Wage Structures in the Indian Garment Industry

The Indian economy adopted a liberalised economic policy regime after 1990–91, in an attempt to ensure greater integration of the domestic economy with global competitive markets. This was motivated by the policy assumption that opening up of domestic markets would enhance the competitive efficiency of domestic business enterprises on account of transfer of technology, knowledge and skill sets from abroad. A large set of literature has shown that despite the modernisation of domestic enterprises over the past two decades, the Indian manufacturing sector has failed to propel itself on a high growth trajectory (Unni and Rani, 2004). Contrary to the policy belief, severe competition in the global export markets have led domestic firms to resort to cost cutting labour market strategies that have led to the widespread prevalence of oppressive labour relations across the Indian manufacturing sector (Vijay, 2009).

In a bid to remain globally competitive, firms have targeted reduction of labour costs as a tool to ensure a reduction in production costs. This is evident in firms denying payment of minimum wages, social security, or fringe benefits to its workforce and increasingly resorting to informal employment contracts that ensure flexibility to businesses in terms of labour costs. Persistent minimum wage violations or wage theft practices coupled with a lack of freedom of association are becoming alarmingly visible across the Indian manufacturing sector.
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