Bonded Labour

What is Bonded Labour?

Bonded labor, also known as debt bondage, is said to be a form of slavery practiced for thousands of years. It has been recognized as one of the worst forms of modern slavery, where the victim is a bound laborer forced to work for a long period without pay or minimal wages. It could be in the form of unpaid work for a certain duration for repaying the original incurred debt. A person can become a bonded laborer when his work is rendered in repayment for a loan. Although not all bonded labor is forced, the overwhelming majority of all forced labor practices whether child or adult are by their very nature bonded.

Official Definition

As per Article 23 of the Indian Constitution prohibits forced labor as part of the right against exploitation. This provision played a very important role in the enactment of the Bonded Labour System (Abolition) Act. Although the term "forced labor" is not defined here, the Supreme Court of India clarified its scope: "When a person gives labour or services to another for remuneration which is less than the minimum wage, such labor or service clearly falls within the scope of 'forced labor' under Article 23."Other than Article 23, there are constitutional provisions that are not direct about bonded labor but are, in fact important for discussion of the exploitation of bonded laborers.

As defined in legislation

As per the 1976 Bonded Labour (Abolition) Act ,“Bonded Labour” means any labor or service rendered under the bonded labor system. The 1976 Bonded Labour (Abolition) Act defines ‘bonded labour system’ as the system of forced labour under which a debtor enters into an agreement with the creditor that he would render service to him either by himself or through any member of his family or any person dependent on him, for a specified or unspecified period, either without wages or for nominal wages, in consideration of loan or any other economic consideration obtained by him or any of his ascendants, or in pursuance of any social obligation, or in pursuance of any obligation devolving on him by succession.

Bonded labour is defined indirectly under the Indian Penal Code. As per Section 370 and 370 A of the Indian Penal Code deal with human trafficking and exploitation. Trafficking refers to recruitment, transportation, harboring, transferring, or receipt of persons for exploitation through coercion, threats, deceit, or other forms of compulsion or inducements. Exploitation can be physical or sexual in nature, slavery, servitude, or even organ removal, and no consent from the victim shall apply. Section 370A also deals with knowingly trafficking minors and others to engage in sexual exploitation. These provisions emphasize combating exploitation and protecting vulnerable individuals from forced labor and trafficking.

Legal Provisions

The offences mentioned in the sections relate to forced labour through coercion which are the elements of  bonded labour. According to section 374 of the Indian Penal Code, it is illegal to make a person work against his will by compulsion. It protects a person from undue influence or coercion that could lead to his working against his will, focusing on liberty and dignity.Similarly, the illegal act defined here is forcing labour by coercion, compulsion or influence which are elements of bonded labour as it is a form of coercion under the mask of debt recovery.\

The Bonded Labour System (Abolition) Act, 1976 was enacted to eradicate the practice of bonded labor in India, placing the responsibility for its implementation on the respective State Governments. Under Section 4, the Act abolished the bonded labor system from the date of its commencement, freeing all bonded laborers from any obligations to render such labor. To ensure the complete eradication of the practice, Section 5 declares all customs, agreements, and instruments enforcing bonded labor as void, rendering them legally unenforceable. Additionally, Section 6 extinguishes all bonded debts, ensuring that no creditor can demand repayment of such obligations.

Further, the Act provides safeguards for bonded laborers by protecting their property and residence. Section 7 mandates the automatic release of any mortgage, lien, or encumbrance on a bonded laborer’s property, ensuring they are not deprived of their rightful assets. Moreover, Section 8 prevents the eviction of freed bonded laborers from their homesteads or residential premises that they occupied under bonded labor arrangements, thereby securing their right to shelter and dignity.

To strengthen enforcement, Section 21 empowers Executive Magistrates with the authority of Judicial Magistrates of the first class to try offenses under this Act, while Section 22 provides for the summary trial of such offenses, ensuring swift judicial proceedings. Violations of the Act are penalized under Sections 16 to 20, which prescribe stringent punishments, including imprisonment of up to three years and fines for individuals who enforce bonded labor, extract labor through coercion, advance bonded debts, or obstruct the implementation of the Act.

As defined in official document

The Central Sector Scheme for Rehabilitation of Bonded Labourer, 2021 is an initiative by the Ministry of Labour aimed at assisting State Governments in rehabilitating rescued bonded labourers. Initially launched as a Centrally Sponsored Scheme in 1978, it provided financial assistance up to ₹4,000 per freed bonded labourer, shared on a 50:50 basis between the Central and State Governments, with the North Eastern States receiving full central assistance if they were unable to contribute their share. Over time, the scheme underwent several modifications, and in 2016, it was revamped as the Central Sector Scheme for Rehabilitation of Bonded Labourer – 2016. Further modifications led to the introduction of the 2021 version, which came into effect on January 27, 2022.

Under the scheme, financial assistance for rehabilitation varies based on the category of the rescued bonded labourer. Adult male beneficiaries receive ₹1 lakh, while special category beneficiaries, including children (orphans, those rescued from organized or forced begging rings, or other forms of forced child labour) and women, are entitled to ₹2 lakhs. In cases involving extreme deprivation or marginalization, such as transgenders, differently-abled persons, or women and children rescued from sexual exploitation (brothels, massage parlours, placement agencies, trafficking, etc.), the financial assistance increases to ₹3 lakhs. Notably, State Governments are not required to contribute any matching funds for the cash rehabilitation assistance.

The scheme also provides financial aid for survey and research. A financial provision of ₹4.50 lakhs per district is allocated for conducting bonded labour surveys once every three years in sensitive districts, while ₹1.50 lakhs is allocated for evaluatory studies, with a limit of five studies per year. Additionally, ₹10 lakhs per annum is provided for awareness generation at the state level.

A key aspect of the scheme is that the release of rehabilitation assistance is linked to the conviction of the accused. However, to ensure immediate support, rescued bonded labourers can receive up to ₹30,000 as interim cash assistance, irrespective of the status of conviction proceedings. If a prima facie case of bonded labour is established by the District Administration, the proposal for assistance shall not be withheld due to the absence of conviction details. Any such immediate assistance will be deducted from the total rehabilitation assistance amount. The final disbursement of both cash and non-cash assistance depends on proof of bondage and other judicial processes.

To provide immediate support to freed bonded labourers, the scheme mandates the creation of a Bonded Labour Rehabilitation Fund at the district level, with a permanent corpus of at least ₹10 lakhs, which is renewable and placed at the disposal of the District Magistrate. These benefits are in addition to other cash or non-cash assistance that may be provided by the State Governments.

As defined in official government report

As defined in "Handbook on Bonded labour", 'bonded labour system' thus refers to the relationship between a creditor and a debtor who obtains loan owing to economic compulsions confronting his day-to-day life, and agrees to abide by the terms dictated by the creditor. Characterized by a creditor-debtor relationship that a labourer often passes on to his family members, bonded labour is typically of an indefinite duration and involves illegal contractual stipulations. Contracts deny an individual the basic right to choose his or her employer, or to negotiate the terms of his or her contract. Bonded labour contracts are not purely economic; in India, they are reinforced by custom or coercion in many sectors such as the agricultural, silk, carpet, mining, match production, brick kiln and glass/bangle industries, among others.

As defined in case laws(s)

In Bandhua Mukti Morcha v. Union of India (1984 3 SCC 161) a public interest litigation has been brought before the court in relation to inhuman working conditions at stone quarries. This arises due to the failure of several State Governments in implementing the directions issued by the Supreme Court in an earlier 1984 petition by the appellants themselves.

The Supreme Court defined ‘ bonded laborer’ an adjacent definition

• “ before a bonded laborer can be regarded as a bonded laborer, he must not only be forced to provide labor to the employer, but must receive an advance or other economic consideration from the employer, unless he is made to provide forced labor in pursuance of any custom or social obligation or by reason of his birth in any particular caste or community.”

In People's Union for Democratic Rights vs. Union of India, AIR 1982 SC 1473,the Supreme Court expanded the meaning of bonded labour. The Supreme Court held that economic compulsion forcing people to work at less than minimum wages is nothing but forced labour. The Court made a statement referring to Article 23, stating,

"This Article prohibits all forms of forced labour, even if they arise from a contract voluntarily entered into by the individual required to provide labour or services. Compelling someone to work against their will, even if it breaches a contractual agreement, violates human dignity."

In Neeraja Chaudhary vs State of Madhya Pradesh, Judgement, the court held that “..This is the test which has to be applied for the purpose of determining whether a workman is a bonded labourer or not and we would therefore direct the State Government to apply this test throughout its territory for the purpose of ascertaining whether there are any bonded labourers or not and if so how large is their number. Whenever it is found that any workman is forced to provide labour for no remuneration or nominal remuneration, the presumption would be that he is a bonded labourer unless the employer or the State Government is in a position to prove otherwise by rebutting such presumption...”

Types of bonded labour

Recent evidence suggests that the following types of bonded labour continue to be significant.

(a) Bonded labour that is a vestige of traditional social relations

Traditional social relations have sanctioned a caste-based division of labour in which servile castes are expected to perform low status functions in exchange for a guarantee of subsistence. Degrees of social exclusion ensure a low degree of social mobility and social cohesion despite a strong policy of positive discrimination pursued by the government. Moreover, personalised servile relationships based on the traditional social structure persist in some parts of the country, mostly in backward agriculture, but are also sometimes carried over into the non-agrarian sector, through, for example, domestic service. These relationships have declined over the years. Their persistence today is probably less a matter of social custom and more due to other elements of force and compulsion, as brought out in recent enquiries into the Sullong tribe in the North-East.

Labour bondage draws heavily upon traditional social relations and the caste system, even in the non-agricultural sector, but can be seen most directly in agriculture and in bonded labour relationships involving tribals.

(b) Bonded labour in agriculture

The uneven pace of modernisation of agriculture has created new demands for a stable and servile labour force, which, in some cases, is obtained through credit bondage and elements of force, deceit and compulsion. Migrant labour situations seem to create a higher propensity for bondage. In the areas of origin, from where males are on the move, women or children may find themselves in bondage. In destination areas, migrant labour may end up in bondage. Bonded labour relations have also been alleged in commercial plantations. The paper examines the evidence regarding bonded labour in transitional agriculture.

(c) Bonded labour in the rural and urban unorganised and informal sector

The incidence of bonded labour is perhaps the highest in the unorganised and informal sector in India. And among the unorganised sectors, the incidence of bondage is probably the highest in quarries and open mines. These industries are mainly characterised by the predominance of manual processes, seasonality, remoteness and contract migrant labour. Brick kilns are another industry which reportedly continues to have a sizeable incidence of bonded labour. Among industries for which recent evidence has accumulated are power looms, handlooms, rice mills, sericulture and silk weaving, woollen carpets, fish processing, and construction. Bonded labour, including of children, has been identified in a number of other sectors including the circus industry and domestic work.

(d) Child bonded labour:

Several industries with a high incidence of child labour (woollen carpets, silk, gem cutting and polishing) still show an incidence of child bondage.  

Adjacent terms

The 1976 Bonded Labour (Abolition) Act defines the 'bonded labour system' as a form of forced labor wherein a debtor agrees to provide services to a creditor, either personally or through a family member or dependent, for a specified or unspecified period. This work is done either without wages or for minimal wages, as repayment for a loan, other financial consideration, a social obligation, or an obligation inherited from ancestors.

In verbatim;

“Bonded labor system” means the system of forced, or partly forced labor under which a debtor enters, or has, or is presumed to have, entered, into an agreement with the creditor to the effect that –

• In consideration of an advance obtained by him or by any of his lineal ascendants or descendants (whether or not such advance is evidenced by the document) and in consideration of the interest, if any, due on such advance, or
• In pursuance of any customary or social obligation, or
• In pursuance of any obligation devolving on him by succession, or
• For any economic consideration received by him or by any of his lineal ascendants or descendants, or
• By reason of his birth, in any particular caste or community, he would-

i) Render, by himself or through any member of his family, or any person dependent on him, labor or service, to the creditor, or for the benefit of the creditor, for a specific period or for an unspecified period, either without wages or for nominal wages, or

ii)Forfeit 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 labor or the labor of a member of his family or any person dependent on him, and includes the system of forced, or partly forced, labor 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 labor on behalf of the debtor;

International experiences

According to the ILO Report on stopping forced Labour (2001) the term, bonded labour refers to a worker who rendered service under condition of bondage arising from economic consideration, notably indebtedness through a loan or an advance. Where debt is the root cause of bondage, the implication is that the worker (or dependents or heirs) is tied to a particular creditor for a specified or unspecified period until the loan along with the interest which is at usurious rates has been fully repaid.

The global framework for combating bonded labour is established through various conventions and agreements under the International Labour Organization (ILO) and the United Nations (UN). These instruments define and prohibit several forms of slavery, forced labour, and debt bondage. The Slavery Convention of 1926, adopted by the League of Nations, represents an early commitment to eradicate slavery worldwide. This was followed by the ILO Forced Labour Convention, 1930 (No. 29), which provides a comprehensive definition of forced labour and outlines the responsibilities of member states.

The ILO Abolition of Forced Labour Convention, 1957 (No. 105) is one of the fundamental conventions that prohibits various forms of forced labour, including punitive measures against individuals for exercising their rights, such as participating in strikes or holding certain political views. This convention reinforces the global commitment to eradicating forced labour in all its forms, including bonded labour. The international community has further reinforced its commitment to combatting bonded labour through the Sustainable Development Goals (SDGs), particularly Target 8.7. This target calls on all member states to take immediate and effective action to eliminate forced labour, end modern slavery and human trafficking, and ensure the prohibition and elimination of all forms of child labour. The target aims for a comprehensive approach to eradicating these practices by 2030, thereby promoting decent work and sustainable economic growth. The Global Slavery Index, published by the Minderoo Foundation, provides an international report on modern slavery, assessing the prevalence of forced labour and the measures taken by governments to combat it.

In the United States, the Victims of Trafficking and Violence Protection Act (TVPA) prohibits forced labour and protects victims of debt bondage, with enforcement through the Fair Labor Standards Act (FLSA). The U.S. also assesses global efforts against trafficking through the Trafficking in Persons (TIP) Report. In the United Kingdom, the Modern Slavery Act 2015 consolidates laws against human trafficking and forced labour, penalizing slavery and requiring businesses to disclose anti-slavery measures in their supply chains. This Act emphasizes victim protection and offender prosecution. The European Union addresses bonded labour through the EU Directive 2011/36/EU, which mandates member states to protect victims and prosecute traffickers. The EU also supports initiatives to combat bonded labour and promote human rights, reflecting a collective commitment to tackling this issue.

Appearance of 'bonded labour' in Database

Crime in India (NCRB)

As per data from the National Crime Records Bureau, in 2019, 1,155 cases were reported under the Bonded Labour System Abolition Act, 1976 (BLSA). Out of these crimes, 96% targeted SC and ST. In the year 2020, the number of registered cases reached 1,231 with 94% targeting SC/ST people. In the year 2021, 592 cases were registered under the Act. The number of cases involves SC/ST victims in 96%.

Annual Report of Ministry of Labour and Employment

As of December 31, 2022, a total of 3,15,302 bonded labourers have been identified and released across India. Under the Central Sector Scheme for Rehabilitation of Bonded Labourers, an amount of ₹10,367.10 lakh has been disbursed to State and Union Territory (UT) governments for their rehabilitation. Additionally, ₹1,127.94 lakh has been allocated to support surveys, awareness generation programs, and evaluatory studies aimed at addressing bonded labour.

RISING NUMBER OF BONDED LABOURERS

The Ministry of Labour and Employment acknowledged the persistence of bonded labour despite its legal abolition. As of March 31, 2016, a total of 2,82,429 bonded labourers had been released and rehabilitated across various states. The highest numbers were recorded in Tamil Nadu (65,573), Karnataka (58,348), Odisha (47,313), and Uttar Pradesh (37,788).To strengthen rehabilitation, the Central Sector Scheme for Rehabilitation of Bonded Labour, 2016 was introduced, offering full central funding, increased financial assistance (₹1–3 lakh per beneficiary), and district-level rehabilitation funds. Additionally, rehabilitation assistance was linked to the conviction of offenders, and special provisions were made for child and female bonded labourers.

Research that engages with Bonded labour

Prevention and elimination of bonded labour

The paper examines the role of microfinance in addressing bonded labour in South Asia. It highlights that bonded labour predominantly affects lower castes, indigenous peoples, and migrant workers, often perpetuating cycles of debt that can last generations. The authors argue that while microfinance can potentially prevent bondage and aid rehabilitation, it is not a standalone solution. The paper discusses the need for tailored microfinance products for different groups—those currently in bondage, those released, and those at risk—while emphasizing the importance of community-based targeting methods. It draws on experiences from various ILO projects, particularly the "Programme for the Prevention and Elimination of Bonded Labour in South Asia" (PEBLISA).Key findings indicate that effective microfinance should be complemented with non-financial support services such as education, health care, and skills training to address the broader needs of vulnerable families.

Bonded Labour in India: Its Incidence and Pattern"

The report examines the persistence of bonded labour across various sectors in India. Using government surveys, NGO reports, and academic studies, the research highlights how bonded labour has shifted from traditional caste-based servitude to newer forms of economic coercion, particularly affecting migrants, tribals, women, and children.

The study identifies agriculture, brick kilns, quarries, and informal industries as key sectors where bonded labour remains prevalent. It draws from field research and NGO reports, documenting cases in Punjab, Tamil Nadu, Karnataka, and Bihar, where workers are trapped through deceptive recruitment, debt dependency, and restricted mobility. Migrant workers, particularly in agriculture and construction, are highly vulnerable due to exploitative contracts and advance payments. Child bonded labour is highlighted in industries like silk production, carpet weaving, and domestic work, where children are pledged to settle family debts. Tribal communities in Orissa, Chhattisgarh, and Madhya Pradesh also face severe bondage due to economic distress and land alienation. It also critiques government interventions, noting that while 285,379 bonded labourers were identified and some rehabilitated, enforcement remains weak, and many remain trapped in exploitative conditions. The research calls for stronger monitoring, rehabilitation efforts, and policy reforms to address the evolving nature of bonded labour in India.