payment to these workers during the current financial
year or employment of majority of women workers in more skilled jobs in these
industries.
5.4
Composition
of Labour Cost by Components
5.4.1 Wages/Salaries as Component of Labour Cost
State-wise and Industry-wise
statistics on wages/salaries per manday worked are presented in Tables 5.2.1 and
5.2.2, respectively. These Tables
reveal that at all India level, average labour cost per manday worked on
wages/salaries for all workers combined was reported at Rs. 105.03. At all India
level, labour cost on wages/salaries by category of workers was reported at Rs.
115.42 for men, Rs. 70.00 for women, Rs. 22.16 for children and Rs. 94.27 for
contract workers.
Amongst States, the highest
wages/salaries per manday worked for all workers was reported in Delhi at Rs.
142.64, followed by Maharashtra at Rs. 142.61. Among woman workers, the highest
and lowest wages/salaries paid per manday worked were reported in Uttaranchal (Rs.
141.37) and Assam (Rs. 42.94), respectively.
Among Industries, the highest
and lowest wages/salaries paid per manday worked to all workers were reported in
industry groups ‘353–Manufacture of aircraft and spacecraft‘ (Rs. 356.40)
and ‘371-Recycling of metal waste and scrap’ (Rs. 48.84), respectively.
Among women workers, the highest and lowest wage/salary per manday worked
were observed in industry groups ‘232-Manufacture of refined petroleum
products’ (Rs. 327.94) and ‘201-Saw milling and planning of wood' (Rs.
38.99), respectively.
5.4.2
Bonus
as Component of Labour Cost
State-wise and Industries-wise
statistics on bonus paid per manday worked during the year 2001-02, are
presented in Tables 5.3.1 and 5.3.2, respectively. These Tables show that at all India level, average amount of
bonus paid per manday worked for all workers was Rs. 9.21.
Among States, the highest amount of bonus paid per manday worked to all
workers was reported at Rs. 13.93 in Delhi, followed by Rs. 13.48 in Maharashtra
and Rs. 12.68 in Goa. The lowest amount of bonus paid per manday worked to all
workers was reported at Rs. 4.76 in Orissa, followed by Rs. 4.80 in Bihar and Rs.
4.94 in Andhra Pradesh.
Amongst different category of
workers, the average amount of bonus paid per manday worked was reported to be
at Rs. 11.33 paid to male workers, Rs. 7.41 to women workers, Rs. 6.22 to
contract workers and Rs. 2.37 to child workers.
Among contract workers, the
highest amount of bonus paid per manday worked was reported to be at Rs. 9.17 in
Assam, whereas, no bonus was paid to these workers in Chandigarh and Goa.
The highest and lowest amount of bonus paid per manday worked to male
workers was reported at Rs. 16.48 in Maharashtra and Rs. 5.98 in Andhra Pradesh,
respectively. For women workers,
the highest amount of bonus paid per manday worked was reported at Rs. 13.48 in
Haryana and the lowest at Rs. 3.40 in Bihar.
In three States of Haryana, Rajasthan and Uttar Pradesh, the average
amount of bonus paid per manday worked to women workers was higher than that of
their male counterparts.
Among
Industries, the highest and lowest amount of bonus paid per manday worked to all
workers was reported in industry groups '353-Manufacture of aircraft and
spacecraft‘ (Rs. 27.48) and ‘182-Dressing and dyeing of fur, manufacture of
articles of fur' (Rs. 0.41), respectively.
Among contract workers, the highest amount of bonus paid per manday
worked was reported at Rs. 26.64 in industry group ‘351-Building and repair of
ships & boats’ and the lowest at Rs. 1.77 in the industry group
'361-Manufacture of furniture'. Among
directly employed women workers, the highest amount of bonus paid per manday
worked was recorded as Rs. 38.02 in industry group ‘232-Manufacture of refined
petroleum products' and the lowest at Rs. 3.73 in the industry group
'182-Dressing and dyeing of fur, manufacture of articles of fur'.
Atleast
in 8 industry groups, viz., 232, 243, 271, 273, 300, 332, 351 and 359, women
workers were paid higher amount of bonus per manday worked as compared to their
male counterparts.
5.4.3 Contributions to Provident and other funds as Component of
Labour
Cost
State-wise and Industry-wise
statistics on contributions to provident funds and other funds made by employers
for their employees are presented in Tables 5.4.1 and 5.4.2, respectively.
It is observed that at the all India level, employers contributed Rs.
13.30 per manday worked for all workers towards provident and other funds.
For men, women, child and contract workers, such contribution was Rs.
15.84, Rs. 8.58 and Rs. 3.60 and Rs. 8.82, respectively. Among Sectors,
contribution towards provident and other funds per manday worked was Rs. 28.09
in Public Sector, Rs. 32.64 in Joint Sector and Rs. 12.86 in Private Sector.
Table 5.4.1 reveals that among
states, the highest and lowest contribution towards provident and other funds
per manday worked by all workers was reported in West Bengal (Rs. 22.46) and
Jammu & Kashmir (Rs. 5.00), respectively.
Analysis of Table 5.4.2 reveals that the
highest and lowest contribution towards provident and other funds per manday
worked by all workers was made by employers in industry groups
‘333-Manufacture of watches and clocks' (Rs. 44.98) and ‘371-Recycling of
metal waste and scrap’ (Rs. 2.67), respectively.
5.4.4
Welfare
Expenses as Component of Labour Cost
State-wise and Industry-wise
statistics on expenses incurred by employers on the welfare of their workers
during the year 2001-02 are presented in Tables 5.5.1 and 5.5.2, respectively.
The Table 5.5.1 reveals
that at all India level, on an average Rs. 7.99 per manday worked were spent by
the employers on providing welfare facilities to all workers.
Among States, the highest amount on the welfare of their workers was
spent by employers in Goa at the rate of Rs. 12.01 per manday worked, whereas,
the lowest amount of Rs. 2.26 was spent on this account in Bihar.
Among contract workers, the highest amount per manday worked on welfare
of the workers was spent in Dadar & Nagar Haveli at the rate of Rs. 10.33,
whereas the lowest welfare expenses per manday worked were incurred in
Chandigarh at the rate of Rs. 0.55.
Table 5.5.2 reveals that the
highest amount of Rs. 40.78 per manday worked was spent on providing welfare
facilities by the employers in industry group '232-Manufacture of refined
petroleum products‘, followed by Rs. 32.74 in industry group
‘333-Manufacture of watches and clocks’ in respect of all workers. Employers
spent the lowest amount of Rs. 1.77 per manday worked on welfare expenses in
industry group ‘014-Agriculture and animal husbandry service activities,
except veterinary activities’.
5.5 Percentage of Different Components of Labour Cost to Total Labour Cost
State-wise and Industry-wise
statistics on percentage of various components of Labour Cost, viz., (i)
wages/salaries; (ii) bonus; (iii) contribution to provided and other funds, and
(iv) staff welfare expenses to total labour cost has been depicted in Tables
5.6.1 and 5.6.2, respectively.
At all India level, the percentage share of different
components of labour cost to total labour cost on wages/salaries, bonus,
provident & other funds and
staff welfare expenses was 80.82 percent, 5.54 percent, 8.46 percent and 5.18
percent, respectively.
Among States the share of
wages/salaries in the labour cost varied between a highest of 89.89 percent in
Bihar and a lowest of 73.14 percent in West Bengal. Contribution of bonus to total labour cost ranged between a
highest of 7.16 percent in Kerala and the lowest of 2.96 percent in Andhra
Pradesh. Contribution to provident
and other funds in total labour cost was highest at 15.93 percent in West Bengal
and lowest at 4.00 percent in Jammu & Kashmir. The highest and lowest percentage on staff welfare expenses
as component of labour cost were reported in Dadar & Nagar Haveli (8.15
percent) and Chhattisgarh (1.69 percent), respectively.
Among industries, the
percentage of wages/salaries to the total labour cost was the highest at 93.90
percent in the industry group '371-Recycling of metal waste and scrap', followed
by 92.50 percent in the industry group ‘014-Agriculture and animal husbandry
service activities, except veterinary activities'.
The percentage contribution of bonus in the total labour cost ranged
between the highest of 8.60 percent in industry group ‘191-Tanning and
dressing of leather, manufacture of luggage handbags, saddlery and harness’
and the lowest of 0.43 percent in industry group ‘182-Dressing and dyeing of
fur, manufacture of articles of fur'. The
industry group '371-Recycling of metal waste and scrap' did not pay any bonus to
its workers. The percentage
contributions of provident and other funds to total labour cost was highest at
16.62 percent in industry group ‘291-Manufacture of general purpose
machinery‘ and lowest at 1.28 percent in industry group ‘371-Recycling of
metal waste and scrap'. The
percentage share of staff welfare expenses in total labour cost varied between a
highest of 10.99 percent in industry group ‘314-Manufacture of accumulators,
primary cells and primary batteries' and a lowest of 1.10 percent in industry
group '014-Agricultural and animal husbandry service activities, except
veterinary activities’.
5.6
Percentage
of Labour Cost to Total Cost of Production
Labour cost is one of the main
components of the total cost of production for any industrial establishment.
The percentage of labour cost on workers to total cost of production
indicates the share of the labour in industrial sector in a country.
In the changing scenario of world economy in terms of liberalization,
privatization, globalization and modernization, the percentage share of labour
cost to total cost of production is bound to change over a period of time.
The time series data on the percentage of labour cost to total cost of
production may be of immense use in overall economic planning and framing labour
policies and programmes. With this
aim in view, the data on percentage share of labour cost to total cost of
production by States, Industries and Sectors have been presented in Tables 5.7.l
and 5.7.2, respectively.
The Table 5.7.1 reveals that
at all India level, labour cost constituted just 3.18 percent of the total cost
of production during the year 2001-02 in Sample Sector. The percentage of labour cost to total cost of production was
4.61 percent in Public Sector, 3.38 percent in Joint Sector and 3.16 percent in
Private Sector.
Among States, the highest
percentage of labour cost to total cost of production was reported in south
Indian states of Kerala (4.74 percent), followed by Tamil Nadu (4.69 percent)
and Karnataka (4.46 percent). The
lowest percentage of labour cost to total cost of production at 1.22 percent was
reported in Dadra and Nagar Haveli.
In Public Sector, the
percentage of labour cost to total cost of production varied between a lowest of
0.32 percent in Dadar & Nagar Haveli and a highest of 25.62 percent in
Gujarat. In Joint Sector, the
percentage of labour cost to total cost of production varied between a lowest of
0.73 percent in Bihar and a highest of 94.66 percent in Chandigarh.
In Private Sector, the percentage of labour cost to total cost of
production varied between a lowest of 1.22 percent in Dadra & Nagar Haveli
and a highest of 4.64 percent in Tamil Nadu.
Industry-wise and Sector-wise
percentage of labour cost to total cost of production is presented in Table
5.7.2. It may be seen from
the Table that the highest percentage of labour cost to total cost of production
was recorded at 23.57 percent in industry group ‘333-Manufacture of watches
and clocks', whereas, the lowest percentage of such cost was reported in
industry group '371–Recycling of metal waste and scrap‘ at 0.35 percent.
In Public Sector, the percentage of labour cost to total cost of production varied between a lowest of 1.67 percent in industry group ‘232-Manufacture of refined petroleum Products’ and a highest of 62.41 percent in industry group ‘191-Tanning and dressing of leather, manufacture of luggage handbags, saddlery & harness’. In Joint Sector, the percentage of labour cost to total cost of production varied between a lowest of 0.33 percent in industry group ‘343-Manufacture of parts and accessories for motor vehicles and their engines' and a highest of 80.81 percent in industry group '312-Manufacture of electricity distribution and control apparatus'. In Private Sector, the percentage of labour cost to total cost of production varied between a lowest of 0.35 percent in industry group '371–Recycling of metal waste and scrap‘ and a highest of 23.46 percent in industry group '333-Manufacture of watches and clocks’.