Capital Corruption - Child Labour fuelling Black Money

28 June 2011

All talks between Anna’s civil society and the government on the issue of Lokpal have collapsed. Similarly, talks between Ramdev’s civil society and ministers on the issue of black money stashed in foreign banks took quite an ugly turn at Ramlila Maidan a few weeks ago. With Anna Hazare threatening to go on a hunger strike once again and Baba Ramdev announcing to continue his fight for bringing the black money back to the country, the battle lines have been drawn. These indeed are significant initiatives towards important issues, but amidst this entire high voltage drama revolving around corruption and black money not only have the fundamental issues confronting common people in this country been eclipsed but have also become so emotional that pertinent aspects related to the genesis of these evils have been largely ignored. Child Labour is one of such issues.   Illegal employment of children has emerged as a huge source of illicit earnings and corruption. According to the Census of India 2001, 1.27 crore children were working in various sectors across the country while the non-government organizations estimate the number of child labourers at 6 crore or nearly 6% of the total population of India.

In spite of the ambiguity in numbers, one thing is evident: Children are employed not just because of parental poverty, illiteracy, ignorance, failure of development and education programmes, but quite essentially due to the fact that employers benefit immensely from child labour as children come across as the cheapest option sometimes even for free. No factory, mine, or workshop owner dares to admit about employing children in their premises against pittance or no wage at all. They normally misappropriate their books of account and show a substantial amount of wage component factored into the production cost. This gap is the real issue. The presence of large number of child labourers in the country indicates unabated corruption and black money.

All work that is done by child labourers and the income thus generated goes unaccounted in a country's economy. Studies reveal that these 6 crore children assumingly work for approximately 200 days in a year on an average cost of Rs. 15 per child per day. This amounts to Rs. 18,000 crores in one year. Now, these 6 crore child labourers when substituted with 6 crores adult labourers would earn Rs. 1, 38,000 crores at minimal rate of an average floor wage of Rs. 115 per day per labourer for 200 days. This difference in the total earnings between the two scenarios works out to Rs. 1, 20,000 crores- which is solely a pool of black money.

This is a straight profit of Rs. 1,20,000 crore, which is a significant loss to the economy. The employer(s) should have legally and ideally paid this sum to the worker(s) but the employer(s) instead choose to employ docile, underpaid and overworked child labourers.

Part of this black money generated by employing child labour is used in bribing the law enforcement agencies and politicians. This is chronic corruption. This in turn leads to lax implementation of laws, i.e. poor or no inspection of the work premises, letting the employers Scott free with little or no penalties at all, etc. This subsequently propels child labour creating an unscrupulous vicious circle between child labour, black money and corruption.

In response to a question in the Parliament, the Government admitted that only 9% of employers of child labourers have so far been convicted since 2007. This conviction is in the form of a fine only. In spite of one year to three years imprisonment provisions in the laws related to Child Labour and Bonded Labour, unsurprisingly not even a single errant employer has been jailed so far.

The influence of black money generated through child labour is visible in those areas where child labour is endemic. Despite of the large scale production and even export of certain goods, these areas remain shockingly underdeveloped. In Mirzapur - Bhadohi belt of U.P, where the multi-million dollar carpet industry is concentrated, why is it that no major industrial development has been encouraged or agricultural reforms undertaken so far? Adult migration in search of livelihood to other cities is quite high as well.

Similarly, in Sivakasi, Tamil Nadu, a shocking revelation of jeopardizing a large irrigation project by the local politicians came into limelight a few years ago. The reason was obvious. When significant development takes place in an area, per capita income should accordingly increase and villagers should have no reason to send their children to work in the fire cracker or match-work industries. Tirupur in Tamil Nadu is popularly unpopular for employing large number of child labourers in its knitwear industry. Noyyal River in the city has turned completely toxic because of the industrial waste and effluents.

Although a more in-depth research is needed to further explain how the rightful wages of workers are plundered to create black money, one thing that has been proved and established is that “Child Labour is injurious to the health of the Economy”. Apart from gathering knowledge and corroborating evidence, this grave situation calls for devising new and efficient ways to act politically, administratively and legally against employers of child labourers in a different manner. Conventionally such employers are prosecuted only under the provisions of labour or juvenile laws, but in the light of black money they must be inclusively booked under finance and tax related crimes as well.

It would also be pertinent for civil society groups fighting against corruption and black money to broaden their horizon by relevantly including “elimination of child labour” in their agendas.