Labour Bureau
Government of India
R E P O R T 

ON EVALUATION STUDIES ON IMPLEMENTATION OF

THE MINIMUM WAGES ACT, 1948 

IN BIDI MAKING ESTABLISHMENTS IN
MADHYA PRADESH

CHAPTER- 1

INTRODUCTION

1.1  Genesis

1.1.1In a labour surplus economy like India where about 90 per cent of the labour force is engaged in the unorganized sector and are vulnerable to exploitation, minimum wages could not be left to be determined by the market forces of demand and supply as it could lead to fixation of low minimum wages. In order to protect the labour from exploitation in terms of payment of low wages in sweated employments, Government of India enacted the Minimum Wages Act, 1948. The implementation of the Act in various scheduled employments in different parts of the country, however, remained a cause of concern, which was also highlighted both by the National Commission on Labour (1969), and the National Commission on Agriculture (1976). It was observed that wages fixed under the Act were not revised for long periods, even though increases in the prices warranted it.

1.1.2Considering the dissatisfaction over the pace of implementation of the Act, the Government of India, Ministry of Labour entrusted Labour Bureau to conduct evaluation studies on the implementation of the Minimum Wages Act, 1948. The Scheme of Evaluation Studies on the Implementation of the Minimum Wages Act, 1948 was, accordingly, launched in June 1981. Initially, these studies was conducted in the employments in Agriculture in different States viz. Gujarat, Bihar, Karnataka, Rajasthan, Andhra Pradesh, Eastern Districts of Uttar Pradesh, Orissa, Kerala, Madhya Pradesh, Uttar Pradesh (except Eastern Districts), Meghalaya and West Bengal. Subsequently, the scope of the studies was extended to cover other scheduled employments also viz., ‘Bauxite Mines’ and ‘Building and Construction’ in the Central Sphere and ‘Tobacco (including Bidi Making) Manufactories’ in Uttar Pradesh, Maharashtra, Andhra Pradesh, Chhattisgarh and Karnataka and ‘Building and Construction’ in Delhi, Madhya Pradesh, Tamil Nadu and Maharashtra in the State Sphere. The Reports in respect of all the studies have since been released

1.1.3The present Study covers ‘Tobacco (including Bidi Making)’ Manufactories in the State of Madhya Pradesh, which does not include districts falling under the new State of Chhattisgarh. The Bidi Making Establishments fall under the Scheduled Employment ‘Tobacco (including Bidi Making)’ Manufactories’ originally included in Part I of the Schedule appended to the Minimum Wages Act, 1948 and the State Governments are the Appropriate Governments under the Act for fixation and revision of minimum wages.

1.2   Objectives

The main objectives of the Study were to assess:

(i)the extent to which the provisionsof the MinimumWages Act , 1948 have beenenforced,

(ii)theextent of awareness about the MinimumWages Act, 1948; the Bidi and CigarWorkers (Conditions ofEmployment) Act, 1966, and the EqualRemuneration Act, 1976 amongst the employers, Contractors and various categories of workers,

(iii)the levelof enforcement of licensing, record keeping and otherrelevant provisions of the Bidi and Cigar Workers (Conditions of Employment) Act, 1966,

(iv)level of compliance with theprescribed minimum wages; and

(v)the problems faced in theenforcement of the provisions of the Minimum Wages Act.

1.3    Concepts and Definitions

The important concepts and definitions of the Minimum Wages Act, 1948 and the Bidi and Cigar Workers (Conditions of Employment) Act, 1966 adopted for the purpose of the study are given below:

(i)Appropriate Government

(a)In relation to any Scheduled Employment carried on by or under the authority of the Central Government, by a Railway Administration or in relation to a mine, oil-field or major port or any corporation established by a Central Act, the Appropriate Government means the Central Government;

(b)In relation to any other Scheduled Employment the Appropriate Government means the State Government.

(ii)‘Establishment’ means any place or premises including the precincts thereof in which or in any part of which any manufacturing process connected with the making of bidi is being , or is ordinarily, carried on andincludes an industrial premises.

(iii)‘Industrial Premises’ means any place or any premises (not being a private dwelling house), including the precincts thereof, in which or any part of which any industry or manufacturing process connected with the making of bidi is being, or is ordinarily, carried on with or without the aid of power.

(iv)‘Employer’ means any person who employs, whether directly or through another person, on behalf of himself or any other person, one and more employees in any Scheduled Employment in respect of which the minimum rates of wages have been fixed under the Minimum Wages Act, 1948 by the Appropriate Government. 

(v)'Contractor' means a person who in relation to a manufacturing process, undertakes to produce the given results by executing the work through contract labour or who engages labour for any manufacturing process in a private dwelling house and includes a Sub-Contractor, Agent, Munshi, Thekedar or Sattedar. 

(vi)‘Contract Labour’ means any person engaged or employed in any premises by or through a Contractor, with or without the knowledge of the employer, in any manufacturing process.

(vii)‘Employee’means a person employed directly or through anyagency whether for wages or not, in any establishment to do any work, skilled, unskilled, manual or clerical and includes;

(a) any labour who is given raw material by an employer or a Contractor for making bidis at home(often referred to as a Home Worker); and

(b)any person not employed by an employeror a Contractor but working with the permission of or under anagreement with the employer or the Contractor.

(viii)‘Manufacturing Process’ means any process for or incidental to, making, finishing or packing or otherwise treating any article or substance with a view to its use, sale, transport, delivery or disposal as bidi.

(ix)Collection Centre’ means a branch or a part of an establishment set up by an employer or a Contractor for supplying the raw material to home workers and collecting the bidis rolled by them.

(x)‘Principal Employer’ means a person for whom or on whose behalf, the contract labour is engaged or employed in an establishment.

(xi)‘Private Dwelling House’ means a house in which persons engaged in the manufacture of bidis reside.

(xii)‘Bidi Roller’ means a worker who rolls bidis out of the material provided to him within the premises of the establishment or in his private dwelling.

(xiii)‘Other Workers’ means all the workers in the bidi industry other than the Bidi Rollers. These include Furnaceman, Labeller, Packer, Wrapper, Sorter, Checker, Tobacco Mixer, Driver, etc.

1.4   SCOPE AND COVERAGE

1.4.1The Scope of the Study extends to all the bidi making establishments falling under the Scheduled Employment ‘Tobacco (including Bidi Making)’ Manufactories in the State ofMadhya Pradesh.However, the actual coverage and collection of data was restricted to the sample employers, Contractors/Sattedars, Bidi Workers and Bidi Rollers. The Study was planned on the basis of the information made available by the Government of Madhya Pradesh on number of bidi making establishments covered under the Minimum Wages Act, 1948 and the bidi making establishments under the Bidi and Cigar Workers(Conditions of Employment) Act, 1966. The Department of Labour, Madhya Pradesh provided a district-wise list of bidi making manufactories showing their number as well as the number of workers employed therein.According to this list (Table 1.1), the number of bidi workers in the unified State (inclusive of Chhattisgarh) was reported as 1,40,575 (Rounded as 1.41 lakhs), far less than those reported, in the Annual Report of the Ministry of Labour for 2000-2001(i.e. 7,50,000).It was observed that the State Government had furnished the number of establishments licenced under the Bidi and Cigar Workers (Conditions of Employment) Act, 1966 and the number of workers employed by them which did not include the Bidi Rollers comprising about 90 per centof the workers in the industry. It also did not include a large number of Contractors, Sub-Contractors or Sattedars and unbranded bidi establishments who manage to function without the requisite licenses under the Bidi and Cigar Workers (Conditions of Employment) Act, 1966 although they are making a substantial contribution towards the production of bidis.

Table 1.1

Number of Bidi Workers in the unified State of Madhya Pradesh
 
S. No.
Name of District
No. of Establishments 
Approximate Numbers of Workers
1.
Indore
4
2481
2.
Burhanpur
8
5158
3.
Khargaon
1
226
4.
Bhopal
24
727
5.
Vidisha
6
257
6.
Hoshangabad
5
282
7.
Betul
3
61
8.
Gwalior
27
10051
9.
Gunna
13
2277
10.
Raipur (including Mahasmund)
16
4403
11.
Jagdalpur
8
2367
12.
Jabalpur
41
11101
13.
Balaghat
89
7614
14.
Katni
13
4280
15.
Bilaspur
7
179
16.
Raigarh
9
716
17.
Ujjain
1
14
18.
Devas
13
791
19.
Ratlam
12
86
20.
Sagar
133
48140
21.
Damoh
49
19661
22.
Chhatarpur
3
460
23.
Satna
27
15638
24.
Reewa
7
2031
25.
Shahdole
1
3
26.
Durg
1
687
27.
Rajanandgaon
9
884

Total

530
1,40,575

Source:-Labour Commissioner, Madhya Pradesh.

The Minimum Wages Act, 1948 does not provide for the registration of the establishments to which it applies.The enforcement effort is, therefore, usually directed towards the establishments registered under the Bidi and Cigar Workers(Conditions of Employment) Act, 1966 which provides for licensing of establishments and industrial premises engaged in the production of Bidi and Cigar.It will, therefore, be imperative to assess enforcement of the provisions of the Bidi and Cigar Workers (Conditions of Employment) Act, 1966 as they have a direct bearing on the implementation of the Minimum Wages Act, 1948.

1.5   METHDOLOGY

1.5.1  The information supplied by the State Government was utilised for making an assessment of the dispersal of bidi making establishments, for stratifying the bidi producing districts, in the State of Madhya Pradesh and for selecting the strata for the purpose of the study. In the first stage sampling, twelve districts were selected for the study viz. Sagar, Gwalior, Vidisha, Bhopal, Jabalpur, Satna, Balaghat, Hoshangabad, Indore, Ujjain, Devas and Datiya. The selected districts were grouped into five strata. Table 1.2 provides details of the names of districts comprising the five strata in the State, the number of bidi establishments and the number and proportion of workers employed.

Table 1.2

Number of Bidi Establishments and the Number of Workers 

Employed therein in the Selected Districts 

Strata
Name of the District 
No. of registered Establishments
No. of workers employed
Proportionof workers in the strata
Stratum I
Sagar
133
48140
49.5
Stratum II
Jabalpur and Satna
68
26739
27.5
Stratum III
Gwalior, Vidisha and Datiya
37
10501
10.8
Stratum IV
Balaghat
89
7614
7.8
Stratum V
Bhopal, Indore, Devas, Ujjain and Hoshangabad
47
4295
4.4
Total
370
97289
100.0

EXHIBIT 1 (A)

Number of Bidi Establishments and Number of Workers Employed


in the Selected Strata(Table 1.2)

EXHIBIT 1 (B)

Proportion of Workers in the Strata (Table 1.2)


1.5.2As the available list covered only 10 per cent of the total employment in the industry and excluded Contractors, Sub-Contractors and Sattedars, instead of systematic sampling, spot sampling of the establishments and employees in certain selected centres was done. In all, in the second stage sampling, 38 bidi establishments and 34 Contractors were covered in the selected districts.In each one of these bidi centres or clusters of bidi establishments, 10 percent of the bidi establishments were covered subject to a minimum of one and a maximum of three. In these establishments 10 per cent of the Contractors subject to a minimum of one and a maximum of three were covered together with 106 bidi workers, i.e., 10 per cent of the workers engaged on jobs like, baking, labelling, sorting, checking, wrapping etc., subject to a minimum of one and a maximum of three workers as the third stage samples.

1.5.3In all the districts covered by the Study the big establishments were getting the bidis rolled through home workers (Bidi Rollers) residing in clusters.As such 10 per cent of the Bidi Rollers (home workers) were covered subject to a minimum of five and a maximum of 10 in respect of each one of the sample establishment (Contractors, Sub-Contractors or Sattedars) covered by the Study.As many as 294 Bidi Rollers were covered by the Study.In view of the peculiar characteristics of the industry involving Contractors, smaller establishments with similar activities and home workers in large numbers, the sampling process had to take care of both availability and accessibility of the informants at all the three stages of sampling.The distribution of employers, Contractors, workers and Bidi Rollers covered during the study is given in Table 1.3.

TABLE 1.3

Distribution of Employees, Contractors and Workers Covered by the Study
 
Sl. No.
Number of Establishments Covered
Number ofWorkers Covered
District
Trade Mark
Contractors/ Sattedars
Total
Bidi Workers
Bidi Rollers
Total
1.
Sagar
10
14
24
30
101
131
2.
Jabalpur, Satna
8
12
20
28
64
92
3.
Gwalior, Datiya, and Vidisha
7
4
11
13
39
52
4.
Balaghat
3
4
7
9
20
29
5.
Bhopal, Indore, Devas, Ujjain and Hoshangabad
10
-
10
26
70
96
Total
38
34
72
106
294
400

The data collected has been compiled, analysed and presented given the limitations of conducting Studies in an unknown number of establishments and workers. The study gives a feel of the level and extent of the implementation of the Minimum Wages Act as well as the problems faced in its enforcement.

1.6   PILOT STUDY

1.6.1The pilot study was conducted in the bidi establishments in Indore, Ujjain, Sagar and Bhopal Districts of Madhya Pradesh State to test check and finalise schedules and questionnaires for conducting the main study.Information about enforcement procedure as well as the organisational set up of the enforcement authority was also collected.The study revealed that the system of engaging Contractors for getting the bidis rolled was in vogue in the bidi establishments in the State.A large number of Sattedars and middle men in the State of Madhya Pradesh were engaged in producing bidis for the Trade Mark Establishments. It was very difficult to locate such establishments and enforce the law. The names of the Sattedars existed on rolls of the Employers who brought the green bidis from far flung areas and deposited the same withthe Bidi Establishments. In addition there were other establishments running almost a parallel trade of getting the bidis rolled under the guise of exemption from Excise Duty for rolling less than 20 lakh bidis in a year. A large number of such centres producing un-branded bidis were functioning without licenses. The list of establishments covered under the Act supplied by the State Government was subject to these limitations. The discussions with the enforcement authorities and bidi manufacturers revealed that the list of the establishments and employment data made available by the State Labour Department was a gross under-estimate as the actual employment in the industry was much larger.The enforcement authorities are engaged in the task of identification and registration of Bidi Rollers (home workers) for extending the benefits of welfare schemes. A large number of unregistered workers and their dependants were found engaged in the manufacture of un-branded bidis.

1.7   MAIN STUDY

1.7.1  The Study was conducted in the districts of Sagar, Gwalior, Vidisha, Bhopal, Jabalpur, Satna, Balaghat, Hoshangabad, Indore, Ujjain, Devas and Datiya by the Field Officers of the Labour Bureau with the active co-operation of the Commissioner of Labour, Government of Madhya Pradesh and his Regional Officers.The field work involved collection of information through specially designed schedules and a close examination of enforcement procedure and the records maintained by the principal employers and Contractors.In all, four types of schedules were canvassed during the study, one each for the Employer, Contractor, Bidi Worker and Bidi Roller. In addition, two questionnaires were also designed for the enforcement officers. The schedules and questionnaires were canvassed in twelve districts falling under the five strata in different parts of the State. It was observed that the workers were employed on almost identical terms and conditions.By and large the bidi industry in the State was dominated by a couple of big trade mark establishments having several branches and collection centres scattered all over the State. It was decided to cover selected centres in all the bidi producing areas of the State with a small sample size at all stages to have a feel of the situation prevailing under different types of enforcement conditions.The big bidi manufacturers in all the centres covered by the study provided valuable information about the set-up of the industry in the State.The field study was conducted during April-May, 2001.
**** End of Chapter 1 *****