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


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



II. Case Study of Palamuuru Contract Labour

Growth and origin.  Mahabubnagar district in the state of Andhra Pradesh in India is an unindustrialised, chronically drought-prone, and unirrigated region now popular for Palamuuru labour for six public works.6  It is useful to glance over certain statistics of the region.  The district has more poverty than other districts in the state, according to 1987-88 estimates.  Sixty-five percent of the people live below poverty (Radhakrishna et al, 1987).  For the year 1993, eighty percent of the district was officially declared as drought affected.  Field work was done by Ramana Murthy in 1991 and 1994.  The region has a history of drought throughout the last four decades or more.  Drought has led to a massive decline in the area under tank irrigation i.e. dams with reservoirs of varying sizes, which is the principal source of water for crops (see Table 2).7  The net sown area under all principal crops has declined over thirty percent in the past two decades.  Similarly, fallows have increased and rainfall often deviates far below the historic normal level.  Cultivation is possible only for three to four months in kharif season (August to December), leaving a slack season of over eight months.  Such regions have for centuries provided cheap labourers who migrate seasonally for survival and who will work for extremely low wages. 


Table 2: Land Use, Irrigation and Rainfall in Mahabubnagar District  (in thousands of acres)  
Year  Net Sown Area  Area Under Canals  Area Under Tanks  Net Irrigated Area 
1961  936,300  10,535  21,955  110,064 
1971  1,053,713  22,430  25,730  108,753 
1981  919,707  24,090  50,942  126,522 
  Source: Compiled from various Statistical Abstracts, Published by Government of Andhra Pradesh, Bureau of Economics and Statistics, Hyderabad.

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 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. [rupees] 5 to Rs. 10 per year for the gangs willing to come. (H.E.H. Nizam Dominion, 1939).

The existence of vettichakiri (one word for bonded labour in Telugu language) may have facilitated labour mobilisation by the village administrations in the Nizam dominion.  The practice of engaging contract labour for all major public works, particularly dams, canals highways, etc., continues unhindered even until today.  One sees the tenders for government contracts to organise large-scale building sites (labour and inputs) in most Indian newspapers.  Thus ironically the bonded labour discussed here as existing within capitalist patriarchy is actually primarily sponsored and funded by the Indian government. 

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: 

The maistry and group maistry were cruel.  They beat my wife when we said we wanted to go to Hyderabad for work.  I have some loans to Rs. 7000.  The maistry does not relieve me from contract work.14 

Although the legislative acts are so liberally framed, with victims not having to produce any written evidence, they are difficult to enforce because the people have little alternative employment.  The number of these contract labourers can be no fewer than 50,000 people (4.9 percent of the number of ‘main workers’ as described in the Census of the District of Mahabuubnagar).  Several other researchers have confirmed this degree of prevalence, for example, Usha Rao (1994) and Ravinder (1989). 

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.  


Table 3: Land Use and Irrigation in the Sample Villages According to the 1981 Census  
Village  Area (Hectares)  Percent of Land Cultivated  Percent of Land Cultivable Waste  Percent Forest Land  Percent Irrigated by Any Source 
K. Nagula  1989  55%  1%  10%  9% 
Banala  925  78  17  22  11 
Balmur  2160  58  17 
Palem  769  84  30 
Pangal*  2319  44  17  13 
Mohammed Pur*  836  80 
Source: Census of India, 1981. 

* Note: These two villages have casual out-migration, whereas the others have exclusively Palamuuru contract out-migration on a seasonal basis.

Most of the poor practiced subsistence agriculture in the kharif season and migrated for their livelihood in the slack season.  Declining agriculture had forced many people from middle and upper peasant households out of agriculture.  Some such men had taken up the role of maistry and group maistry, which enabled them to exercise the traditional ways of controlling labourers under modern economic conditions. 

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. 


Table 4: Age, Sex and Class Distribution in the Sample Study  
Type of House-hold  Number of Households in Sample  Number of Contract Migrants  Age Distribution of Migrants  Gender 
      10 to 15 Yrs  >15 Years  Male  Female 
I. Landless  11  35  30  17  18 
II. Marginal Farms  19  58  17  41  26  24 
III. Small Farms  14  52  19  33  37  14 
IV. Semi-Middle Farms  17  16  14 
Total:  49  162  42  120  94  58 
Source: Ramana Murthy, field data, 1991.

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. 


Table 5: Income and Debt Among Sampled Contract Labour Households  
Type of Household  Average Land Holding (Acres)  Average Gross Farm Income  Per Capita Gross Income, Rupees, including Wages  Average Household Debt 
I. Landless  1195  3831 
II. Marginal Farms  1.5  332  1575  3256 
III. Small Farms  4.1  1586  1450  3839 
IV. Semi-Middle Farms  9.1  3970  1206  6482 
Source: Ramana Murthy, field data, 1991. 

Note: Per capita gross income per annum was estimated as wage income in the case of landless labour and wages plus farm income in the case of the land-owning households.  No income was imputed for own-labour on farms in the latter cases.

Table 6: Sources of Debt
Type of Household  Indebtedness By Source of Loans (Percent Owing): 
  . . . to the Maistry  . . . to the Moneylender  . . . to the Bank  . . . to Relatives and Friends 
I. Landless  56  32  12 
II. Marginal Farms  48  21  16  15 
III. Small Farms  32  31  21  16 
IV. Semi-Middle Farms  39  21  28  12 
Source: Ramana Murthy, field data, 1991. 

Note: The various debts of households were aggregated and divided by the number of households to arrive at average household debt of different farm size classes.

Reasons for accepting advances.  The contract labourers got loans of Rs. 2,000 each and had debts of up to Rs. 10,000 per household.  The average outstanding debt for each category of household is shown to be several thousand Rupees (Table 5).  The estimated farm incomes were below the poverty line, and thus below subsistence.  Most loans were taken from maistries, and these were nominally interest free.  As one respondent, Ballayya, 35 years old, said:   My father took a loan of Rs. 500 15 years ago on my name in order to marry my sister.  Debts increased as we took further loans when famine hit the village.16  As the old loans being repaid through my labour, further loans were taken for the reasons of my marriage house construction and purchase of some land.  Today my wife and I still go for the contract work to repay some outstanding loans.  My daughter is growing to marriage age.  Who will give a loan without pledging any collateral?  The maistry has agreed to give Rs. 3000 in the next season.17 

The loans that were obtained from moneylenders constituted 30 per cent of total debt and were charged at interest rates of 48 to 60 percent per annum.  Most of these loans, other than those incurred during the contract, were taken for the purposes of marriage, construction of houses, agricultural investments or medical expenses.  The erratic rainfall and declining ground water also drew small peasants into indebtedness, as seen in the case below: 

Kistayya (38 years old) held 6 acres land jointly with his brother.  Both invested Rs. 30,000 on a well to grow groundnut in 1987 by borrowing Rs. 10,000 from a rural bank and Rs. 15,000 from moneylenders at a 48 per cent per year interest rate.  Two years later the well dried up and he had to take an advance from a maistry for subsistence.  The family has an outstanding loan of Rs. 11,000.18  

Similarly in another instance, 

Golla Chandrayya took a loan from a bank under the Integrated Rural Development Programme (IRDP) of Rs. 5500 in 1989.  All the sheep he bought died for lack of veterinary care.  He repaid the first instalment of Rs. 1000 by taking an advance of Rs. 4000 from the maistry.  The rest of this money was spent repaying consumption loans taken from relatives for subsistence.  He has a fresh debt of Rs. 600 incurred in Rajasthan on contract work.19 

Couples were preferred by maistries and were given larger total loans in case of need, being seen as reliable.  The status of female migrants was appalling, as the advance money given on their labour, is given to her husband or father.  These women scarcely have any control over their earnings.  As Venkata Laxmi (29 years) narrates, 

The men would take our money and often squander it on liquor.  They beat us if we demand the money.  We work hard on fields as wage labour and save money for our needs.  The contract work is so hard.  They make us run all the time.  We have to keep pace with the concrete mixing machines without a respite.  Any good looking women can never escape sexual harassment.  But what to do, it is a question of survival.20 

Maistries hailed from land-owning households, and in the past mostly came from the upper castes, particularly Reddies.  In 1991 and 1994, though, group maistries were encouraging maistries from all castes, as observed in one village.  But still labourers of the various castes, including scheduled caste people, did not work under a lower caste maistry, since they do not take food from them.  That the middlemen had made money was indicated by their assets and consumption patterns, such as owning a tractor and a colour television and getting urban convent education for their children.  For instance  

Ram Reddy (42 years old) has been a maistry for the past decade.  He has 25 acres of land, but only 5 acres is cultivated due to lack of water.  He owns a pucca (solid) house and educates his two sons in a nearby town.  He shied away from revealing his earnings but felt it was the group maistry who made a lot of money.  According to him, he takes the risk of picking up the labourers, organising them, supervising them, and bearing all sorts of headaches in managing them.  He revealed his ambition of becoming a group maistry.  He is trying to make a deal with a company.21 

The migration histories of the sample contract labour migrants are testimonies to the existence of the contract system for more than three decades.  Most of these people had worked in more than six states of India each. 

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

Interlinked modes of exploitation.  The Mahabubnagar agriculture is typically characterised by intermittent spells of drought throwing up a peculiar situation.  Maistries and group maistries, whilst growing into a class of employers, have begun to emerge as monopolistic agents in the credit markets that trap the hapless poor.  They are also monopsonistic agents for employment in a virtually paralysed village economy.  This situation has led to interlocked markets for credit and labour.  Indeed, the interlocking through personalised contracts creates a monopoly with a differentiated product (the relationship).  The migrant labourers’ situation is a variant on Bhaduri’s model (1973, 1983).  In his general model of landlord-tenant relations, the rent-cum-interest on land is fixed by the landlord such that the tenants’ earnings are less than subsistence.  They then borrow from the monopolistic lender (landlord), hence the interlocking of modes of exploitation.  In a similar way, the migrants’ wage plus food is fixed at a level below subsistence, so they keep borrowing.  However, the maistries’ commission rate is so high that even the interest on their investment can be covered without explicitly charging labourers interest. 

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

Bakkayya (25 years old) is an attached labourer and middle peasant, for an annual wage Rs. 1800, without food, paid in advance.  Days of absence were accounted at the rate of the local daily wage, and had to be redeemed through labour.  Two years back due to severe drought his employer relieved him of work.  Then he has taken an advance from a maistry and worked for one season.  He did not go again since then. He owes some Rs. 400 to the maistry, but has not been pressed for the repayment.  But the respondent felt if his landlord cannot provide more money he may be forced to take further loans from the maistry.22  

The legitimisation process is facilitated by the caste system, as lower caste persons are expected to conform to their subjugation.  Lerche has begun to theorise the caste-class linkage in a way that differs from the purely class-based Marxist approach of Byres (1981) and Brass (1995).  For many, repudiation of a ‘patron’ would only worsen their situation.  Maistries from lower castes prove no better.  Although their strategies of controlling and oppressing differ slightly from the others', they lead similarly to value-exploitation.  The ongoing social processes of dependence and resistance may be understood better through a typology that contrasts interpersonal elements with those based on structural locations (see Table 1).  

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

The prevailing contract system of Palamuuru labour can be analysed from within both marxist and neoclassical frameworks (Olsen, 1996).  While the marxists have tried to incorporate its exploitativeness into models, and to devise strategies for radical social transformation, the apolitical economists refuse to recognise unfreedom and oppression.  Some economists have even justified bondage by identifying reasons for workers to ‘freely choose’ this condition (Srinivasan, 1989).  

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: 


People starve: their survivors think in new ways about the market.  People are imprisoned: in prison they meditate in new ways about the law.  In the face of such general experiences old conceptual systems may crumble and new problematics insist upon their presence. (Thompson, 1978: 9)     


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). 
back to text  

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.  
back to text 

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.  
back to text  

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  


Agarwal, Bina. (1998). "Disinherited Peasants, Disadvantaged Workers: A Gender Perspective on Land and Livelihood," in Economic and Political Weekly. 28 March. Vol. 33, No. 13. A2-A28.  
back to text 

Bagchi, A.K. (1975). "Relation of Agriculture to Industry in the Context of South Asia," in Frontier. Autumn. 22-24.  

Balagopal, K. (1988). Probings in the Political Economy of Agrarian Classes and Conflicts. Hyderabad: Perspectives Press.   back to text  

Bandyopadyaya. (1976). "Vettichakiri in M.K.," in National Labour Institute Bulletin. No. 2 (3).  

Bardhan, P. K., ed. (1989). The Economic Theory of Agrarian Institutions. Oxford: Clarendon Press.  

Barucha, S.M. (1937). Agricultural Indebtedness in H.E.H. Nizam Dominion. Hyderabad: Andhra Pradesh Archives.  

Basu, Kaushik. (1983). "The Emergence of Isolation and Interlinkage in Rural Markets," Oxford Economic Papers. No. 35. 262-280.   back to text  

Basu, Kaushik. (1986). "One Kind of Power," Oxford Economic Papers. No. 38. 259-282. 
back to text  

Bhaduri, Amit. (1973). "A Study in Agricultural Backwardness Under Semi-Feudalism," in Economic Journal. March. 120-37.   back to text  

Bhaduri, Amit. (1983). The Economic Structure of Backward Agriculture. Delhi: Macmillan. 
back to text  

Bhaduri, Amit. (1986). "Forced Commerce and Agrarian Growth," in World Development. 14:2. 267-272.  

Bhaduri, A. (1977). "On the Formation of Usurious Interest Rates in Backward Agriculture," in Cambridge Journal of Economics. No. 1. 341-352.   back to text  

Bhalla, A.S., et al, eds. (1993). Images of Rural India in Twentieth Century. Delhi: Oxford University Press.  

Bharadwaj, Krishna. (1985). "A View on Commercialisation in Indian Agriculture and Development of Capitalism," in Journal of Peasant Studies. Vol. 12, No. 4. 494-519.   back to text  

Bharadwaj, Krishna, and P.K. Das. (1975). "Tenurial Conditions and Modes of Exploitation," in Economic and Political Weekly. June. Vol. 10. A49-55.  

Brass, Tom. (1986). "The Elementary Strictures of Kinship: Unfree Relations and the Production of Commodities," in Social Analysis. No. 20.   back to text  

Brass, Tom. (1990). "Class Struggle and Deproletarianisation of Agricultural Labour in Haryana (India)," in Journal of Peasant Studies. Vol. 18, No. 1. 36-67.   back to text  

Brass, Tom. (1991). "Market Essentialism and the Impermissibility of Unfree Labour: A Reply to Shlomowitz," in Slavery and Abolition. Vol. 12, No. 3. 225-244.  

Brass, Tom. (1995). "Unfree Labour and Agrarian Change: A Different View," in Economic and Political Weekly. 1 April. 697-699.   back to text  

Brass, Tom. (1997a). "Some Observations on Unfree Labour, Capitalist Restructuring and Deproletarianisation," in Brass and van der Linden, eds. (1998). 57-76.   back to text  

Brass, Tom. (1997b). "Introduction," in Brass and van der Linden, eds. (1998). 11-44.   back to text  

Brass, Tom, and Henry Bernstein. (1992). "Introduction: Proletarianisation and Deproletarianisation on the Colonial Plantations," in Journal of Peasant Studies. 19. 1-40.   back to text  

Brass, Tom, and Marcel van der Linden, eds. (1998). Free and Unfree Labour: The Debate Continues. Berlin and Paris: Peter Lang AG.   back to text  

Breman, Jan. (1984). Of Peasants, Paupers and Migrants. New Delhi: Oxford University Press.  

Chakravarty, U. (1985). "Of Dasas and Karmakaras: Servile Labour in Ancient India," in Patnaik and Dingwaney, eds. (1985). 35-75   back to text  

Dingwaney, Manjari. (1985). "Unredeemed Promises: The Law and Servitude," in Patnaik and Dingwaney, eds. (1985). 283-347.  

Fay, Brian. (1987). Critical Social Science: Liberation and its Limits. Oxford: Polity.   back to text  

Government of Andhra Pradesh, Bureau of Economics and Statistics (various years). Handbook of Statistics, Mahabuubnagar District, Hyderabad.   back to text  

Grossman, Jonathan. (1998). "The Right to Strike and Worker Freedom in and beyond Apartheid," in Brass and van der Linden, eds. (1998).   back to text  

Harriss, J. (1982). Capitalism and Peasant Farming: Agrarian Structure and Ideology in Northern Tamil Nadu. Bombay.   back to text  

Harriss-White, B. (1996). A Political Economy of Agricultural Markets in South India: Masters of the Countryside. New Delhi: Sage.   back to text  

H.E.H. Nizam Dominion. (1939). The Report on the History of Nizamsagar Project. Hyderabad, Deccan, Public Works Department. (Andhra Pradesh Archives, Hyderabad).   back to text  

Himmelweit, S. (1995). "The Discovery of ‘Unpaid Work’: The Social Consequences of the Expansion of ‘Work’," in Feminist Economics. Vol. 1, No. 2. 1-20.   back to text  

Hjejle, Benedicte. (1967). "Slavery and Agricultural Bondage in South India in the Nineteenth Century," in Scandinavian Economic History Review. Vol. XI, Nos. 1-2.   back to text  

Hodgson, Geoffrey. (1982). Capitalism, Value and Exploitation. London: Martin Robertson. 
back to text  

Hodgson, Geoffrey M. (1989). "Institutional Economic Theory: the Old Versus the New," in Review of Political Economy. Vol. 1, No. 3. 249-269. 

Hodgson, Geoffrey M. (1993). "Institutional Economics: Surveying the 'Old' and the 'New'," in Economics and Evolution: Bringing Life Back into Economics. Cambridge, UK: Polity Press. Originally published in Metroeconomica. Vol. 44, No. 1, 1993. 1-28.   back to text  

Hoff, K. and J. Stiglitz. (1990). "Imperfect Information and Rural Credit Markets: Puzzles and Policy Perspectives," in World Bank Economic Review. Vol. 4, No. 3. 235-250.   back to text  

Jodhka, Surinder Singh. (1994). "Agrarian Change and Attached Labour: Emerging Patterns in Haryana Agriculture," in Economic and Political Weekly. 24 September. Vol. 29, No. 39.  
back to text 

Kabeer, N. (1994). Reversed Realities: Gender Hierarchies in Development Thought. London: Verso, and Delhi: Kali for Women.   back to text  

Kalpagam, U. (1994). Labour & Gender: Survival in Urban India. Delhi: Sage.   back to text  

Kapadia, Karen. (1992). "Every Blade of Green: Landless Women Labourers, Production and Reproduction in South India," in Indian Journal of Labour Economics. 35:3. 266-276.   back to text  

Kapadia, Karen. (1995). "The Profitability of Bonded Labour: The Gem-Cutting Industry in Rural South India," in Journal of Peasant Studies. 22:3, April. 446-483.   back to text  

Kerr, Ian J. (1998). "Free or Unfree? Railway Construction Labour in Nineteenth Century India," in Brass and van der Linden, eds. (1998).   back to text  

Kosambi.D.D. (1956). "On the Development of Feudalism in India," in Journal of Bombay Branch of Royal Asiatic Society. 31/32. 258-69.   back to text  

Krishnaiah, M. (1998). "Regular Farm Labour System in Semi-Arid Areas: Emerging Patterns in Andhra Pradesh," in Economic and Political Weekly. 28 March. A20-A28.  

Kulke, Hermann, ed. (1997). The State in India 1000-1700. Delhi: Oxford University Press.  

Kumar, Dharma. (1967). Labour and Caste in South India: Agriculture in Madras Presidency. London: Cambridge University Press.  

Labour Bureau. "Bonded Labour Abolition Act 1976," in Labour Year Book. Shimla. 1-5.  

Lerche, Jens. (1998). "Agricultural Labourers, the State and Agrarian Transition in Uttar Pradesh," in Economic and Political Weekly. 28 March. A29-A35.   back to text  

Lerche, Jens. (1995). "Is Bonded Labour a Bound Category? Reconceptualising Agrarian Conflict in India," in Journal of Peasant Studies. 22:3, April. 484-515.   back to text  

Miles, Robert. (1987). Capitalism and Unfree Labour: Anomaly or Necessity?. London: Tavistock.  back to text  

Mohan Rao, J. (1999). "Agrarian Power and Unfree Labour," in Journal of Peasant Studies. 26: 2/3. 242-262.  

Olsen, Wendy K. (1996). "Marxist and Neo-Classical Approaches to Unfree Labour in India," in Brass and van der Linden, eds. (1998). 379-404.   back to text  

Olsen, Wendy K. (1998). "Paradigms in the Analysis of Credit Structures and Discourses in South Indian Banking," Working Paper No. 5, September. University of Bradford, Graduate School of Social Sciences and Humanities.   back to text  

Patnaik, Utsa. (1983). Peasant Differetiation. New Delhi: Oxford University Press.   back to text  

Patnaik, Utsa, and Manjari Dingwaney, eds. (1985). Chains of Servitude: Bondage and Slavery In India. New Delhi: Sangam Publishing.   back to text  

Pradan, H.Pradhan. (1979). "Semi-feudalism: The Basic Constraints of Indian Agriculture," in Arvind N. Das and V. Nilkanth, eds. Agrarian Relations in India. New Delhi.  

Prakash, Gyan. (1990). Bonded Histories: Genealogies of Labor Servitude in Colonial India. Cambridge: Cambridge University Press.   back to text  

Radhakrishna, R., et al. (1987). "A Study of Poverty Levels: Inter-District Analysis," Working Paper No. 431. Centre for Economic and Social Studies, Hyderabad.   back to text  

Ramachandran, V.K. (1990). Wage Labour and Unfreedom: An Indian Case Study. Oxford: Oxford University Press.   back to text  

Ramana Murthy, R. V. (1991). "Seasonal Labour Migration In Semi-Arid Areas: A Case Study of Palamuuru Labour," M.Phil. thesis, Department of Economics, University of Hyderabad. 
back to text  

Rammohan, C. (1987). Palamuuru Labour (Telugu). Hyderabad: VIRASAM (Revolutionary Writers Association).   

Rao, R.S. (1995). Towards Understanding Semi-Feudal Semi-Colonial Society. Hyderabad: Perspectives Press. Series title: D. Narasimha Reddy, ed. Studies in Political Economy. Department of Economics, University of Hyderabad.   back to text  

Rao, Usha. (1994). Palamoor Labour: A Study of Migrant Labour in Mahabubnagar District. C.D. Deshmukh Impact Centre, Council For Social Development, Hyderabad.   back to text  

Ravinder, A. (1989). "Labour Migration: A Dimension of Poverty," unpublished M.Phil. thesis, Department of Economics, Osmania University, Hyderabad.   back to text  

Reddy, D. Narasimha. (1990). Rural Migrant Labour in Andhra Pradesh. Report submitted to the National Commission on Rural Labour, Government of India.   back to text  

Saradamoni, Kunjuleks. (1973). "Agrestic Servitude in Kerala in the Nineteenth Century Century," in Indian Economic and Social History Review. 371-385.   back to text  

Saradamoni, Kunjuleks. (1980). Emergence of a Slave Caste: The Pulayyas of Kerala. New Delhi: People’s Publishing House.   back to text  

Sarkar, T. (1985). "Bondage In Colonial Context," in Patnaik and Dingwaney, eds. (1985). 97-126.   back to text  

Sharma, R.S. (1956). "The Origins of Feudalism in India (c.AD 400-650)," in JESHO. 1. 297-328.   

Sinha, Shantha. (1993). "Changing Landlord-Labour Relationships," in Bhalla, A.S., et al, eds. (1993).   

Srinivasan, T.N. (1989). "On Choice Among Creditors and Bonded Labour Contracts," in P. K. Bardhan, ed. (1989). 203-220.   back to text  

Srivastava, Ravi. (1989). "Interlinked Modes of Exploitation in Indian Agriculture During Transition: A Case Study," in Journal of Peasant Studies. Vol. 16, No. 4. 493-522.   back to text  

Standing, Guy. (1981). "Migration and Modes of Exploitation: Social Origins of Immobility and Mobility," in Journal of Peasant Studies. Vol. 8, No. 2. 173-211.   

Stein, Burton. (1980). Peasant State and Society in Medieval in South India. Delhi: Oxford University Press.   

Subrahmaniam, Rama Raju, and Thimma Reddy. (1994). Bonded Labour in Andhra Pradesh (A Study in Medak District). Hyderabad: Centre for Economic and Social Studies.   back to text  

Thapar, Romila. (1960). A History of India - Vol. 1. Harmondsworth: Penguin.   

Thompson, E.P. (1978). The Poverty of Theory and Other Essays. London: Merlin.   back to text  

Unni, Jeemol. (1998). "Non-Agricultural Employment and Poverty in Rural India: A Review of Evidence," in Economic and Political Weekly. 28 March. A36-A44.   

Venkateswarlu, D. (1997). Ph.D. Dissertation, Department of Political Science, University of Hyderabad.   back to text  

Walker, T.S., and J.G. Ryan. (1990). Village and Household Economies in India's Semi-arid Tropics. Baltimore and London: Johns Hopkins University Press.   back to text