Under this system, any person who took a loan from a landlord or moneylender had to render free labour to the creditor till the amount of loan with interest thereon was repaid in full. If a person died without clearing his debt, his heirs were bound to give free labour. The system of bonded labour was an inhuman system. By taking a loan, the bonded labourer had to forego his freedom of employment. He lost his right of free movement. He could not sell his property or labour even at market value. It seems this system was backed by some local customs and traditions. It was mostly in vogue in the tribal and backward communities.
Late Smt. Indira Gandhi, the former Prime Minister of India, declared that the system of bonded labour was a barbarous system. Therefore, it must go. Accordingly, the Government of India issued the “Bonded Labour Abolition Ordinance”on 24th October, 1975. This Ordinance has since become an Act. Under the Act, the evil institution of slavery which had continued all these years was abolished.
The Act provided that “no person shall henceforth make any advance under the system or compel any person to render any bonded labour or other forms of forced labour.” The Act further lay down that any custom or tradition or any contract by virtue of which any person is required to do any work or render any service as bonded labour, shall be void and inoperative.
The Act went to the extent of providing that every bonded labourer, who has been detained in civil prison whether before or after the judgement shall be released forthwith. No person who has been thus freed and discharged shall be evicted from his home or other residential accommodation. Even the liability to repay the bonded debt has been ended.
The abolition of bonded labour by the Government in 1975 was a step in the right direction. Thousands of bonded labourers heaved a sigh of relief. They became free from their serfdom for the first time in their lives.
Under the Bonded Labour System (Abolition) Act, 1976, identification and release of bonded labourers and rehabilitation of freed bonded labourers is the direct responsibility of the State Government concerned. For the purpose of implementing the provisions of the Act, the State Government may confer necessary powers on District Magistrates. With a view to supplementing the efforts of State governments a Centrally-sponsored scheme has been in existence since 1978-79 under which State Governments are provided Central financial assistance for rehabilitation of released bonded labourers.
The Centrally- sponsored scheme was modified in May 2000. In the modified scheme, besides increasing the rehabilitation assistance from Rs. 10,000/- to Rs.20,000 per bonded labour, provision has also been made for giving Central grants to the states/ UTs for awareness generation, survey of bonded labourers and evaluator studies as per the modified scheme. Rs. 10.00 lakhs are provided per annum to State Government for creating awareness generation, Rs. 2.00 lakh per district to survey of bounded labourers once in 3 years in a district and Rs. 5.00 lakhs per annum for conductiog evaluator studies. So far 2, 68,136 identified bonded labourers have been rehabilitated with the Central assistance of Rs. 6983.36 lakhs.
The main reason why this pernicious system of bonded labour continued all these years even after Independence is that the labourers were uneducated, unorganised and extremely poor. Though this system has been abolished by law since October 1975, the Government of India should continuously monitor the programme of identification, release and rehabilitation of bonded labourers so that once a labourer is freed from the yoke of this system, he does not fall prey to it again. Even now about one third of the country’s population lives below the poverty line. In fact, the system of bonded labour will die its natural death only when poverty and illiteracy are banished from our country completely.