Why are we so callous about worker safety?

Let us look at three examples that illustrate the plight of workers due to inadequate safety in the workplace.

On 30 June, Telangana witnessed its worst industrial mishap. As many as 46 people died; of the 33 injured, eight are still in hospital; and another eight are still missing, possibly charred beyond recognition. This human tragedy was caused by the explosion of a reactor in Sigachi Industries Limited’s pharmaceutical factory. Located in Pashamylaram industrial area in Sangareddy district, about 50 km from Hyderabad, the blast was heard several kilometres away.

To call it an ‘accident’ absolves the management of grossly neglecting maintenance and safety protocols. A chain of critical malfunctions — most notably overheating and pressure buildup in a spray dryer filled with combustible powder — was aggravated by defective safety equipment and failures in monitoring and maintenance.

And this isn’t the first case. Last year, in Sangareddy district alone, 25 workers died within a four-month period. One can only guess the number of unreported injuries or near-fatal cases.

Now consider another such ‘accident’. On 7 June 2021, a deadly fire broke out at the SVS Aqua Technologies chemical factory in the Maharashtra Industrial Development Corporation (MIDC) area near Pirangut on the outskirts of Pune. Of the 18 workers who were charred to death, 15 were women.

The factory, which produced chlorine dioxide for water purification, had reportedly stored flammable materials without adhering to safety protocols — an act that can only be described as criminal negligence. An investigation by intrepid labour activists revealed that the workers were not even aware they were handling hazardous materials — codes masked the true names of the chemicals.

It was also revealed that women workers were paid less than minimum wage. The company, which was operational since 2012, only got registered in 2020. It managed to obtain ISO-9001 certification for quality management but no inspector ever visited the factory till this ‘accident’ took place.

This cannot be attributed to the EoDB (Ease of Doing Business) index — a global benchmarked developed by the World Bank Group to assess how easy or difficult it is to start, operate and close a business in a given country. While EoDB has shifted the onus of self-certification to owners and managers of factories, it surely does not eliminate the need for rigorous inspections. Managers abdicate their responsibility to ensure worker safety, especially in hazardous industries.

The tendency to cut corners to boost profitability makes the situation worse. Disabling safety sensors or running power-presses at higher speeds to achieve sales targets are just two instances of the bottom-line being privileged over human lives.

Third, I’d like to draw your attention to the recent publication of ‘Crushed 2025’, India’s only long-running evidence-based report that exposes ongoing systemic safety and labour compliance issues prevalent in the informal segments of the auto supply chain. The report was launched in mid-July by the Safe in India (SII) foundation, an NGO dedicated to improving worker safety in India’s manufacturing sector, particularly the automotive and auto-component industry, which accounts for one-third of the manufacturing sector’s GDPS.

SII, a Section 8 company established in 2016 and supported by the 1991 batch of IIM Ahmedabad, has consistently been working for workers’ rights, putting pressure on auto brands to improve safety for over 10 million workers in the industry. Their painstaking data-driven approach is based on the authentic testimonies of workers, and has helped increase worker awareness about the Employees’ State Insurance Scheme (ESIS) and the role of the Employees’ State Insurance Corporation (ESIC).

Over the past seven years, SII has helped 10,000 workers access ESIS benefits, but this still represents only 40 per cent of the victims. The report reveals that 2,333 workers had their fingers crushed while working for vendors who supply auto parts to the top ten auto brands in the country. Sandeep Sachdeva, co-founder of SII, says the actual numbers are likely to be much higher.

While SII breaks the silence around worker injuries, it also throws up laughable anomalies vis-à-vis official statistics. When the source of data is the labour ministry and ESIC — both arms of the government — the numbers tell a different story. In Haryana, the ministry has routinely been reporting 40 to 50 injuries per year — for several years. The ESIC, however, claims that benefits are going to nearly a thousand workers a year.

As Sachdeva points out, in developed countries, a single maimed finger can be worth millions in compensation; in India, “labour is cheap, and so are lives”.

The most ironic thing about workplace injury and death compensation in India is this. The Employees’ State Insurance Scheme was established by the ESI Act of 1948, the same year that the National Health Scheme (NHS) was set up in the UK. Both aim to provide universal social security and healthcare — in India to workers, and in the UK to all citizens.

The current reality is that nearly all British citizens have access to and benefit from the NHS, whereas in India, many workers are not even aware of their rights and entitlements. On paper, the ESIS is one of the finest schemes in the world, but it falls woefully short on implementation.

Thankfully, this year’s Economic Survey has brought much-needed attention to workplace safety. It emphasises that Occupational Safety and Health (OSH) regulations should not be viewed as burdensome costs but as strategic investments. According to estimates by SII, the country loses up to 4 per cent of its GDP due to safety lapses.

India currently ranks 133rd in global labour productivity — a position directly corelated to inadequate OSH standards and poor working conditions. This ranking is significantly lower than that of countries like China, Vietnam and Mexico.

Investing in safety and OSH protocols not only enhances the wellbeing of workers and their families but also boosts productivity, morale and trust between workers and management. For those running factories, it reduces absenteeism, medical expenses and the risk of penalties for non-compliance. Frequent shutdowns caused by preventable injuries — such as crushed fingers — not only disrupt production but also hurt supply chain reliability and competitiveness.

The experience of neighbouring Bangladesh offers a powerful lesson. In 2013, the eight-storey Rana Plaza building, which housed several garment factories, collapsed — killing 1,134 people. This tragedy prompted sweeping reforms, most notably the creation of the Accord on Fire and Building Safety, which resulted in the training of 1.4 million workers and significant improvements in workplace safety standards.

Improved workplace safety was undoubtedly a key factor in boosting the competitiveness of Bangladesh’s garment sector, helping its exports outpace those of even India and Vietnam. Similarly, countries like Chile and Costa Rica saw significant gains in labour productivity following enhancements in OSH standards and reductions in workplace injuries.

Economic theory supports this trend, suggesting that investments in worker safety and occupational health yield benefits such as increased productivity, higher motivation and loyalty and reduced absenteeism. Crucially, a clear and visible commitment from the management plays a vital role in making these gains sustainable.

The way forward is clear. There should be complete transparency in data reporting on accidents and fatalities, making it consistent across ESIC and labour departments. Adherence to safety and OSH protocols must be incentive based. There should be public–private partnerships (through NGOs if necessary) to increase worker awareness about rights and safety. Leading brands should be held accountable for the practices of their vendors throughout the entire supply chain.

In the final analysis, it is important to note that worker safety does not merely have an instrumental value — it is ultimately a moral and ethical commitment to protect the most vulnerable workers performing the riskiest jobs.

Ajit Ranade is a noted economist. More of his writing can be found here

Article courtesy: The Billion Press