On This Page. Background BLS has developed estimates of employment and hourly compensation costs in India's organized manufacturing sector. Compensation costs for India are not directly comparable with the data for the other countries published by BLS (see Data Features section below). A complete discussion of data comparability issues and methods used to calculate the estimates can be found in the May 2010 Monthly Labor Review article.

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The 'organized sector' refers to the portion of India's manufacturing activity that is formally registered with state governments, and is thus subject to regulation. Data Features It is important to note the following aspects of Indian source data that limit comparability with BLS estimates of compensation in other countries:. Data treatment India’s central statistics office does not adjust data from its Annual Survey of Industries (ASI), the source of the BLS estimates, to correct for missing, incomplete, or incorrect data. In addition, penalties for noncompliance are rarely enforced. The data are thus less reliable than survey data that have been adjusted by the receiving statistical agency, or than data that are weighted to be representative of the entire survey population. Organized vs. Unorganized sector These data cover India's organized manufacturing sector only, that is, the portion of India's manufacturing activity that is formally registered with state governments, and is thus subject to regulation.

The unorganized sector is not regulated, and little data exist for its enterprises. The organized sector produces two-thirds of India's manufacturing output; however, close to 80 percent of Indian manufacturing employees work in the unorganized sector.

The lack of information on the unorganized sector means that a large segment of the manufacturing workforce is not represented in these data. Contract labor Contract workers, who are cheaper to employ because they are often not provided with benefits such as social insurance and paid vacation, make up a significant and growing portion of manufacturing workers in India (see ). Data do not exist to remove contract workers' earnings from the earnings of other workers, as BLS does for its main series; as a result, it is likely that the labor cost estimates are lower than they would be if they excluded contract workers. Hours Hours actually worked are not recorded by the ASI; thus, it is not clear how much work occurs 'off the books.' Information gained from personal interviews indicates that overtime work is common, but that it is not always compensated at the legally required rate of two times the usual salary. Although earnings, hours, and employment that are not documented by employers likely affect the hourly compensation estimates presented below, no adjustments have been made because the magnitude of the unrecorded data is not known.

Sector-level Compensation and Employment Chart 1. Hourly compensation costs have grown steadily in both rupees and in U.S. Dollars, but the rate of increase for production workers has been slower than the rate for all manufacturing employees.

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Average Hourly Compensation Costs in India's Organized Manufacturing Sector, 1999-2010 YEAR Average hourly earnings in rupees (hourly pay for time worked) Hourly compensation in rupees Hourly Compensation in U.S.

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