November 10, 2016 / 12:18 AM / 3 years ago

Factbox: The economics of India's seasonal debt bondage trap

Kantabanji, India (Thomson Reuters Foundation) - Every November and December, villagers across the Balangir district of Odisha state in eastern India stuff belongings into sacks, leave their huts and visit the nearest temple to pray for good fortune.

They then climb onto tractors and buses and head to the train station in Kantabanji town, where they start an annual migration that takes them to brick kilns across India.

Frequent droughts and dire poverty force thousands of men and women to take loans from labor agents in every village. They spend the next six months working to pay the debts back. Rights groups call this a form of slavery known as debt bondage.

Here are key facts about the economics of seasonal debt bondage in India, where around 18 million people are trapped in some kind of slavery, according to the latest Global Slavery Index by Walk Free Foundation:

At least 10 million people work in India’s tens of thousands of brick kilns, according to a 2015 report by the Centre for Science and Environment.

Almost 500,000 migrant workers are sent out illegally by labor agents from Odisha’s Balangir district each year, India’s main hub of debt bondage.

The agents use a system known as “pathariya”, in which three people are considered a single labor unit. So a husband, wife and brother, for example, might be responsible for collectively producing enough bricks to pay back loans from labor agents.

Each worker is given an initial advance of up to 10,000 rupees ($150) around the time of the harvest festival of Nuakhai. A second installment of 10,000 rupees is given two weeks later as the Dusherra celebrations start across India.

Workers are promised 300-400 rupees ($4-6) for every 10,000 bricks they make. Each week, they are paid 100 rupees ($1) to buy provisions and essentials like soap from the weekly market, where they are escorted by security guards or a manager from the kiln.

The main accounts are settled at the end of six months, after the loan is deducted, leaving them with as little as 5,000 rupees ($75) to take home - just enough for the return journey.

Labor contractors are paid per person sent. They get additional income for every 1,000 bricks made by a set of workers, making the business extremely lucrative, rights groups say.

Under the 1979 Inter-State Migrant Act, agents have to get a license from the labor department.

In the eastern state of Odisha, agents have to pay the government at least 200 rupees ($3) for up to 20 workers and 10,000 rupees ($150) for sending more than 2,000 outside the state to work.

In addition, a security deposit of 100 rupees ($1) has to be paid for each migrant worker, along with a declaration signed by the agent that they are “migrating of their own free will”.

The agent also signs a declaration that he or she will be responsible for the health and safety of migrant workers until they return to their village.

Such requirements act as a deterrent to registering laborers officially, rights groups say.

In practice, workers say they are herded onto trains, dropped off at brick kilns and forgotten. Their next contact with the agent is only when it’s time to settle payment at the kiln six months later.

A toll-free helpline number (155368) was started by the Odisha government in 2014 to rescue migrant laborers from exploitative workplaces.

According to district labor officer Madan Mohan Paik, in 2015 the helpline received around 15 calls from migrant laborers complaining of trafficking, harassment and overwork.

($1=66.723 Indian rupees)

Reporting by Anuradha Nagaraj; editing by Timothy Large; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking and climate change. Visit

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