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Bonded Labour India | LawTeacher

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Prior to the early modern age, feudal and serfdom systems were the predominant political and economic systems in Europe. These systems were based on the holding of all land in fief or fee, and the resulting relation of lord to vassal, and was characterized by homage, legal and military service of tenants, and forfeiture. Many historians have argued that this system was also established in some Latin American countries, following European settlement.

A modernization of the feudal system was “peonage”, where debtors were bound in servitude to their creditors until their debts were paid. Although peons are only obliged to a creditor monetarily, it might be viewed that this relationship reduces personal autonomy.


Peonage is a system where laborers are bound in servitude until their debts are paid in full. Those bound by such a system are known, in the US, as peons. Employers may extend credit to laborers to buy from employer-owned stores at inflated prices. This method is a variation of the truck system (or company store system), in which workers are exploited by agreeing to work for an insufficient amount of goods and/or services. In these circumstances, peonage is a form of unfree or restricted or constrained labour. Such systems have existed in many places at many times throughout history.

Historical examples from International Arena

* In Colonial America, some settlers used indentured service to obtain passage or an initial settlement, then continued working independently after completing their bonded labor.

* The American South – Such a system was often used in the southern United States after the American Civil War where African-American and poor white farmers, known as sharecroppers, were often extended credit to purchase seed and supplies from the owner of the land they farmed and pay the owner in a share of the crop.

* In Peru a peonage system existed from the 1500s until land reform in the 1950s. One estate in Peru that existed from the late 1500s until it ended had up to 1,700 peons employed and had a jail. Peons were expected to work a minimum of three days a week for their landlord and more if necessary to complete assigned work. Workers were paid a symbolic 2 cents per year. Workers were unable to travel outside of their assigned lands without permission and were not allowed to organize any independent community activity.

Thousands of such laborers were sold into slavery during the West African slave trade and ended their lives working as slaves on the plantations in the New World. For this reason, Section 2 of the Slave Trade Act 1843 enacted by the British Parliament declared “persons holden in servitude as pledges for debt” to “be slaves or persons intended to be dealt with as slaves” for the purpose of the Slave Trade Act 1824 and the Slavery Abolition Act 1833.

It continued to be very common in Africa and China, but was suppressed by the authorities after the establishment of the People’s Republic of China. It persists in rural areas of India, Pakistan and Nepal.

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In Niger, where the practice of slavery was outlawed in 2003, a study found that almost 8% of the population are still slaves. Descent-based slavery, where generations of the same family are born into bondage, is traditionally practised by at least four of Niger’s eight ethnic groups. The slave masters are mostly from the nomadic tribes — the Tuareg, Fulani, Toubou and Arabs.

40 million people in India, most of them Dalits, are bonded workers, many working to pay off debts that were incurred generations ago. These figures are comparable to ones in Bolivia, Brazil, Peru and Philippines. There are no universally accepted figures for the number of bonded child labourers in India. Of 20 million bonded labourers in Pakistan 7.5 million are children. An estimated 496,000 children are in slavery in Bangladesh.


According to Anti-Slavery International, “A person enters debt bondage when their labor is demanded as a means of repayment of a loan, or of money given in advance. Usually, people are tricked or trapped into working for no pay or very little pay (in return for such a loan), in conditions which violate their human rights. Invariably, the value of the work done by a bonded laborer is greater that the original sum of money borrowed or advanced.”

According to the Anti-Slavery Society, pawnage or pawn slavery is a form of servitude akin to bonded labor under which the debtor provides another human being as security or collateral for the debt. Until the debt (including interest on it) is paid off, the creditor has the use of the labor of the pawn.

At international law

Debt bondage has been defined by the United Nations as a form of “modern day slavery” and is prohibited by international law. It is specifically dealt with by Article 1(a) of the United Nations 1956 Supplementary Convention on the Abolition of Slavery. It persists nonetheless especially in developing nations, which have few mechanisms for credit security or bankruptcy, and where fewer people hold formal title to land or possessions. According to some economists, for example Hernando de Soto, this is a major barrier to development in those countries – entrepreneurs do not dare take risks and cannot get credit because they hold no collateral and may burden families for generations to come.

Where children are forced to work because of debt bondage of the family, this is considered not only child labor, but a worst form of child labor in terms of the Worst Forms of Child Labour Convention, 1999 of the International Labour Organization.

Despite the UN prohibition, Anti-Slavery International estimates that “between 10 and 20 million people are being subjected to debt bondage today.”


The practice of bonded labour violates the following International Human Rights Conventions whereas India is a party to all of them and such is legally bound to comply with their terms. They are:

• Convention on the Suppression of Slave Trade and Slavery, 1926;

• Supplementary Convention on the Abolition of Slavery, the Slave Trade and Institutions and Practices Similar to Slavery Trade, 1956;

• Forced Labour Convention, 1930;

• International Covenant on Civil and Political Rights (ICCPR), 1966;

• International Covenant on Economic, Social and Cultural Rights (ECOSOC), 1966;

• Convention on the Rights of the Child (CRC), 1989


News media in western Europe regularly carry reports about one particular kind of debt bondage: women from Eastern Europe who are forced to work in prostitution as a way to pay off the “debt” they acquired when they were illegally smuggled to destinations in Western Europe. This form of debt bondage also takes place in other parts of the world, such as women moving from Southeast Asia or Latin America.[citation needed]


According to Marxist economists, debt bondage is characteristic of feudal economies, where families are considered the responsible unit for financial relationships, and where heirs continue to owe parents’ debts upon their deaths. Fully capitalist economies are characterized by the individual taking all responsibility, and such mechanisms as bankruptcy and inheritance taxes reducing creditors’ rights (while increasing the power of the state). Heirs are freed from the creditor, but at the cost of a drastically increased power accruing to the state itself.

Debt bondage is often a form of disguised slavery in which the subject is not legally owned, but is instead bound by a contract to perform labor to work off a debt, under terms that make it impossible to completely retire the debt and thereby escape from the contract

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Bonded labour is widely prevalent in many regions in India. The main feature of the system is that the debtor pledges his person or that a member of his family for a loan and is released on the repayment of the debt.

Bonded labour is referred to by different names in different regions. The Elayaperumal Committee mentions the following:

• Gothi in Orissa;

• Machindari in Madya Pradesh;

• Sagri in Rajasthan;

• Vet Begar and Salbandi in Maharastha;

• Jana, Manihi or Ijhari in Jammu and Kashmir;

• Jeetha in Mysore;

• Vetti in Tamil Nadu;

• Kamiya or Kuthiya in Chattisgarh.

In the beginning of the twentieth century the system combined the elements of exploitation, patronage and protection at least in some regions. But with increasing trend towards the money-economy and changes in the types of use to which agricultural land is put, the element of patronage disappeared and that of exploitation persisted.


Indian Constitution

Some related provision regarding to bonded labour, namely:

• Preamble: The Constitution of India guarantees all citizen social, economic and political justice, freedom of thought and expression, equality of status and opportunity and fraternity assuring dignity of the individual;

• Article 14, 15 and 16: These articles guarantee equality and equal treatment;

• Article 19(1) (g): The article guarantees freedom of trade and profession;

• Article 21: The article guarantees right to life and liberty;

• Article 23: Prohibition of traffic in human beings and forced labour – Traffic in human beings and begar and other similar forms of forced labour are prohibited and any contravention of this provision shall be an offence punishable in accordance with law. Nothing in this article shall prevent the State from imposing compulsory service for public purposes, and in imposing such service the State shall not make any discrimination on grounds only on religion, race, caste or class or any of them.

• Article 24: The article prohibits the employment of children whether as bonded labour or otherwise. Together, Article 23 and Article 24 are place under the heading “Right against Exploitation”, one of India’s constitutionally proclaimed fundamental rights.

• Directive Principles: Moreover, the Directive Principles directs the State to strive to secure, inter alia: (a) Just and human conditions of work (Article 42); (b) Educational and economic interest of the Scheduled Caste and Scheduled Tribe and other weaker section of the society (Article 46).

• Under Article 42. Provision for just and humane conditions of work and maternity relief – The State shall make provision for securing just and humane conditions of work and for maternity relief.

• Under Article 43. Living wage, etc. for workers – The State shall endeavour to secure, by suitable legislation or economic organization or in any other way, to all workers, agricultural, industrial or otherwise, work and living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities and, in particular the State shall endeavour to promote cottage industrial on an individual or co-operative basis in rural areas.

Indian Penal Code:

Under Section 374. Unlawful compulsory labour – Whoever unlawfully compels any person to labour against the will of that person, shall be punishable with imprisonment of either description for a term which may extend to one year, or with fine, or with both, also;

Children (Pledging of Labour) Act, 1933:

Children (Pledging of Labour) Act, 1933 says that unless there is something repugnant in the subject or context – “an agreement of pledging the labour of child” means an agreement written or oral, express or implied, whereby the parent or guardian of a child, in return for any payment or benefit received or to be received by him, undertakes to cause or allow the services of the child to be utilized in any employment. Provided that any agreement made without detriment to a child, and not made in consideration of any benefit other than reasonable wages to be paid for the child’s services and terminable at not more than a weeks notice, is not an agreement within the meaning of this definition. It also says that “Whoever, being the parent or guardian of a child, makes an agreement to pledge the labour of that child, shall be punished with fine which may extend up to fifty rupees”.

Based on those provisions, the system of bonded labour is thus totally incompatible with the aim of an egalitarian socio-economic order under the Constitution of India. The system is also an infringement of the basic human rights and destruction of the dignity of human labour.


In order to give effect to the constitutional prohibition of bonded labour as specified under Article 23 of Indian Constitution, Bonded Labour System (Abolition) Act was passed in 1976.

The Act was intended to free all bonded labourers, cancel their debts, establish rehabilitative measures and punish offender through imprisonment and fines. Implementation of the Act is the responsibility of the State Government.

Before going into the material parts and the implementation of the Act of 1976, let us observe a few developments in this area prior to the posing of the Act of 1976.


Prior to 1976, all efforts to tackle the issue of bonded labour were made at the regional level only. Before the Independence, there were two legislations, namely:

• The Bihar and Orissa Kamiauti Agreement Act, 1920;

• The Madhras Debt Bondage Abolition Regulation Act, 1940.

In the post independence period two legislation which had dealt with the abolition of bonded labour deserves mention are:

• The Orissa Debt Bondage Abolition Regulation, 1948;

• The Rajasthan Sagri System Abolition Act, 1961.

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In all, according to the Report of the Commission for SCs and STs 1964-11965, the net results of these enactments are failure. And in 1975, yet another attempt was made to abolish the system through India under the twenty-point programme.

Initially, the Bonded Labour System Ordinance was promulgated in 1975 and later this was enacted by the Parliament. Thus came into being the Bonded Labour System (Abolition) Act 1976.

Apart from the abovementioned the response of the judiciary has been positive but the disappointment comes when it is seen that till date there has not been a single case of conviction. Some of the major case laws related to the issue of bonded labour are:

• Dharambir v State (1979, where the Supreme Court held that prisoners are entitled to fair wages while doing work in the jails. The court held that free labour by prisoners is violative of Article 23 of the Constitution.

• PUDR v UOI (1982), where the Supreme Court held that giving wages below the limits set by the Minimum Wages Act would amount to forced labour.

• Bandhua Mukti Morcha v UOI (1984), wherethe Supreme Court issued directions for the release and rehabilitation of bonded labourers engaged in the mining operations.

• Neerja Chaudhary v State of M.P (1984), wherethe Supreme Court expressed anguish over the indifference of the government towards the rehabilitation of released bonded labourers.

• Shankar Mukherjee v UOI (1990), wherethe Supreme Court held that the Contract Labour Act, 1970 is a welfare legislation that must be interpreted liberally in favour of the labourers. The court further held that the system of contract labour is just another form of bonded labour and it should be abolished due to its baneful effect.

• PUCL v State of TN (2004) , where the Supreme Court appreciated the role of NGOs in the prevention of bonded labour and their emancipation. The court further observed that the approach of judiciary should be benevolent towards bonded labourers.



The open objectives of the Act are Identification, Release and Rehabilitation of Bonded Labourers. Let us analyse some of the silent features of the Act:

Firstly, it is about the awareness of the need for machinery relating to its implementation. Secondly, the Act envisage the Constitution of Vigillance Communities at the district and sub-divisioned level, to advise the District Magistrate and to ensure the implementation of the provision of the Act.

Thirdly, Section 16 to 19 of the Act deals with the Penal Sanctions which are, if enforced properly, sufficient to have the requiste effect.


The real problem lies in the implementation aspects. The failure in the implementation of the Act may arise because of a variety of factors chide among them, namely:

• Lack of Awareness: The need to create awareness of socio-economic legislation or to publicize it is hardly realized.

• Lack of Actual Prosecution of the Offenders: As also seen from past experience, there is hardly any enforcement of the penal sanctions provisions.

• Lack of Administrative and Political Will: Not infrequently, the administrators who implement the programmes are drawn from the dominant castes whose interests are adversely affected by the legislation.

• Lack of Facilities for Legal Aid and Advice: Often, illiteracy, lack of communication, remoteness from urban centers and poverty inhibits the weaker section from taking advantage of the legal process available to them.

• Social and Economic Dependence: The law should take account of the social and economic background of the issue.

• Lack of Measures to Make Concerned Official Countable for Their in Action or Misdeeds: In Neeraja Chaudhary v. State of M.P. (1982), most of the released bonded labourer had not been rehabilitated even after six months of their release.

As per the Bonded Labour System (Abolition) Act, 1976:

 “bonded labour” means any labour or service rendered under the bonded labour system-Section 2 (e).

 “bonded labourer” means a labourer who incurs, or has, or is presumed to have incurred a bonded debt-Section 2(f).

 “bonded labour system” means the system of forced, or partly forced, labour under which a debtor enters, or has, or is presumed to have, entered, into an agreement with the creditor to the effect that he would-

i. render, by himself or through any member of his family, or any person dependent on him, labour or service to the creditor, or for the benefit of the creditor, for a specified period or for any unspecified period, either without wages or for nominal wages, or

ii. for the freedom of employment or other means of livelihood for a specified period or for an unspecified period, or

iii. forfeit the right to move freely throughout the territory of India, or

iv. forfeit the right to appropriate or sell at market value any of his property or product of his labour or the labour of a member of his family or any person dependent on him;

and includes the system of forced, or partly forced, labour under which a surety for a debtor enters, or has, or is presumed to have, entered, into an agreement with the creditor to the effect that in the event of the failure of the debtor to repay the debt, he would render the bonded labour on behalf of the debtor-Section 2(g)

Through its various judgments, Supreme Court has given a very broad, liberal and expansive interpretation of the definition of the bonded labour. According to the interpretation given by the apex court, where a person provided labour or service to another for remuneration less than the minimum wage, the labour or service falls clearly within the scope and ambit of the words forced labour under the constitution.


 On commencement of this Act the bonded labour system shall stand abolished and every bonded labourer shall stand freed and discharged free from any obligation to render bonded labour.

 Any custom, agreement or other instrument by virtue of which a person is required to render any service as bonded labour shall be void.

 Liability to repay bonded debt shall be deemed to have been extinguished.

 Property of the bonded labourer to be freed from mortgage etc.

 Freed bonded labourers shall not be evicted from homesteads or other residential premises which he was occupying as part of consideration for the bonded labour.

 District Magistrates have been entrusted with certain duties and responsibilities for implementing the provision of this Act.

 Vigilance committees are required to be constituted at district and sub-divisional levels.

 Offences for contravention of provisions of the Act are punishable with imprisonment for a term which may extend to three years and also with fines which may extend to two thousand rupees.

 Powers of Judicial Magistrates are required to be conferred on Executive Magistrates for trial of offences under this Act. Offences under this Act may be tried summarily.

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 Every offence under this Act shall be cognizable and bailable.


Official statistics reflecting enforcement of the Bonded Labour System (Abolition) Act are equally difficult to obtain. Statistics regarding application of the Bonded Labour System (Abolition) Act to children are nonexistent. Indeed, at least some government officials interviewed by Human Rights Watch appeared to be laboring under the conviction that the Bonded Labour System (Abolition) Act does not apply to children, an interpretation that has no basis in the law itself nor in Supreme Court cases interpreting the law.

As of March 1993, the latest date for which official figures are available, state governments had reported the identification and release of a total of 251,424 bonded laborers. This number indicates all bonded laborers identified and released since the Bonded Labour System (Abolition) Act was passed in 1976. Of this number, 227,404 were reported to have been rehabilitated. If this number includes any rehabilitated bonded child laborers, that fact has not been reported.

State governments’ statistics grossly under-report the current incidence of bonded labor. As mentioned, the Supreme Court has been examining the incidence of bonded labor in thirteen states. These thirteen states, chosen by the court for investigation because of their reputation for high rates of debt bondage, all claimed in affidavits to the court that there was little or no bonded labor within their jurisdictions. The court, skeptical of these claims, appointed teams of investigators to study the issue in each state.

When districts and states do report on statistics regarding the identification and rehabilitation of bonded laborers, these numbers are frequently unreliable. The team investigating bonded labor in Tamil Nadu, for example, found that”statutory registers relating to bonded labour were not maintained in many districts.” Simple neglect or lack of resources is not the only or even the primary reason for lack of accurate statistics. According to the investigative team, “Details provided by the state government and the district administration do not tally in most districts and even appear fabricated.”

This can be seen in states’ statistics on bonded labor which are submitted to the central government. For example, there are at least three examples from 1988 to 1995 where states have reported that the number of bonded laborers that have been rehabilitated are greater than the number of bonded laborers that have been identified. In 1988, the state of Tamil Nadu reported that 34,640 bonded laborers had been rehabilitated, but they also reported that 33,581 bonded laborers had been identified, meaning that the state claimed it had rehabilitated 1,059 more people than it had ever identified as bonded laborers. In the 1989-90 report to the Ministry of Labour, the state of Orissa reported that 51,751 bonded laborers had been rehabilitated, but only 48,657 had been identified. The state of Tamil Nadu reported in the 1994-95 Ministry of Labour Annual Report that 39,054 bonded laborers had been rehabilitated, but they had identified 38,886. In total, these three examples indicate that 4,321 more people were rehabilitated than were identified as bonded laborers.

These statistics are disturbing for two reasons:

• these statistics are cumulative totals, meaning that every year, new cases are added to the cases from previous years, dating back to 1976, when the Bonded Labour System (Abolition) Act became law, so that the yearly statistics represent the total number of bonded laborers that have ever been identified, released, and rehabilitated.

• before bonded laborers can be eligible for rehabilitation, they must be identified as bonded laborers. Because of this methodology, the cumulative totals for rehabilitation can never be more than the cumulative totals for identification and when this occurs, such as the previous three cases, it indicates a serious flaw in reporting. This may be due to several factors: state governments may be arbitrarily determining bonded labor statistics, or the inaccuracies may be due to simple error, or people who were not bonded laborers are being rehabilitated as bonded laborers. In one example of the latter, a survey of 180 bonded laborers who had been officially rehabilitated by the Bihar government found that 120 had never been bonded.

Another indication that the law is not being enforced is the fact much of the money allocated for the rehabilitation of bonded laborers is unspent and reabsorbed by the government. Funding for rehabilitation is allocated through a fifty-fifty matching grant in which the states undertake rehabilitation and the central government matches their expenditures. It is administered through several schemes under the Integrated Rural Development Program (IRDP) and Jawahar Rozgar Yojana (JRY). Records of expenditures for these programs show that in 1989-90, only 76.16 percent of the funds were utilized. In 1990-91, 78.41 percent of funds were utilized. And in 1991-92, only 47.83 percent of funds available were utilized for rehabilitating bonded laborers. On March 14, 1996, the Parliamentary Committee on Labour and Welfare reported that only 38.39 percent of the funds available for the rehabilitation of bonded laborers had been utilized. The reason given was that “the state governments failed to submit certificates in regard to the expenditure incurred by them. Because of this lapse, the Central government did not release funds to them.” The failure to report expenditures indicates a failure to enforce the law.

A Supreme Court lawyer closely connected to bonded labor litigation corroborated the unreliable nature of the district collectors’ reports, saying there is “no mechanism to ascertain the collectors’ veracity.” According to this advocate and others familiar with the issue, corruption in application of the Bonded Labour System (Abolition) Act and dispersal of act-related rehabilitation funds is common. “A collector may receive 100,000 rupees for rehabilitation efforts but disperse only 10,000 of it. Embezzlement is difficult to track, but we all know it happens. For example, a bonded labourer comes in, puts his thumb print on the document saying he will receive 6,250 rupees, but receives only 3,000 rupees.”

Corruption and neglect are not the only reasons for bad statistics regarding bonded labor. Another is passivity on the part of enforcing officials, who too often take no affirmative steps to discover and root out debt bondage in their districts. Whether this is due to simple apathy or to a misunderstanding on their part of their official duties, the effect is disastrous for bonded laborers, who are left in their state of enslavement indefinitely. In Tamil Nadu, for example, the investigators found that “most District Collectors… had one basis to assume that bonded labour does not exist-No one is coming forward [to report that they are in bondage.”

Human Rights Watch was unable to obtain any statistics on prosecution under the Bonded Labour System (Abolition) Act after 1988. Up to 1988, there were 7,000 prosecutions under the Bonded Labour (Abolition) Act throughout India, of which 700 resulted in convictions. It is certain that prosecution under the act is rare. In Tamil Nadu, the first prosecutions under the twenty-year-old act occurred in 1995, when eight beedi employers were arrested by the North Arcot District Collector. The case, which drew headlines in the regional press, was depicted as a bold “get tough” measure. The agents spent one night in jail and were fined 500 rupees each. The Bonded Labour System (Abolition) Act allows for punishment of three years in prison and a 2,000 rupee fine.


The problem of Bonded Labour System is not a problem in or by itself. It is a part of the larger issue of welfare of the nation as a whole. Besides the several failures of implementation of the Act, the Report from Human Right Watch Asia (1996) finds that there are also some obstacles to enforce the Act, namely:

• Apathy;

• Caste and Class Bias;

• Obstruction;

• Corruption;

• Lack of Accountability;

• Lack of Adequate Enforcement Staff.


The problem of bonded labour is dynamic in nature and it can reoccur at any point of time. Thus, the bonded labourers must be rehabilitated as soon as possible after their release. If this is not done than it is a remedy worst than the malady because these labourers will die of starvation. Thus, before releasing the bonded labourers a sound rehabilitative planning is inevitable. The following measures can be adopted in this regard:

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• Public awareness and education is a must,

• Productive and income generating schemes must be formulated in advance otherwise they will again fall back upon the system of bonded labour after their release,

• These schemes should be chosen after duly consulting the concerned labourers and NGOs involved in their emancipation and rehabilitation,

• The government should work on a priority basis in areas vulnerable for the system of bonded labour and for the rehabilitation of already releases labourers,

• An effective and speedier grievance redressal machinery should be established for proper disposal of cases pertaining to bonded labour,

• A humanitarian training programme should be formulated for persons dealing with bonded labourers,

• There should be a system of summary disposal of cases under various laws dealing with the evil of bonded labour,

• There should be a strict enforcement of the welfare and labour legislations,

• There should be more stringent penal laws for effectively dealing with the menace of bonded labour etc.

Besides the measures for improvement mentioned already in the foregone discussion, the Government of India should demonstrate its commitment to the eradication of bonded labour by implementing some of the following recommendations at the earliest possible.

• The Bonded Labour System (Abolition) Act should direct Vigillance Committees and District Collectors to initiate serving and credit programme at the community level.

• In addition to genuine government action, it is essential that non-governmental organization be encouraged by the Governance to collaborate in this effort.

• A nation-wide public awareness campaign should be launched regarding the legal prohibition of bonded labour.

• The scheme for rehabilitation programmes should be integrated with existing IRDP and NREP (35th Session of the Labour Ministers Conference held in 11 M

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