Judicial production of labour market flexibility: contract labour employment in Indian organised manufacturing

This chapter examines the overall legislative and regulatory framework that governs India's labour markets and outlines the current debate surrounding the impacts of restrictive labour market institutions and their implications for job creation. It draws on previous studies of aspects of Indian labour markets and focuses on the Contract Labour Act, 1970, which has not received much attention in the labour literature. The chapter examines the extent to which recent judicial interpretations of the CLA may have added to labour market flexibility in India and present empirical evidence for the increased employment of contract labour in Indian manufacturing as a result of these changes. It shows the expansion in contract labour as a mark of increased labour market flexibility. The chapter outlines the overall legislative and regulatory framework that governs Indian labour markets, before moving to a consideration of its implications for employment and a review of the existing empirical literature.