Government of India
ONEVALUATION STUDIES ON IMPLEMENTATION OF
THE MINIMUM WAGES ACT, 1948
IN BIDI MAKING ESTABLISHMENTS IN
CONCLUSIONS AND MAIN FINDINGS
The Evaluation Study on the implementation of the Minimum Wages Act, 1948 in the bidi making establishments in the State of Madhya Pradesh was conducted during April - May, 2001 in the districts of Sagar, Gwalior, Vidisha, Bhopal, Satna, Balaghat, Hoshangabad, Indore, Ujjain, Dewas and Datiya comprising five Strata. In all, 72 establishments covering Trademark and Contractors establishments and 400 employees were covered. These employees included 294 Bidi Rollers’ who rolled bidis in their own dwellings and 106 ‘Bidi Workers’ who worked in factory premises. Bidi Rollers received an active assistance from their dependants in rolling bidis. The main findings and observations are as under:
8.1 Bidi making is a labour intensive agro-forest based cottage industry where the entire manufacturing process is manual requiring special skills. About 14.75 lakh bidi employees were estimated to be employed in Madhya Pradesh.
8.2 The Bidi industry includes a large number of ‘establishments’ and ‘industrial premises’ licensed under the Bidi and Cigar Workers (Conditions of Employment) Act, 1966 together with an unknown number of those functioning without the requisite licenses.The bidi factories, Trade Mark or Brand Establishments, formed the core of the industry.These establishments possessed the requisite licenses from the Excise Departments for procuring tobacco and tendu leaves for manufacture and sale of bidis.
8.3 The types of bidi establishments varied from the established trade marks and their branches functioning like the modern industrial units, to the manufacturers of unbranded bidis similar to the establishments of the big, small and petty Contractors engaged by the trade mark or brand establishments.
8.4 The bidi establishments operated through depots for direct transaction with Contractors. The depots set up by the establishments issued the raw material, to the Contractors for rolling specific number of bidis. A Bidi Roller is provided with 575 to 700 grams of tendu leaves and 225-280 grams of tobacco (depending on the quality of leaves and the size of bidis to be rolled) for rolling 1000 bidis.
8.5 The bidi establishments undertake functions like supplying raw material, sorting, checking, baking, labelling, wrapping, packing and marketing of bidis.Normally, about 100 Bidi Rollers have to be engaged for rolling one lakh bidis per day.
8.6 Majority of the employees were working as Bidi Rollers operating from their own dwellings. They were known as the 'Home Workers'. They were predominantly females. The other categories of employees working in the bidi factories like Sorters, Checkers, Bakers, Packers, Raw Material Distributors, Clerks, Managers, etc. are known as the ‘Bidi Workers’.
8.7 The home workers operating from private dwellings were actively assisted by members of their families in rolling the bidis.These helping dependents, although contributed 42 per cent towards the production of the industry, yet they did not feature anywhere in the labour force and were deprived of the benefits provided under various Labour Laws.
8.8 The overall educational level of the employees covered by the Study revealed that a large proportion (37.3 per cent) of the employees were illiterate, only 6.0 per cent had education upto matriculation level and only 2 percenteducation beyond matric level. About 39 percent & 16.0 percent had their education up to primary and middle level respectively. Similar trend was witnessed among Bidi Rollers and Bidi Workers.
8.9 Among the Bidi Rollers 41.5 percent were illiterate, 38.1 percent had their education up to primary level, 3.7 per cent had received education upto Matric and the remaining 16.7 percent had received education upto middle. None of them had received education beyond matric. Amongst the bidi workers taken together 39.6 per cent had education upto primary level 15.1 percent up to, middle and 12.3 percent up to high school levels.They were working as Taraiwala, Bhattiwala, Raw Material Distributor, Packers/Labellers, etc. The workers who had received education upto matriculation and above were employed as Clerks and Managers.The proportion of illiterates among bidi workers was 25.5 per cent.
8.10 The caste composition indicated that among bidi workers and Bidi Rollers 15.1 and 52.0 per cent respectively belonged to the Scheduled Castes category.It was observed that themale Scheduled Caste workers went out in search of better jobs. None of the employees belonged to the Scheduled Tribes.
8.11 The Bidi Workers and Bidi Rollers had the tendency to put in large number of years with the same employer due to assured employment. The proportion of bidi workers and Bidi Rollerswho had put in more than 10 years of service was39.6 per cent and 43.5 per cent respectively. The proportion of those with more than 20 years of service worked out to 6.7 and 6.8 per cent respectively.
8.12 A large number of workers had rural background. As many as 77.4 per cent of the bidi workers and 71.4 per cent of the Bidi Rollers had rural background and the remaining workers were from urban area.
8.13 The Minimum Wages Act, 1948 requires the Central and State Governments to fix, revise and enforce the rates of minimum wages in Scheduled Employments falling under their jurisdiction.‘Tobacco (including Bidi Making) Manufactories’ is a Scheduled Employment originally included in the schedule appended to the Act.Prior to 1953 in the unified State of Madhya Pradesh.The minimum rates of wages in this employment initially varied between Re. 0.62 to 1.37 per thousand bidis. In 1966 they were increased ranging between Rs.2and Rs. 20 per thousand bidis and subsequently revised on several occasions.As per the latest wage revision effective at the time of the study,the minimum rates of wages for Bidi Rollers were fixed at Rs.36.17 for rolling 1000 bidis and Rs.63.95 for packing etc. one lakh bidis for the bidi workers.
8.14 With the latest wage revision, the minimum wages have been linked to 1206 points of the All India Average Consumer Price Index Numbers for Industrial Workers (1960 =100) compiled by the Labour Bureau, Shimla.In addition all categories of workers are entitled to Variable Dearness Allowance(VDA) at the rate of Re.0.01 per point rise in the index beyond 1206 points.
8.15 The prescribed minimum wages for the employees are fixed both on time rate and piece rate basis. The wages for employees engaged in rolling bidis, wrapping and packing were fixed on piece rate basis, while for all other activities they paid on the basis of time-rate system of wages.In all 81.5 per cent of the employees were paid on piece-rate basis and the remaining on time-rate basis.
8.16 The average daily earnings of bidi workers were Rs.69.36. However, it varied between Rs.61.62 for Raw Material Distributors to Rs. 89.32 for the Clerical and Managerial staff clubbed together.
8.17 The average daily earnings of the Bidi Rollers worked out to Rs.22.04 while those of their helping dependents to Rs. 16.62.
8.18 All the employers were aware about the important provisions of the Minimum Wages Act, 1948; the Bidi and Cigar Workers (Conditions of Employment) Act, 1966 and the Equal Remuneration Act, 1976. Similarly all the Contractors were also familiar with the provisions of the relevant labour laws and related matters of their interest.
8.19 The proportion of bidi workers showing awareness about the prescribed rates of minimum wages and about the existence of the enforcement machinery was 25.4 and 58.2 per cent respectively.The level of unionisation among the workers appeared to be neither encouraging nor very effective.
8.20 All the Bidi Rollers displayed complete ignorance about the prescribed rates of minimum wages and enforcement machinery.
8.21 Only about 55.7 percent of the bidi workers were receiving the prescribed minimum wages in the State.
8.22 The Bidi Rollers were the most vulnerable section of employees.The home workers, mostly women, had no bargaining power and were rolling bidis with the limited purpose of supplementing their family incomes to the extent possible. None of the Bidi Rollers was receiving the prescribed minimum wages.
8.23 As per the information collected from records maintained by the establishments, 86.8 per cent of the Principal Employers Establishments were maintaining Registers of Employees and Muster-rolls each.The proportion of Establishments maintaining Wage Registers was 81.6 percent.The percentage of establishments maintaining records like the Register of Deduction on account of advances, log books and register of fines were 76.3, 61.8 and 63.2 respectively.It was observed that none of the Contractors or Sattedars was maintaining the requisite records.They usually made an excuse that the necessary records were maintained by the establishments for whom they are getting the bidis rolled.
8.24 The Minimum Wages Act, 1948 does not provide for registration of the establishments to which it applies as such the Act is usually enforced in the bidi establishments or premises registered or licensed under the Beedi and Cigar Workers (Conditions of Employment) Act,.1966.The enforcement machinery encountered serious obstacles in enforcing the Act in smaller establishments engaged in the production of unbranded bidis and in Contractors’ establishments.A substantial number of establishments falling in these two categories managed to operate without the requisite licences under the Bidi and Cigar Workers (Conditions of Employment) Act, 1966 in the guise of self employed persons.The excise exemption available to the manufacturers who manufacture 20 lakh bidis in a year, by way of protection to the petty manufacturers and self-employed persons, has resulted in a flourishing trade in un-branded bidis.It was observed that this provision was being exploited even by the big manufacturers to circumvent the legislative provisions and evade certain financial obligations towards the employees.This has created numerous problems for the enforcement officers.
8.25 Smaller units and rolling centres located in remote areas constitute a difficult segment for enforcement of the Act.It was difficult for the enforcement machinery to locate such establishments, not to speak of enforcing the law and checking the clandestine activity.The enforcement machinery also found it difficult to make frequent visits to the distant areas due to constraints of transport facilities.In Madhya Pradeshthe machinery for enforcement of the Labour Laws is headed by the Commissioner of Labour.Each district is headed by an Assistant Labour Commissioner or Labour Officer.The Labour Department is responsible for enforcing 14 State Labour Enactments including the Minimum Wages Act, 1948.In addition to the enforcement functions, the department also takes initiatives in prevention of strikes, lockouts and work-stoppages, settlement of industrial disputes through intervention and conciliation.On an average the enforcement officers have to carry out 83 inspections in a month under various Labour Laws.However, they found it difficult to make frequent visits to the vulnerable areas due to the lack of transport facilities, shortage of time and paucity of funds etc.
8.26 The enforcement authority suggested that for improving compliance, it should be made obligatory on the part of the employers to furnish the information sought from them.The fines should be heavy enough to act as deterrents.They were also of the view that there should be a provision for imposing on the spot fines, as in the case of some other laws such as pertaining Weights and Measures, Excise etc.,.There should be close co-ordination among the departments concerned with bidi industry like, theDepartments of Labour, Excise, Welfare and Small Industries.
8.27 The employers disclosed that in a couple of years the bidi industry will be badly hit since the cost of production was going up every six months as a result of revision of wages on account of Variable Dearness Allowance.The sub-standard quality of tendu leaf was making it all the more difficult to bear the burden of higher wages.In a highly labour intensive and competitive industry like bidi making, the volume of business was gradually shifting to other States with lower rates of minimum wages in the form of trade in un-branded or green bidis.As a result of low wage rates prevailing in the neighbouring States the bidi rolling activity shifted to the low wage areas in a big way and made it difficult for the bidi establishments in the high wage areas to compete with them.
8.28 Un-branded bidi manufacturers obtained tobacco and tendu leaf from Contractors and got bidis rolled at a much lower rate than the standard Trade Mark Establishments.These manufacturers sold these bidis to small shops without a trade mark or at times put the trade mark of a popular brand and market the spurious bidis.This had an adverse effect on the production and competitiveness of Trade Mark Establishments.
8.29 A peculiar type of practice for acquiring the bidis from Bidi Rollers by the employers was picking up in Madhya Pradesh to circumvent the provisions of the law.The employers sold the raw material to the Bidi Rollers and purchased green bidis from them to evade legal obligations towards the Bidi Rollers.
8.30 The enforcement officers felt that there could be a marked improvement in the enforcement of the Act by making it obligatory for the Contractors, Sub-Contractors or Sattedars to obtain licences under the Bidi and Cigar Workers (Conditions of Employment) Act, 1966.
The bidi establishments undertake functions like supplying raw material, sorting, checking, baking, labelling, wrapping, packing and marketing of bidis. Normally, about 100 Bidi Rollers have to be engaged for rolling one lakh bidis.
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