Inclusive Growth and Institutions: An Analysis of the Employment Structure of India's Tea Plantation Sector

Abstract

It is generally held that though the Indian economy has been experiencing high growth in the post-reform period, it is not inclusive and that certain sectors, regions and population of the country are being excluded from the benefits of growth. Studies have argued that innovation and institutions matter in growth; if growth has to be inclusive, the system that facilitates growth also needs to be inclusive. In this context this paper attempts to examine the structure of employment in tea plantations in terms of employment, wages and earnings and therein understand the role of the Plantation Labour Act (PLA), 1951 in fostering inclusive growth. The analysis showed that the employment performance of the tea plantations in terms of quantity of employment has been sluggish and there has been increased casualization of the workforce. The analysis of the wage structure of plantation workers shows that the growth rate of the real wages and earnings of the workers has remained more or less stagnant in recent years. Further, an increased use of piece-rated women workers, whose wages were lower than the time-rated workers, was observed. These findings question the effectiveness of the PLA in promoting workers' welfare.