Paper on Contract Labour and Bondage in Andhra Pradesh (India)¹

Wendy K. Olsen, PhD
Lecturer in Quantitative Development Economics, Graduate School
University of Bradford, UK

and

R.V. Ramana Murthy, PhD
Assistant Professor
NALSAR University of Law
Hyderabad, India

II. Case Study of Palamuuru Contract Labour

Mobilising forced labour for public works such highways, railway tracks, irrigation projects, etc., had been a common colonial practice (Kerr, 1998).  Evidence suggests similar recruitments of labour originated in Mahabubnagar district.  For instance, since 1934 labour groups were used to build the Nizamsagar dam by the Nizam government.⁸  

The introduction of large-scale irrigation in the post-independence period turned this region into a source of cheap labour with a remarkable network of middlemen.  Such a relentless form exploitation in the region, has received surprisingly little attention in the literature on labour.  Walker and Ryan (1990), writing about several well-funded long-term village studies of which one was based in a palamuur labour village, say very little about it.  Nor do any official statistics exist to capture the extent of it, as the Indian Census and National Sample Survey have ignored seasonal migration.  However, several researchers have noted a significant level of presence of seasonally bonded labour in at least eight out of twenty-four mandils of the District (Ravinder, 1989; Ramana Murthy, 1991; Reddy, 1990; Rao, Usha, 1994).  The migrants from Mahabubnagar district can be classified into three groups: firstly, those who migrate for seasonal agriculture work in cotton, paddy and sugarcane growing areas; secondly, those who migrate to Hyderabad and other cities to work in the construction industry, usually also seasonally; and thirdly, those who migrate on contract work.  See for details Ramana Murthy (1991) and Usha Rao (1994).  In Mahabubnagar District alone local experts estimate that at least 150,000 people go away to migration works every year.  Of these, about 50,000 (one third) are thought to be bonded labourers. 
 

How the Palamuuru contract system works.  There are two ranks of middlemen: group maistries (labour contractors) and maistries (supervisors).  (We use the gender-specific term middlemen, although it is possible to have women taking on this role.⁹  All the intermediaries in this particular study area in 1991 and 1994 were male.)  Construction companies place an order for the requisite labour force and advance a mutually agreed amount of money.  Each group maistry patronises a team of maistries, each of whom actually mobilises a group of 20 to 30 labourers.  The company forwards some money to the group maistry, who in turn passes some on to the maistry, after retaining his commission.  The usual terms of the contract in both 1991 and 1994 were 8 to 9 months’ work, 12 hours work each day, a holiday for a fortnight, a pack of cheap cigarettes (beedies) for a man every week, and hair oil and food for the labourer and his/her dependent children.  The advance was Rs. 2000 per worker in 1991 for an eight month contract for a man or a woman.  Nominally, this was thought of as a monthly wage of Rs. 200 and provision of free food at the work site.  Two days’ wages are deducted for a day's absence (one for the day's wage and the other for the free food).  If a worker cannot work continuously, and falls sick, any medical expenses are deducted from the wage and counted as debt.  Workers renew their contracts yearly, sometimes because they cannot redeem their loans and sometimes in order to obtain further loans.  For labourers coming from landless and small peasant households struggling to subsist, the maistries are practically monopoly creditors and monopsony buyers of their labour power in the absence of alternative sources of credit and employment.  Such contract labourers hail from the lower castes, enabling the middlemen to command enormous control in enforcing the contract, restricting their mobility at labour camps, and so on.  The maistries have to guard the labourers to keep them from going away as their money is locked up in the investment.  Accounts are settled with the higher-up contractors only at the end of the period.  The respondents in the field study reported that many of the women suffer sexual exploitation, and that children are used for numerous unpaid services. 

The construction companies in this way save a phenomenal amount of money, by paying much less than market wages on the one hand, and extracting four to six hours overtime without pay on the other.¹⁰  For example, simple calculations reveal that each labourer otherwise entitled to more than Rs. 10,000 for eight months work is given only Rs. 2000, the remaining being shared by the company and the middlemen.¹¹  A maistry takes a gross commission of Rs. 30,000 and a group maistry Rs. 100,000 for one contract.¹²  As these middlemen invest money initially and settle accounts with the company only at the end of the year, they are highly exploitative.  The company has no formal or written relation with the labourers.  It is the maistry's responsibility to supervise, to extract work, and to settle the accounts as well as to settle disputes.  Almost all the labourers are illiterate and rely totally on the maistry in settling accounts (Ramana Murthy, 1991). 

The Palamuuru contract system violates the legal rights of workers.  It contravenes the Bonded Labour Abolition Act 1976, the Interstate Migrant Workmen Act (Regulation of Employment and Conditions of Service) 1979 and the Minimum Wages Act 1974 of the Government of India.¹³  Consider for instance the case of Chenayya, 28 years old, of Palem village: 

Field observations.  We present the observations made during the field investigations (as part of a study on rural migration in the region) in August 1991 in five villages in three revenue divisions (mandals) and during another visit in October 1994 in these villages and one more village.  The information presented here pertains to 49 contract labour households, which had in total 162 migrants.  Some of these households were re-visited in October 1994.  Information was elicited from the respondents using both questionnaires and informal inquiries.  Four out of the six villages have exclusively contract labour migration, and two villages have casual labour migration as well.  Inquiries were made about the socioeconomic background of the migrant labourers, the terms of their contracts, and why they went.  We present a summary of these and some profiles of labourers before moving to the analysis section. 

The villages were essentially poorly irrigated, semi-arid areas with red spongy soils having a low water retention capacity.  Village tanks are the principal source of irrigation, supported by wells, irrigating less than one third of cultivated land (see Table 3).  The main crops grown are paddy, jowar (sorghum), bajra (millet), groundnut and castor bean, as well as other pulses.  Low irrigation in the villages limits commercial agriculture to those households with good soil and/or water supply.  

Six out of the 162 contract labourers were aged above 45 years, and these reported 25 years of contract labour.  These people had worked on the Bhakranangal dam (circa 1951), Hirakud (circa 1959), Nagarjunasagar dam (circa 1961), and various steel plants, railway lines, and road constructions since then (Ramana Murthy, 1991).  Fifty-nine labourers between 35-45 years of age had been working since they were teenagers.  Fifty-eight people aged between 25-35 and 37 people aged between 10-15 years were working in the ongoing Narmada Dam (Madhya Pradesh)-Sardar Sarovar (Gujarat) project funded by the World Bank.  The health of the migrant workers deteriorates during the contract work, and many became unfit for this work by the age of 45 years. 

Contract labourers primarily hail from landless agricultural labour households (22 percent) and marginal and small farm households (67 percent), as shown in Table 4.  We have classified households owning less than 0.5 hectare of land as marginal; 0.5 to 2 hectares as small farms; and 2-4 hectares as semi-middle farms.  With the recent distribution of waste land to landless households, the number of marginal households has risen.  The caste-wise background of households having contract labourers showed 40 percent belonging to the scheduled castes, 15 percent to the scheduled tribes, and 45 percent to the backward castes.  One household belonged to a so-called ‘forward’ caste. 

The gross farm incomes from the subsistence agriculture of these households were estimated in per capita terms to be Rs. 332; Rs. 1866; and Rs. 3970 in 1991 for the marginal, small and semi-middle farms respectively (Table 5).  When the imputed costs of family labour were deducted, some households were shown to have negative net income.¹⁵  Needless to say, most of these people live below the official poverty line. 

Instability and change in migration pattern.  There is a considerable instability in migration patterns seen during our visits.  In two villages, people were migrating as casual labour to Hyderabad city, yet in these villages the Palamuuru contract system had been prevalent.  The transition to casual labour migration has been encouraged by several factors.  These villages had better irrigation facilities, compared to the four contract-labour villages, and even compared with the surrounding villages.  The people’s personal knowledge of Hyderabad city since the early 1980s had enabled them to wriggle out of the grip of the contract system and the middlemen.  However, this has only solved the immediate subsistence problem inasmuch as they continue to sojourn between their village and the city.  They did not avail themselves of any provisions in the city, such as ration cards or education of children.  With their incomplete integration into the urban economy and a faint hope of improvement in the condition of the home village, they shuttled back and forth between rural poverty and urban poverty. 
 

III. Analysis

As expressed by the migrants, the labour relations gain acceptability for the reasons akin to those for accepting attached labour.  

Oppression through reducing bargaining power:  

i) Dyadic: the maistries have a grip if there is an outstanding loan.  The debts incurred by migrant family members restrict their bargaining abilities in seeking either a contract or escape.  Fixing workers into contract labour overtime restricts their access to information on labour markets elsewhere, further weakening their bargaining abilities.  

ii) Structural: Many workers are so bankrupt and destitute that they have few options other than working for the maistry.  However, those with some irrigated land and information on labour markets are in a better position, and more of the casual labour migrants come from such households (Ramana Murthy, 1991: 90-95).  Workers who have relatives in cities are also in a better position to bargain with potential employers, since they can if necessary migrate to cities and look for work.   
  

Oppression through the body (corporeal):  

i) Dyadic: within a contract, the employer can control food intake, water supply, housing conditions, and to some extent the health care of the worker.  Palamuuru labourers, debilitated by the relentless work, depend on their employer for further loans to maintain and improve their health.  Occasional beatings and verbal abuse of those people who disobey the employer or who try to leave without repaying cause other workers to be self-disciplined labourers.  There may be strong gender differences in the nature of corporeal oppression and these require further research.  

ii) Structural: For many women the patriarchal system denies them wages for domestic labour, and then lets their menfolk control the wages they earn as employees.  Women are expected to accept a lack of personal spending money; domestic violence; and coercion from employers.  Sexual harassment of a woman who does physical outdoor work is seen by some people as being the woman’s fault, since she shows herself in public.  The resulting embarassment or illicit sexual liaisons may be seen as oppressive to women even though the people involved might think it perfectly acceptable.  In addition, female workers have to care for and feed children as well as themselves while working (in fields or at construction sites).  Men don’t have this disadvantage, merely because they are men in a patriarchal society.  Most women’s mobility is more restricted than men’s, not only because of the presence of children but also by the understanding that they are responsible for the home/hut/tent and therefore do not have a right to leave it without permission.  These implicit constraints on women's mobility limit their ability to secure information and improve their bargaining power.  Norms about the domestic roles of women cannot be neglected in considering their lives as contract migrant workers.  
  

Oppression through authority:  

i) Dyadic: During the Palamuuru contract, as described above, the maistry has control over the movements and activities of the workers.  Their control derives not only from the debt or contract, but also from class/caste identities and traditions of respect and servility that may operate between a maistry and a worker.  In addition, a female worker may face the authority of her husband, brother, father, or mother-in-law who may force her to work and possibly also deprive her of control over her earnings.  Children themselves are subject to authority of the elders, and in contract labour families, kids became contract labourers in their own right from the age of ten onwards (Ramana Murthy, 1991).  

ii) Structural: Habits and traditions of inter-caste behaviour may not require any explicit enforcement to remain extremely powerful.  Self-regulated submissive behaviour is embedded in the caste system, where workers of lower castes do not eat food in front of an upper caste maistry, may hesitate to touch them, keep a distance from them, do not enter their home/hut or their cooking area, and so on.  Employers hailing from the upper castes may have high political, social and economic status.  Furthermore, when going in public the worker may face ridicule and ostracism if they decide to flout the dictates of the maistry.  The combination of class and caste factors militates against the person’s consciousness in fighting the employer.  By contrast, workers who stay within the system become a part of a cohesive group serving one maistry and are subject to pressure to conform to the behaviour of that group.  
  

Value exploitation:  

i) Dyadic: It is possible to measure the gross profits reeled in by each maistry as the difference between their revenue and their wage bill to get a rough indicator of value-exploitation per worker and its variations.  However this account will not cover the additional indirect exploitation undertaken by the construction company by underpayment and the overtime without pay.  Handling the profits at local and higher levels requires more information and a clear conceptualisation of profit and surplus value.  Firstly, input costs on the employer's side should be allowed for.  Secondly, the profits realised by the contractor’s firm may increase over time after the contract itself is finished.  A dyadic approach to estimating the rate of value-exploitation would suffer from the tendency to focus too heavily on direct relations of production (the labour relation) and to ignore indirect exploitation through exchange.   

Nevertheless, even crude estimates, as given earlier, can have a powerful effect on consciousness since many workers may be unaware of the extent of exploitation.  Another area ignored by the calculation of value exploitation between employer and employee is the extent of unpaid labour that is being done by women and children (and perhaps also men, if they go to collect firewood or to get water).  In addition to cooking, watching children, cleaning, and doing other work aimed at reproduction of the labour force, women also provide sexual services (by choice or duress; for the husband or for the maistry).  It was difficult to gather information on this important area without long periods of residence, but we have begun to develop an agenda for local research and activism.  

ii) Structural: Perhaps more important than the pairwise rate of value-exploitation is the fact that these labourers seem to have a buffer between themselves and capitalist exploitation.  They would have to fight off the maistries and group maistries before they could wage a class struggle with the ultimate employers or even find out who they are.  The fight against parasitic middlemen would perhaps save them from bondage only to become free wage labourer in the usual capitalist sense (Miles, 1987).  New forms of unfreedom may also emerge, as Brass contends, yet at least the current forms might disappear through the growing consciousness of the people.  Such a radical consciousness is severely hindered by caste divisions and kinship loyalties (as Brass himself has pointed out, Brass (1986)).  

The recognition of modes of exploitation in interlocked markets is useful in two ways – both for innovative research, as mentioned above, and for innovative strategies for action.  The legal abolition of bonded labour has not succeeded in freeing bonded workers, though it may have had some effects on their consciousness.  Twice in separate instances described by respondents, Palamuuru contract labour were declared as bonded labour and released—once by the Lathur District collector at the request of a local voluntary agency, and once more recently in Ranga Reddy District.  There is no evidence of their rehabilitation.  These people will, in all probability, have now re-entered contract work.  One can argue for the formation of labour markets with generalised rights, yet continue the proletarian struggle for the reduction of value-exploitation and the elimination of oppression.  One author has gone so far as to include among the definitional characteristics of ‘free wage labourers’ the proviso that they must have the genuine right to withdraw their labour through quitting or going on strike (Grossman, 1997).  Grossman’s study, based in South Africa, illustrates how within capitalism the ‘freedom’ of workers is perpetually constrained.  It also shows that ‘freedom’ is a social construct which can be used in many contexts to represent various situations as acceptable.  At least one author has questioned the free/unfree dichotomy itself, arguing that it sets up a spectrum that lends itself to liberal and not to progressive values (Prakash, 1990).  The debate over unfree labour is not a matter of ascertaining facts, but rather one of spreading an action-oriented awareness of exploitative social relationships.  

One research proposal arising out of the rather disturbing evidence above is to explore modes of resistance as well as modes of oppression along the two dimensions shown in Table 1.  In this way the analysis presented in this paper moves beyond Hodgson’s original analysis and moves toward the action orientation of most political economy authors.  However the model-making marxists, notably Bhaduri and Bardhan, have ignored the need to analyse the change process and have instead appeared to see the system as perpetually reproducing itself.  Local non-governmental organisations (NGOs) are working on watershed development and natural resource management, and since the early 1990s they have begun to involve members in micro-credit groups.  However most of the NGO networks have weak links at the grass roots at present.  They could focus not only on income-generation and substitute credit sources, but also on the cultural, patriarchal, class, and caste bases of oppression in this region.  The case study suggests that strategies of the NGOs could perhaps be expanded to include a wide range of anti-oppressive activities.  Access to seaonal migrants would have to be focused during the farming season, or else visits to the works sites would be needed.  
   

IV. Conclusion

Interlocking of markets has received attention elsewhere in the literature.  It has been argued that landlords’ interlinkages can reduce the accumulation of capital on the part of producers, leading to retarded growth (Bhaduri, 1973, 1983).  The intermediaries in the Palamuuru labour case display a reactionary character by fixing a contract wage less than subsistence level, trapping the labourer in debt bondage.  However we cannot say that this form of bondage is restricting the development of capitalism, when the labourers are creating infrastructure which can be seen as future means of production (e.g. roads; dams both for power and for irrigation).  The rate of exploitation, direct and indirect, is high since intermediaries pay a wage much lower than urban market wages and extract considerable unpaid overtime and child labour.  Yet the exploitation may draw complicity from the labourer whose terms of contract resemble those of co-existing and pre-existing attached labour relationships in the region.  We would argue that in addition to being exploitative and parasitic on the hard work of labourers, the intermediaries are also using traditional caste-based and patriarchal modes of oppression to maintain their exploitative labour relations.   

Underneath the actions of the agents involved, we also have to look at the roles and identities that are internalised by workers.  Maistries and group maistries are seen as those who save the labourer in distress by offering work when otherwise they might starve.  Some lower-caste people who serve the landlords and employers think they will be rewarded with patronage during crises.  This patronage may at present consist only of loans which further bind the worker and the worker’s family.  It would be misleading to judge from some workers’ attitudes such as loyalty, dependence, devotion and submission that their bondage is completely self-chosen and voluntary.  On the contrary, studying local cases of resistance, resentment, and revolt would throw more light on the underlying compulsions as shown by Kapadia (1995) and by Lerche (1995).  This is an area for future research.  

Organising labour in the light of the informal and interlocked nature of labour markets poses an extremely difficult task.  Migrant labourers are scattered and often travelling.  The eradication of bonded labour will need a multi-pronged strategy involving propaganda, legislation, mobilisation, rehabilitation, and some provision of basic amenities.  Any fragmented effort may fail. Isolated attempts to rehabilitate people have been failures.  Low wages, both for men and for women, themselves have to come under scrutiny, since the lack of independent subsistence is one reason why people accept bondage.  The state has tried three means to help such workers: the minimum wage laws, which are hardly ever implemented where local market wages lie below them; the employment guarantee programmes, which have not been enough to meet the needs of the masses; and the law abolishing bonded labour (dated 1976) which is still not effective.  A new strategy is needed.  

The NGOs in the district have started women's education programmes which try to empower people to secure access to specific government relief programmes.  In particular, women are taught to approach authorities directly for seeking access to local employment schemes.  Our analysis has shown that the oppression that is linked to value-exploitation extends into family life, village rituals, traditions and norms of caste hierarchy, and thus is to some extent beyond the reach of the modern state.  The elimination of the parasitic middlemen’s role is part of the answer yet more fundamental changes are also needed.  In the process of struggle, any measures taken must recognise the past structural locations, the beliefs and values, and the embodied capabilities of workers, as well as the dyadic long-term relationships upon which some workers depend.  Nevertheless, there are prospects for change: 

 

Notes

1.  We are grateful for comments received at the Conference of the Indian Political Economy Association, 1995, and at the Conference of the Society for the Advancement of Socio-Economics, 1994, on material presented here.  We also wish to thank D. Narasimha Reddy for his support regarding this work.  Finally, we are grateful to the advice of the anonymous reviewers regarding revision of the paper.   back to text  

2.  "Manu, writing later than Koutilya, outlined only seven categories of dasas.  They are: persons captured in battle; those enslaved in return for food; dasas born in the house of the master; those who are bought; dasas inherited as part of patrimony; dasas who are given away by their parents; and persons enslaved for not paying a fine." See Chakravarthy (1985), 40.   back to text  

3.  An account of various colonial laws is given by Dingwaney (1985) in Patnaik and Dingwaney, eds. (1985), 340-50.   back to text  

4.  One example illustrating the gender bias implicit in ungendered analyses of ‘workers’ is van der Linden’s analysis of employers’ and employees’ strategic choices regarding employment relations.  Van der Linden glosses over gender differences and possible additional sources of control or oppression facing women, relative to men.  Van der Linden presents an idealised model of employers’ motives and employees’ motives.  His use of s/he as the pronoun for employers here does not resolve the problem of having a fundamentally ungendered analysis at this point (1998: 516-519). 
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5.  Studies such as Kapadia (1995) and Lerche (1995) diverge from the pattern set by Bhaduri (1983) and Miles (1987).   back to text  

6.  Mahabubnagar was earlier known as Palamuuru.  It was renamed after the erstwhile ruler, the 6th Nizam, Mir Mahabubali Khan in 1929, but people still call it informally by its old name, and the migrant labourers are referred to as Palamuuru labour.  The district was under autonomous kingdoms (Samsthanams), and administratively and politically the region remained isolated and insulated from the famous Telangana Peasant armed revolt of 1947.   back to text  

7.  The Report on Indebtedness in Nizam Domain (1934) mentioned that the district was under severe drought, near famine conditions, with loss of cattle and subsequent indebtedness among farmers.  
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8. "The construction of Nizamsagar dam involved a massive need for labour both skilled and unskilled.  Especially excavation of earth, blasting, blasting rock in foundation, quarrying stone for machinery and miscellaneous.  The labour for these works had been imported from dominions including Raichur, Gulbarga, Mahabubnagar, Nalgonda and Karimnagar...Palmuuries coming from Mahabubnagar did a good work at excavation, especially earth work at ground level...The method of recruiting the labourers is mainly through the department by forwarding advances ranging from Rs. 5 to Rs. 10 per year for the gangs willing to come." The Report on the History of Nizamsagar Project, Hyderabad, Deccan, Public works Dept., H.E.H.Nizam Dominion, 1939 (A.P.Archives, Hyderabad).   back to text  

9.  The use of the male gender here is important empirically because (a) one cannot study female supervisors, so can only comment on male supervisors; and (b) the gendering of supervision may give hints to future researchers on why the system perpetuates itself so repeatedly.  Life histories, family case studies, or critical incident analysis may be needed to examine why men turn to this particular activity and how these men interact with the large contractors in ways that ultimately exploit both men and women.  The present study has more limited aims and did not use in-depth qualitative methods. back to text  

10.  At the rate of 4 hours per day of extra-labour, there are 112 days of unpaid work!  Taking 336 workdays per year multiplied by Rs. 35 daily wage (Hyderabad construction industry wage at that time) the sum is Rs. 11,820.  Assuming an absence of 30 days in that period, the labourer is still entitled to Rs. 10,710.   back to text  

11.  The public works department while calling for tenders on construction work gives a rough cost of production, which includes provision of market wages.  The lowest bidder is given the contract and there is nobody to check on what is actually paid.  The construction companies find it advantageous to rely on the middlemen for various reasons such as easy mobilisation and few direct management problems—it’s the maestry’s headache and the company can save a phenomenal amount of money by underpayment.  The labour supply is not only assured for the present but also for the future.  
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12.  By contrast the statutory minimum wages for agricultural labour tasks over this period were all less than Rs. 20 per day.   back to text  

13.  According to the Bonded Labour Abolition Act, a person is presumed to have entered into the contract in consideration of i) advance of money by the person/ascendants/descendants from the employer, or ii) in consideration of being born a certain caste, or...for a specified/unspecified period of time, based on oral or written contract.  Bonded Labour Abolition Act 1976, Labour Year Book, Labour Bureau. Shimla. 1-5.  See also Brass (1997b: 42) for a review of what he calls India’s ‘law-as-rhetoric’.   back to text  

14.  From field data collected by Ramana Murthy in 1991 and 1994.    back to text  

15.  Given the subsistence nature of the local agriculture, these gross farm incomes had to be estimated from information on the yield and acreage of respondents’ fields, after deducting the imputed cost of reported purchased inputs.  Net incomes were also calculated by deducting imputed values of family labour, using an estimated 1991 local wage rate of Rs. 10 per day for all.  Actual wages vary according to the sex and age of worker, and by task, but this minimal figure was used as a rough estimate’.    back to text  

16.  In Telugu the word for famine also means drought (karuvu).   back to text  

17.  From field data collected by Ramana Murthy in 1991 and 1994.    back to text  

18.  From field data collected by Ramana Murthy in 1991 and 1994.    back to text  

19.  From field data collected by Ramana Murthy in 1991 and 1994.    back to text  

20.  From field data collected by Ramana Murthy in 1991 and 1994.    back to text  

21.  From field data collected by Ramana Murthy in 1991 and 1994.    back to text  

22.  From field data collected by Ramana Murthy in 1991 and 1994.    back to text  



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