Casualisation of workforce

Also called: Casualisation · Topic: Employment, Unemployment and Informalisation · NCERT: Class 11, Ch 5 "Rural Development"; Class 11, Ch 6 "Employment: Growth, Informalisation and Other Issues"

Meaning

Casualisation of the workforce means workers move out of self-employment (running their own farm or business) or regular salaried jobs and into casual wage work. Casual wage work is daily or short-term work, paid by the day or by the task, with no promise of work tomorrow.

It matters because casual workers are highly vulnerable. They have no fixed income, no job security and usually no social security. So a rise in casualisation means work is becoming less secure, even when the number of jobs stays the same.

Formula: share of casual workers (%) = (casual workers ÷ total workers) × 100

Explanation

The three statuses of work (NSSO/PLFS classification)

Casualisation is measured by looking at which of three groups workers belong to:

• Self-employed: the worker runs their own farm or business, for example a farmer or a shopkeeper.
• Regular wage/salaried: the worker gets a salary on a regular basis from one employer.
• Casual wage labour: the worker is paid a daily or periodic wage for work that is not regular.

When the share of the third group rises and the first two shrink, the workforce is casualising.

Worked example:

• An economy has 100 crore workers, and 20 crore of them are casual.
• Casual share = 20 ÷ 100 × 100 = 20%.
• If next year 25 crore out of 100 crore are casual, the share rises to 25%. That is casualisation.

Why casual work is risky: income is not the same as security

Class 11 NCERT asks two questions:

• A marginal farmer (a farmer with less than 1 hectare of land) becomes a full-time labourer. Is the farmer happier?
• A permanent pharma worker becomes a daily-wage labourer. Is that worker happier, even if daily earnings rise?

NCERT's answer is no. A higher daily wage does not make up for losing:

• a steady income (the pay is there only on days when work is found);
• an asset (the farmer loses land, which was a safety net);
• job security and social benefits.

What pushes workers into casual work

• Closure of formal units:
• Mills close → permanent workers lose their jobs → they take daily or piece work to survive.

• Example (Box 6.2, Ahmedabad): over 80,000 permanent and 50,000 non-permanent workers lost their jobs after mill closures that began in the early 1980s.

• Contract labour:

• Firms hire workers through a contractor instead of keeping them on their own rolls.

• These workers get lower wages and little job security.

• Outsourcing:

• Big firms send work out as piece-rate jobs (pay per piece made, not per day) to tiny units or to homes.

• The big firm saves on wages and does not have to give social security.

• Distress in farming:

• A small farm cannot support the family → the farmer sells or leaves the land → the farmer becomes a daily labourer.

In India

• Who measures it: the NSSO surveys and now the PLFS (Periodic Labour Force Survey) sort workers into self-employed, regular and casual.
• The real trend (NCERT Table 6.3):
• The casual share peaked at 31.8% in 1993-94.
• It fell to 19.9% by 2023-24.

• Class 11 text says people have moved into casual work "over the last five decades". But its own table shows the trend has reversed since the 1990s. For the exam, quote the data, not the old sentence.

• Security has not improved as much as the fall suggests:

• About 89% of workers were informal in 2019-20.

• India has more than 50 crore workers, and almost 90% of them are in the unorganised sector (2025) [2].

• Laws behind it:

• The Contract Labour (Regulation and Abolition) Act, 1970 is now part of the Occupational Safety, Health and Working Conditions Code, 2020, which merges 13 laws [2].
• The Code on Social Security, 2020 removes the minimum service rule for gratuity (a lump sum paid when a worker leaves after long service) for fixed-term employees. They get the same social security as permanent staff [2].
• e-Shram (launched 2021) is a national database of unorganised workers, including casual labourers. It gives each worker a Universal Account Number (UAN) on a self-declaration basis [3]. Registrations passed 30.95 crore by 22 July 2025 [3].

Don't confuse with

• Informalisation: casualisation is about the type of work status (moving into daily-wage work). Informalisation is about the quality of jobs: workers lose contracts and social security. A regular salaried worker with no PF or contract is informal but not casual.
• Informal sector vs informal employment: the informal sector is defined by the enterprise (ILO 15th ICLS, 1993). Informal employment is defined by the job (ILO 17th ICLS, 2003) [4]. Casualisation is defined by employment status (self-employed / regular / casual).
• Unemployment: a casual worker is employed, just insecurely. Casualisation changes the kind of work people do, not whether they have work.
• Formalisation: the opposite direction. Workers and firms move into the registered, taxed and regulated economy, with a written contract and social security (PF, pension, health cover).

Prelims Hooks

• Casualisation = a shift from self-employment or regular salaried work into casual wage labour (daily or task-based pay, no guarantee of work tomorrow).
• Casual share of workers peaked at 31.8% (1993-94) and fell to 19.9% (2023-24). The statement "casualisation has risen steadily for five decades" is false.
• The three NSSO/PLFS worker statuses are self-employed, regular wage/salaried and casual wage labour.
• Trap: a fall in the casual share does not mean a fall in informality. About 89% of workers were still informal in 2019-20.
• The Contract Labour Act, 1970 is now part of the OSH Code, 2020 (merges 13 laws). In all, 29 laws were merged into 4 Labour Codes [2].
• e-Shram (2021) gives unorganised workers a UAN on self-declaration and passed 30.95 crore registrations (July 2025) [3].

Mains Points

• Casualisation reversed, but security did not improve:
• The casual share fell from 31.8% (1993-94) to 19.9% (2023-24).
• But informality stayed near 90% [2], because many "regular" and self-employed jobs still lack contracts and social security.

• Answers should separate the status of work from the quality of work. The goal is decent work (ILO), whose four pillars are employment creation, rights at work, social protection and social dialogue, linked to SDG 8 [4].

• The human cost goes beyond income (GS-I/GS-II link):

• In Ahmedabad, 60+ mills with 1,50,000 workers closed. This led to poverty, children leaving school to work, alcoholism, suicides and communal riots.
• The "balance of power" at home changed: the jobless mill worker peeled garlic while his wife earned by rolling beedis.

• Class 10 adds that SC, ST and backward communities are concentrated in irregular, low-paid unorganised work. So protecting casual workers is also a social justice issue.

• Policy response: flexibility vs protection:

• Firms use contract labour, fixed-term jobs and outsourcing to cut costs and avoid labour laws.
• The Labour Codes try to balance this. Fixed-term staff get social security equal to permanent staff, and ESIC is opened to unorganised, gig and platform workers [2].
• A balanced answer should suggest simple compliance rules, state-paid contributions for poor workers, and benefits that move with the worker through the UAN.

Related concepts

• Informalisation
• Informalisation of the organised sector
• Contract labour
• Social discrimination in the labour market
• Informal employment
• Formal employment
• Formalisation of the economy
• Decent work

Read more

• Casualisation, informalisation and formalisation