Labour Bureau
Government of India
R E P O R T

ONEVALUATION STUDIES ON IMPLEMENTATION OF

THE MINIMUM WAGES ACT, 1948 

IN BIDI MAKING ESTABLISHMENTS IN
MADHYA PRADESH

CHAPTER II

SPECIAL CHARACTERISTICS 

2.1   Introduction

2.1.1   Bidi making is an agro-forest based cottage industry solely dependent on Tendu Leaves and Tobacco. Plucking of tendu leaves, their collection, storage and distribution amongst the bidi manufacturers are handled by the State Department of Forests. The industry is highly labour intensive as entire manufacturing process is done manually requiring special skills. It falls both in the organised as well as in the unorganized sector. A large number of workers in the organised sector engaged in bidi rolling, sorting, checking, baking, labelling, wrapping and packing are covered under the Bidi and Cigar Workers (Conditions of Employment) Act, 1966.In the organised sector the bidi manufacturers are subject to Central Excise at the rate of Rs. 9/- (Excise Duty Rs. 4.60, Cess Rs. 2.00, Additional Duty Rs. 1.40 and National Calamity Fund Rs. 1.00) per 1000 bidis.

2.1.2   The small bidi manufacturers in the unorganized sector manufacturing upto 20 lakh bidis per annum are exempted from the excise duty. It is very difficult to locate and estimate the number of Bidi Rollers engaged by these small bidi manufactures. As a result the workers are deprived of the benefits of the various labour laws and escape the notice of the enforcement officers.

2.1.3   Trade Mark Establishments or Brand Establishments form the core of the bidi industry. They undertake functions like distribution of raw material, sorting, checking, baking, labelling, packing and marketing of bidis.The task of rolling bidis,which is the most labour intensive operation, is usually entrusted to home workers particularly females either directly by the Trade Mark Establishments or through the Contractors. In Madhya Pradesh all Trade Mark establishments had both types of home workers, viz., rolling bidis directly for them as well as for Contractors.They issued the raw material -tobacco, tendu leaves and thread - either to the directly employed home workers or through the Contractors periodically.The Contractors got the bidis rolled from the Bidi Rollers through a network of collection centres located in the clusters of Bidi Rollers’ dwellings.The Bidi Rollers were registered with the bidi establishments.It was observed that many Sattedars were getting the bidis rolled from villages but it was difficult to identify them as they did not have fixed spots for distribution of raw materials and collection of rolled bidis.The home workers were not even aware of the names and addresses of the middle men or Sattedars in most of the cases as the raw material was distributed to such rollers at their dwellings.The finished green bidis delivered to the Contractors by the Bidi Rollers were sorted, checked and the substandard bidis rejected.The Contractors were paid commission at the rate of Rs. 2.65 per 1000 bidis by the principal employer or the brand establishment.The green bidis were roasted and passed on to the workers for labelling, wrapping and packing.The establishments get the labelling and packing work done in their premises.The Bidi Rollers whether engaged directly or through Contractors constituted a majority of the employees in this industry.Normally, about 100 Bidi Rollers had to be engaged for rolling one lakh bidis in a day which fetched Rs. 9000/- to Rs. 10,000/- in the market.For rolling 1000 bidis each Bidi Roller was provided 575 to 700 grams of tendu leaves and 225 to 280 grams of tobacco depending on the quality of leaves and the size of bidi to be rolled. All the Bidi Rollers in Madhya Pradesh were home workers while the premises workers were engaged as Sorters, Checkers, Bakers, Labellers, Packers, Raw Material Distributors, Clerks, Managers, etc.The characteristics of the different types of employers and employees in the industry are briefly given below:

2.2   Types of Establishments

2.2.1   The bidi establishments covered under the Minimum Wages Act, 1948 include the establishments licensed under the Bidi and Cigar Workers (Conditions of Employment) Act, 1966 alongwith an unknown number of those functioning without the requisite licences.In addition, a large number of un-branded bidi establishments, functioning as bidi traders or green bidi manufacturers and operating within the excise exemption limit of 20 lakh bidis per annum (which does not require such licenses) are also covered under the Minimum Wages Act, 1948.The bidi industry involves a large number of middle-men working as Contractors, bidi traders or petty bidi manufacturers supplying green bidis to big manufacturers, the trade mark establishments or brand establishments or even their branches. Bidi establishments can be grouped under the following categories:

    Trade Mark Establishments or Brand Establishments
    Branches of the Brand Establishments

    Distribution/Collection Centres

    Contractors/Sattedars

    Un-branded Bidi Establishments

(i)   Trade Mark Establishments or Brand Establishments
These are the popular establishments of the industry with trade marks and requisite licences under the Bidi and Cigar Workers (Conditions of Employment) Act, 1966 and the Excise Laws.These establishments procure raw materials from different parts of the country, process them and distribute the same to their branches or Contractors for getting the bidis rolled. The other operations like sorting, checking, baking, labelling, packing and marketing, etc., are carried on either by the employers at these establishments or at their bigger branches. The big trade mark establishments have a large number of small and big branches spread-over even outside the State.In most of the establishments, bidi rolling is entrusted to the Contractors.However, in case of a couple of big establishments bidi rolling is also entrusted to the subsidiary establishments with their own net work of branches for getting the bidis rolled through Contractors.

(ii)   Branches of the Brand Establishments 

Bidi establishments have their depots at various places for direct transaction with the Contractors. Since bidi rolling is highly labour intensive activity dominated by home workers, the task of getting the bidis rolled through them is entrusted to the Contractors.The Contractors are engaged by the branches and depots of the trade mark establishments. They supply raw material and collect the green bidis and transport the same to the main industrial premises where these are baked, labelled, packed and marketed. However, in some cases, the branches of the big trade mark establishments supply the raw material, collect the green bidis and get them baked, labelled, packed and marketed directly on behalf of that Trade Mark establishment. To carry out these activities, they employ Managers, Accountants, Clerks, Furnacemen, Sorters, Checkers, Packers, etc.

(iii)  Distribution/Collection Centres

These Centres undertake the task of distribution of raw material to the home workers and collection of green bidis from them.They are usually located near the clusters of dwellings of the Bidi Rollers, for the mutual convenience of the Contractors and Bidi Rollers.The quantity of material supplied as well as the bidis deposited are entered in the log books provided to the Bidi Rollers for keeping record of the bidis rolled by them and for making payment of wages.

(iv)   Contractors/Sattedars

The Contractors are engaged either by the employers comprising of Trade Mark establishments or by their branches. The employers provide requisite quantities of raw material to the Contractors who undertake the task of getting the bidis rolled through the Bidi Rollers.The finished green bidis delivered by the Bidi Rollers are collected, checked and supplied to the Principal Employers.For this job the Contractors get a commission of Rs. 2.65 per thousand bidis. They form a link between the Principal Employers and the Bidi Rollers. The Contractors carry the raw material even to the door step of Bidi Rollers in the remote areas for getting the bidis rolled, collect the green bidis from them and then deliver the same to the Principal Employers.

The practice of getting bidis rolled through Contractors was in vogue in the entire State except in the case of two or three very small branded establishments where the bidis were rolled within the premises.The Bidi Rollers carried the tendu leaves to their houses for dampening and cutting to the size of bidi.Tobacco was supplied at the time of rolling within the premises.

(v)   Un-branded Bidi Establishments

The un-branded establishments were usually small in size and often operated without the requisite licenses. Nonetheless they make a substantial contribution towards production of bidis. As already indicated they are exempted from Central Excise by way of protection to small bidi manufacturers producing less than 20 lakh bidis per annum. In fact a parallel industry was running under the guise of excise exemption and most of the establishments within and outside the State have a thriving business in unbranded green bidis. The size of the operation of such establishments gave a clear idea about the clandestine production of bidis under the cover of excise exemption.The Trade Mark establishments felt that this kind of bidi establishments posed a serious threat to the law abiding bidi establishments and the industry as a whole.In a highly competitive industry like bidi, a clear-cut excise exemption enhanced the profitability, viability and competitiveness of these establishments.Apparently, the Contractors working for a trade mark or brand establishment, engaged Bidi Rollers for the task of rolling bidis required by the trade mark establishments but in actual practice they engaged a larger contingent of Bidi Rollers and got a substantial proportion of bidis rolled in a clandestine manner. However, it was not possible to find the exact number of Bidi Rollers in the State which has the highest proportion (17 percent) of Bidi Rollers amongst the bidi producing States in the Country.

The bidi establishments covered by the study have been classified according to the categories and presented in Table 2.1.

Table 2.1  Classification of the Establishments Covered
 
Sl.
No.
District / Region
Total Number of Branches and Contractors in the Establishments Covered 
Number of Branches and Contractors Actually Covered 

Principal Employers
Branches/ Contractors
Principal Employers
Contractors
Total
1
Stratum I
Sagar
10
244
10
14
24
2
Stratum II
Jabalpur and Satna
8
242 
8
12
20
3
Stratum III
Gwalior, Datiya and Vidisha
7
20
7
4
11
4
Stratum IV
Balaghat
3
58
3
4
7
5.
Stratum-V
Bhopal, Indore, Devas, Ujjain and Hoshangabad

10

24

10

-

10

Total
38
588
38
34
72

2.3  Types of Employees

2.3.1  As per the Bidi and Cigar Workers (Conditions of Employment) Act, 1966 the home workers as well as those working with the permission of or under agreement with the employers or the Contractors are employees while a person engaged or employed in any premises by or through a Contractor, with or without the permission of the employer, are contract labour. Under the Minimum Wages Act, 1948, the term 'employee' includes an out worker to whom any material or articles are given by another person to be made up, for sale in the house of the out worker or any other premises not under the control of that other person.Thus, the Bidi Rollers, whether home workers, or premises workers as well as skilled, un-skilled, manual or clerical workers employed directly or through a Contractor are employees for the purpose of the study.These employees have been classified into two broad categories as Bidi Rollers’ and the ‘Bidi Workers’.The term bidi worker includes all workers other than the ‘Bidi Rollers’.The nature and conditions of work of these categories of workers are more or less similar in all types of establishments under these two groupings.In bidi industry the workers other than Bidi Rollers are usually known as Factory Workers. As all the establishments employing such workers did not fall in the category of factories they have been classified as ‘bidi workers’ for the purpose of the study (Table 2.2).

Table 2.2   Pattern of Employment in Bidi Making Establishments Covered by the Study
 
Sl.
Number of
Category of Workers
No.
Stratum/ District
Establishments Covered 
Bidi Worker
Bidi Roller
Total
Principal Employer
Contractor 
1.
Stratum I
Sagar
10
14
345
4294
4639
2.
Stratum II
Jabalpur, Satna,
8
12
330
7733
8063
3..
Stratum III
Gwalior, Datiya and Vidisha
7
4
101
1680
1781
4.
Stratum IV
Balaghat
3
4
67
2171
2238
5.
Stratum V
Bhopal, Indore, Devas, Ujjain & Hoshangabad
10
-
156
1425
1581
Total
38
34
999
17303
18302

 

EXHIBIT 2


Number of Establishments Covered (Table 2.2)

2.3.2  Bidi Rollers

2.3.2.1  Bidi Rollers are responsible for rolling bidis according to the specifications of the person who supplies the raw material mainly comprising tendu leaf, tobacco and thread.A large number of the persons, mostly females, are engaged in rolling bidis for the Contractors or manufacturers within and outside the State. The Bidi Rollers working with or without the help of their family members, in their private dwellings are known as the home workers.Though they constitute a considerable proportion of the employment in the industry yet they do not enjoy the benefits of proximity to the employers and close contact with a large number of employees for redressal of their occupational grievances and escape the notice of the enforcement authorities. They all generally have to feel contented with their lot as it is rather impossible to locate and identify the employers and Sattedars for whom they are rolling the bidis.These home workers are often required to make their own arrangements for collecting the raw material and handing over the bidis rolled by them at the specified premises.This obviously exposes the limitations of the information available with the enforcement machinery.
2.3.2  Bidi Workers

2.3.2.1  Employees other than the Bidi Rollers are included under this group.After collecting green bidis from the Bidi Rollers, other related activities are performed at various stages by the bidi workers. They are employed directly by the manufacturers within the precincts of their establishments.The proportion of this category of employees in the different types of establishments depends on the volume of the activity.The nature of the work of the bidi workers usually employed in the different types of establishments is briefly given below:

(i)Wrappers and Labellers

Wrappers and Labellers are engaged in wrapping bidis into bundles of different types and sizes and pasting labels.They are mostly piece rate workers.

(ii)Bidi Checkers

Bidi Checkers do checking and sorting of the green bidis (i.e. unbaked bidis) delivered by the Contractors or by the Bidi Rollers.They also test check the bundles as well as the quality and quantity of the tobacco used by the Bidi Rollers.

(iii)Furnace-man (Sekaiwala)

Furnace-man is engaged for baking the bidis in a furnace to remove the moisture and dampness.He is also called as Bhattiwala or Sekaiwala.

(iv)Clerical Staff

These include Cashiers, Accountants and Clerks etc.In small and medium establishments, this category of employees is also discharging most of the managerial functions.

(v)Raw Material Distributors

This category of workers is engaged in distributing of raw material to the Contractors/Sattedars and Bidi Rollers for rolling the bidis.The requisite quantity of tobacco and tendu leaves is distributed by weight.

2.4  Classification of Bidi Workers

2.4.1  The bidi workers employed in these establishments covered by the Study classified according to occupations are presented in Table 2.2.These workers are covered by various labour laws and are entitled to benefits, like provident fund, bonus, gratuity, over time etc.

2.5  Production

2.5.1The daily production can very easily be assessed keeping in view the size of employment.Normally 100 Bidi Rollers are required to produce one lakh bidis daily.Larger the production, greater is the size of establishment.The production data was collected separately from the employers and the Bidi Rollers through the Schedules designed for the study.The employers are required to keep a record of their production in the prescribed form for assessment of excise duty.The Minimum Wages Act, 1948 also provides for maintenance of records pertaining to attendance, production of piece rated workers, wages, deductions etc.In cases where these records were not available the requisite information was collected by way of oral versions of the employers.This information had apparent limitations as some employers, running smaller units had the tendency to conceal not only the size of the employment but also the magnitude of production to evade legal provisions under the law.The number of bidis rolled by the Bidi Rollers was usually available in the log books provided to them by the employers.However, in the absence of the same the information given by the Bidi Rollers had to be relied upon.This information invariably concealed the share of the dependants of the Bidi Rollers in the production.

2.6  Establishments Covered and Average Output:

2.6.1  The number of establishments covered during the study and the average output per Bidi Roller based on the data collected from the employers is presented in Table 2.3.

TABLE 2.3  AVERAGE NUMBER OF BIDI ROLLERS AND OUTPUT OF 

BIDI ESTABLISHMENTS PER DAY  (Employers Version)

 

Sl.
No.
District / Region
Number of
Establishments Covered
Average Daily Employment of Bidi Rollers
Average Number of Bidis Rolled Per Day (In Lakhs)
Average Daily Number of
Bidis Rolled Per Bidi Roller
1
Stratum I
Sagar
24
205
7.38
3601
2.
Stratum II
Jabalpur, Satna,
20
394
6.41
1627
3.
Stratum III
Gwalior, Datiya and Vidisha 
11
100
1.14
1142
4
Stratum IV
Balaghat
7
308
4.54
1474
5.
Stratum V
Bhopal, Indore, Devas, Ujjain and Hoshangabad
10
145
4.16
2873
Total
72
230
4.73
2057

2.6.2  It was observed that on an average a Bidi Roller could roll a maximum of around one thousand bidis in a day.However, the perusal of the above table reveals that the number of bidis rolled per day by a Bidi Roller varied from place to place. On an averagea Bidi Roller rolled 2057 bidis per day. The excess of bidis rolled above 1000 is due to the contribution of the helping dependents, mostly their family members. The registered Bidi Rollers usually collected the raw material from the establishments in their names, for taking advantage of the benefits of Employees Provident Funds Act and other Labour Laws.

2.6.3   The information relating to production of bidis in Table 2.4 is based on the log books provided to the Bidi Rollers and oral versions recorded during the field study.It was found that this data was more realistic than the one based on the information collected from the employers.The differences in the two sets of data presented in Table 2.3 and 2.4 are attributed to contribution of helping dependants and various other practices followed in production of bidis. A comparison of daily production reported by the employers and the Bidi Rollers shows that the employers had under reported their production by about 6.3 percent. This is attributed to the non-inclusion of green bidis purchased from small manufacturers by big establishments, which were marketed under their own brands.The purchase of bidis from small manufacturers as well as unregistered Bidi Rollers was in vogue in some parts of the State.In many cases,the Bidi Rollers registered with a factory were exploiting the unregistered Bidi Rollers by engaging them and supplying the bidis rolled by them to the factory as their own production.They paid nominal wages to the unregistered Bidi Rollers.This practice was prevalent at a large number of places. However, it is difficult to estimate the total number of Bidi Rollers and total bidi production in the State as in several places, especially along the borders of the State, the Bidi Rollers also rolled bidis for the neighbouring States of Jharkhand, Chhattisgarh, Gujarat, Uttar Pradesh, Maharashtra and Andhra Pradesh. 

TABLE 2.4   AVERAGE DAILY OUTPUT OF BIDI ROLLERS

Sl.
No.
District / Region
Number of Bidi Rollers Covered
Average Daily Output per Bidi Rollers (Bidi Rolled)
1
StratumISagar
101
1827
2.
StratumII
Jabalpur, Satna

64

2241

3
Stratum III
Gwalior, Vidisha and Datiya

39

1950

4
Stratum IV
Balaghat

20

2049

5.
Stratum V
Bhopal, Indore, Devas, Ujjain and Hoshangabad

70

1736

Total
294
1927

2.7   Contribution of Dependants

2.7.1  Tendu leaves and tobacco are the main constituents of bidi. Curing of tendu leaves for 6-8 hours is necessary before cutting / preparing into bidi tubes for filling tobacco.All this process is carried out by the Bidi Rollers themselves or with the help of family members at their dwellings.Therefore, in order toassess the contribution of the family members in rolling bidis, it is necessary to segregate the output of the helping dependants from that of the registered home workers.Table 2.5 presents the estimated out put of the home workers and their helping dependants.

TABLE 2.5  AVERAGE DAILY NUMBER OF THE BIDI ROLLED BY HOME WORKERS

AND THEIR HELPING DEPENDENTS 

Sr. No.
Stratum/ Districts
Number of Bidi 
Number of
Helping 
Average Number of Bidis Rolled
Rollers Covered
Dependents
Bidi Rollers
Dependants
Total
1
2
3
4
5
6
7
1.
Stratum I
Sagar
101
105
1059
739
1827
2.
Stratum II
Jabalpur, Satna
64
71
1196
943
2241
3.
Stratum III
Gwalior, Datiya and Vidisha 
39
42
1046
859
1950
4
Stratum IV
Balaghat
20
23
1002
911
2049
5.
Stratum V
Bhopal, Indore, Devas, Ujjain and Hoshangabad
70
72
999
716
1736

Total

294
313
1069
806
1927

2.7.2   The helping dependants did not feature anywhere among the workers of the industry, as the employers did not allow most of these Bidi Rollers to get themselves registered with the factories.In most of the cases, it was only the head of the family who was enrolled as a Bidi Roller whereas in reality the entire family was engaged in rolling the bidis. The average daily production of the home workers worked out to 1927 bidis out of which the helping dependants on an average contributed about 806 bidis a day. Thus, though the helping dependants contributed about 42 percent towards the total production of the bidi yet they are deprived of their share of benefits provided under the law. This accounted for the wide variations in the number of bidi workers identified and the beneficiaries of the welfare schemes.

2.8  Estimated Number of Bidi Workers

2.8.1  According to the Annual Report of the Ministry of Labour for 2000-2001 the estimated number of bidi workers so far identified in the country was 44.11 lakhs.According to these estimates Madhya Pradesh (17 percent)has the highest number of bidi workers in the country.The State wise data is presented in Table 2.6.

Table 2.6   STATEMENT SHOWING STATE-WISE DETAILS OF THE TOTAL NUMBER OF BEEDI WORKERS
 
Sl.Name of the State
No.
Total No. of Beedi Workers Estimated at present
No. of Identity Cards 

Issued till date

1.Andhra Pradesh
6,25,000
5,18,954
2.Assam
7,725
5,791
3.Bihar
3,91,500
2,44,847
4.Gujarat
50,000
48,396
5.Karnataka
3,60,876
2,98,395
6.Kerala
1,36,416
1,12,887
7.Madhya Pradesh
7,50,000
6,92,014
8.Maharashtra
2,56,000
2,02,435
9.Orissa
1,60,000
1,47,274
10.Rajasthan
1,00,000
70,930
11.Tripura
5,000
4,814
12.Tamil Nadu
6,21,000
6,04,949
13.Uttar Pradesh
4,50,000
2,39,672
14.West Bengal
4,97,758
4,97,758
Total
44,11,275
36,89,116

Source:-Annual Report 2000-2001, Ministry of Labour.

2.8.2   As the bidi industry involves a vast majority of home workers, all the State Governments have launched schemes for identification of Bidi Rollers and issuing identity cards to them.According to the information provided by the Labour Department of Madhya Pradesh the number of bidi workers identified in the unified State was 1,40,575 (Table 1.1).Out of these workers 1,31,329(93.42%) were in the State of Madhya Pradesh.As per the Annual Report of the Ministry of Labour, (2000-2001) the estimated numbers of bidi workers in Madhya Pradesh stood at 7,50,000 out of which there were 6,92,014 identified bidi workers.On the basis of the proportion (93.42%) worked out from the information supplied by the Government of Madhya Pradesh and the data published in the Annual Report of the Ministry of Labour the estimated number of identified bidi workers in Unified Madhya Pradesh works out to 6,46,564.During the course of the study as many as 294 Bidi Rollers were covered.These home workers were assisted by the family members in large numbers.The study revealed that at least 313 dependants were rendering substantial help to those 294 Bidi Rollers in rolling bidis.Hence a reasonable estimate of Bidi Rollers in the State can be arrived at by inflating estimated number of 6,46,564 identified workers in that proportion i.e. 106.46 percent and adding another ten percent factory workers which works out to be 14,68,386.Further, some clandestine activity in rolling green bidis was also noticed in the state. It may thus conveniently be construed that the total number of bidi workers in Madhya Pradesh are about 14.75 lakhs.

2.8.3  The characteristics of the establishments and employers discussed in the foregoing paragraphs are of immense importance for the studies on the implementation of the Minimum Wages Act, 1948.The technique and design of the study take due care of all sorts of establishments and employees to have a feel of the status of compliance with the law under varying conditions. 
***** End of Chapter 2 *****