Indian Industrialization and the Future of the Working Class

by Supriya Roychowdhury

I’m absolutely delighted to be given a chance to pay my personal tribute to Shripad Dange. Part of my PhD thesis was on the textile industry in Maharashtra, and I was doing fieldwork in Mumbai in the ’90s, when Shripad Dange was no longer alive. But his name was a vibrant presence in the industry to all whom I spoke to.

And he actually wrote the first report on the rights of textile workers, which anyone who studies the textile industry in India views almost as a bible. Dange was one of the founders of the Communist Party of India (CPI), and he was a typical politician of those times. He joined the nationalist movement with Gandhi, but he later turned to leftist organizations. And his long political career—he had thirteen years as a political prisoner—and, particularly the last few decades, were marked by many vicissitudes. Unfortunately, towards the end, he actually had to leave the CPI, of which he was the founder and one of the foremost leaders. For me, what is represented through Dange’s life is that he actually represented the quintessential left politician of those times, moving very effectively between the trade union movement and the political party, that is, the CPI, of which he was a leader. But he was also the foremost founder of the trade union movement in the Maharashtra textile industry before he formed the CPI. And in fact, two of his most successful elections to the Lok Sabha, from the Bombay Central constituency, was the direct effect of his work amongst textile workers.

Why is this important? Because this movement from trade unionism to political parties is something which seems to have almost disappeared from our political world today. Political party leaders can no longer think of the working class as a constituency since they must speak to wider audiences. And in the process, any discourse or narrative on the working class is obviously dissolved to a great extent.

We don’t really have the construction, or the political construction, of a working-class narrative. Several of us are trying—academics, trade unionists, politicians on the ground. But at the level of the nation, there isn’t a working-class narrative anymore. On their part, this vacuum has also affected trade unions, because trade unions speak for a smaller constituency now, that is, the organized working class. And they don’t therefore have a political platform on which they can stand.

And many trade unions have actually moved from being ideologically inspired organizations to very professional outfits who are pursuing very specific, limited objectives within the framework of workers’ rights. As things are, the platform from which they are speaking gives them no scope to talk about the larger working class as such. So the trade union movement is localized in space and time.

This brings me to the topic which is industrialization in India and the future of the working class. And I think one has to remind oneself of the deceleration of the communist movement, which can be a starting point actually for looking at the process of industrialization in India.

As of the 2024 elections, the parliamentary seats for both the CPI and the CPM have been reduced to, I think, two and four respectively. And there has been a steady deceleration of this. Of course there is a groundswell of ideology and activism inspired by socialist ideas, but we’re not going into that. We’re looking at more national figures—in that sense, if you look at the performance of the CPI and the CPM, they are not anymore national players.

Historically, communist or leftist parties have been closely aligned to industrial working classes through a network of trade unions. So one way of looking at the deceleration of the communist parties and at the decline of leftist ideas and ideologies in India is to look at what has happened to the industrial working class itself. Borrowing from the experience of industrially developed countries, the genesis of the modern industrial class happens through the transfers of large numbers of people from farms to factories. And in economics, this is known as structural transformation: that is, the shift from farms to factories, from country or rural areas to urban areas, from informal work to formal work.

This is the standard trajectory that the developed countries have followed, and even late developers like Japan, South Korea, etc., i.e. East Asian countries have followed this trajectory. Now, in India, it’s a very stark and staring feature of our development that this expected transfer from agriculture to industry, from farm to factory, has not really happened. It is true that since economic liberalization, there is fast growth in GDP, there is industrial development, and there is a lot of wealth generation. We are going to be the third largest economy very soon. We are going to be the economic powerhouse of the future. However, we need to remind ourselves that the largest number of working people are still in the agricultural sector despite the fact that agriculture’s share in GDP has declined systematically. It is now only 14 percent. There are successive agrarian crises reflected in rural indebtedness, farmer suicides, lack of public investment in agriculture, and very low and very slow development of large swathes of the country’s rural areas. About 44 to 46 percent of the working population is still employed in agriculture. Now it is expected that in the course of development, industry’s share in GDP will exceed that of agriculture because of higher productivity. And this has actually happened in India. So industry’s share in GDP is 25 percent as compared to agriculture’s 14 percent.

But the percentage of people who find employment in industry is actually very low. It is 25 percent. If you leave out the construction sector and you look only at manufacturing—construction is non-manufacturing—then it is only 11 percent. And there have been steady decline in the number of people who can find jobs in the manufacturing sector, particularly in organized manufacturing. On the other hand, there is, of course, the service sector. The service sector now leads development and economic growth. Fifty-five percent of GDP is accounted for by the service sector. But the growth of employment in services has been quite low in proportion. It is now only 31 percent, having risen from about 20–23 percent in 2013. There is obviously a great disjuncture between output and generation of employment.

In 2009, when the first Urban Poverty Report came out, one of our leading economists, S. A. Hashim said that the reason that agriculture continues to harbour large numbers of people, despite the fact that it does not have the space to do so, is a very complex problem, but one that is closely related to the kind of urban and industrial development that has happened in cities. We therefore need to look at what the service sector offers. The service sector offers highly paid jobs to technically qualified people. And there has been a spillover into other service sectors like hospitality, maintenance, security, housekeeping, and so on and so forth.There has been a huge boom in employment in all of these sectors. But these jobs are all typically unprotected and unregulated. They hover around the minimum wage. There is no security of tenure. So the attraction of those in rural areas seeking jobs in urban areas for the service sector is actually very limited. This is part of the reason why we are not seeing a major transfer of the job-seeking population from rural to urban areas.

Mainly what I wanted to emphasize is that in the process of economic growth and development, typically large numbers of unskilled or even semi-skilled labour look for factory jobs. And that is where the Indian economy has, to a certain extent, failed these job seekers. There are a large number of surveys but just taking one particular survey, the Enterprise and Establishment survey during the period 2017–18 to 2022–23, the loss of jobs in manufacturing was in the order of four million.

The policy response to this seeming crisis in jobs has been that governments have come up repeatedly with industrial policies with a focus on creating employment. When the UPA government was there, we had the National Manufacturing Policy of 2011, which aimed to create 100 million jobs in the sector by 2022. It didn’t happen. The NDA government, as we all know, has this paradigm of Make in India. Very recently, in 2025, the National Manufacturing Mission has re-emphasized the goal of boosting the sector with a projected outlay of almost 200 lakh crores in sectors like automobiles, electronics, pharmaceuticals, and so on and so forth.

Now making policy is one thing. Policies, as we know, are often driven by political imperatives. Often it is a reaction or a response to data coming out on joblessness. As distinguished from policies, there is the question of a policy paradigm. I want to emphasize that the overall policy paradigm post–economic liberalization continues to be marked by features which are not necessarily conducive to creating jobs in the organized factory sector. Essentially, liberalization, which came in the 1990s, meant that the state was withdrawing from its role as leading industrial development through large public sectors and would increasingly depend on private capital as the driver of investment in the industrialization project.

So the state facilitated both domestic and foreign direct investment such that private capital could become the main driver of industrial development. The overall aim was to make Indian industry competitive at the global level. If this was the aim—that is, globally competitive industry—obviously the shift to capital-intensive and technology-intensive industrialization, rather than labour-intensive, was the way to go. One can see this reflected in particular policies.

Every policy is accompanied by an announcement that it will lead to greater employment. However, when you see what is happening to specific sectors, it’s a different story. So, this is a context where jobs are disappearing because of automation, because of increasing capital intensity and knowledge and technology intensity. Here, the ready-made garment export industry, connected to global players, large global companies, multinational companies which have invested in India for the production of ready-made garments, stands out because it is predominantly labour intensive and is offering employment to unskilled, semi-skilled job seekers, particularly to women.

Many of the women employed in this sector are rural, semi-rural, unskilled women with barely high school education, who are looking for employment because their sources of income in the agricultural sector have all but dried up. We have been studying the ready-made garment industry for many years, particularly in Karnataka, through successive surveys.

Around four to five lakh women employed in the garment sector in Bangalore. We have found low wages and very harsh working conditions. There is some social insurance, but no tenure security. There is no written job contract. Loss of jobs can happen any time. These features have become the main instrument in the hands of management and shop-floor supervisors in garment factories in Bangalore, who use coercion as an instrument of production.

These industries are also very valued in the eyes of the state as major foreign exchange earners. However, in terms of the workforce, they have created a footloose workforce, who move in and out of the industry or in and out of different factories in the industry itself in search of better working conditions or even in search of just 500 rupees more. If another factory or another sector pays more, they move out.

We found that the only option actually available for garment-sector workers is domestic work, which is not much better. But many move out to domestic service because it offers them a more relaxed way of making less money. So this footloose workforce actually offers a very fragile and unstable basis on which to organize trade union activities. This is also a workforce which, because of very low salaries, has a lot of indebtedness. We found that after working for 15 years women are getting as low as 10,000 or 12,000 per month, so there are no savings.

We also found that after retirement a large majority of the women are forced to go back to their rural areas of origin. And so this industry, in a sense, questions the whole idea of urbanization. Because what is happening is that through foreign investment in garment exports these women are brought out of rural and semi-rural areas to provide labour for this highly profit-making industry.

This is what we call the informal in the formal, particularly in the garment sector. This is factory employment and there is a salaried wage and some social insurance. But as I have tried to explain, the basic parameters of formal employment are not there. And this particular sector, being part of the organized sector, bears some of the classic features of informal employment.

I now come to the question of how you represent workers’ rights, or who represents workers’ rights. In terms of a collective voice or collective organization, the problems which trade unions face is the shrinking of the organized sector. To mobilize and organize informal workers presents one of the most difficult and challenging tasks for trade unionists, because workers who do not have permanent or regular jobs fear termination if they engage with trade unions or in trade union activities. Hence, there is a low level of unionization in most sectors today. There is also a disconnect at the local level. Local-level trade unions are disconnected from larger national trade union federations.

State governments have responded with a whole range of welfare measures. You get free rations, free bus passes, free electricity, cash transfers to women, old-age widow pensions, and so on and so forth. Every government in every state has come up, almost competitively, with these welfare measures. And in a sense what these have done, these welfare provisions or social policies, is to dull the edge of want. In the process, what has happened is that the question of work, employment, livelihood, and income has even more receded into the background for the working class itself. So the demand is not for work and more income. The demand, or the expectation and the claim, is for social policies.

I would say at the end that the future possibly lies in organizations like the GATWU (Garment and Textile Workers Union). I have seen these kinds of grassroots trade unions struggling for over three decades in Bangalore and in other states. The script is written against them, but the struggle is very real and significant. In the struggle, one can actually see the opposed binaries of capital and labour working out. Furthermore, the challenge is often put forward by these trade unions to the state, because the state is a major stakeholder in industries like the garment industry. So they’re negotiating not only with capital—that is, the owners of the factories—but also in a very substantive way with the state, which is an important creator and participant in the minimum wage board.

I want to end this by going back to one of the lines which I read from a text of Shripad Dange, which is that when we think of labour, we have to think not only of the yesterday and of the today, but we have to think of the tomorrow. To think significantly of the tomorrow in India’s larger framework of industrialization and of the working class, I think there are two points which stand out.

One is that the state is obviously pursuing a model of economic growth which is based on the growth of the services sector. And one of the main questions which needs to be asked is: can the services sector lead development where the largest number of job seekers are unskilled or semi-skilled? And if indeed the service sector is leading economic growth, then what kind of regulations does the state need to put forward to protect those who are employed in the services sector?

The other important question is: can the state in a democratic framework be persuaded, or perhaps even forced, to provide a more substantive, a stronger regulatory framework as far as industry is concerned, or as far as the services are concerned?

On many of these points—whether we’re looking at the service sector or whether we’re looking at the governance system, the labour governance system—there is enormous scope for activism to work itself out. Because we cannot at the same time be talking about macro policies. Macro policies are not framed at the local level. Macro policies are framed in New Delhi, where larger economic interests are driving policy. These interests are international. These are large economic and industrial interests of industrialists who are deeply vested in a globally competitive economic policy regime. So those are not changes that, you know, local trade unions or even academics like us can be talking about.
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But we can certainly be talking about changes at these micro levels, where pressure can be brought about on states to provide a more supportive regulatory regime within the framework that exists.

This is a shortened and lightly edited version of a transcript from a talk given at Indian Institute of World Culture, Bangalore.
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Supriya Roychowdhury is Visiting Professor at the National Institute of Advanced Studies, Bangalore. Her book, “City of Shadows: Slums and Informal Work in Bangalore”, was published by Cambridge University Press in 2021.

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