INTRODUCTION Child labour is an emotive subject,especially when young children are concerned,it evokes images of maltreatment and exploitation.According to the International Labour Office ,any activity other than study or play,remunerated or unremunerated,carried out by a person under the age of 15 years is defined as child labour (Cigno et. al 2002).Consolidated global statistics on child labour are elusive,because of the differing definitions and perceptions about what constitutes a child,child worker or child labour.For a large number of children who are forced to work in situations that compromise their developmet,child labour is an abuse of their fundamental human rights.The principal reason why such work is seen as morally and socially unacceptable is that such work hinders ‘the harmonious physical and mental development of the child’ (Murshed 2001).Child labour is mostly concentrated in Asia and Africa,which together account for more than 90 % of the total child employment.Asia is led by India which has more than 44 million child labourers and the largest child workforce in the world(Siddiqi & Patrinos n.d). The research is aimed at exploring factors that perpetuate child labour in India and study the policy implications for the international community with respect to trade,labour market regulation and legislation,role of international agencies and multinational companies and the need for increasing international awareness.The study elabotrates the demand and supply side factors of child labour and provides a valuable insight primarily into the role played by the international community along with national governments in curbing the growing problem of child labour in developing countries like India. REVIEW OF LITERATURE In view of the inadequate literature on the economic consequences of child labour,Galli (2001) points out the importance of the study of the economic impact of child labour and divides it into three broad categories consisting of the micro family level,macro variables such as long run growth and FDI and effects on the labour market.The analysis unravels the various forms of child labour ranging from hazardous and non-hazardous activities, agricultural and non-agricultural work, jobs in the modern and traditional industries, economic and non-economic activities to wage earners and unpaid family workers. The study also establishes a link between child labour and human capital accumulation, by observing that when parents send their children to work in order to increase their probability of survival, they may not perceive the long run negative implications of child labour for their own family.Since,child labour competes with school attendance and proficiency, children sent to work do not accumulate human capital,missing the opportunity to enhance their productivity and future earnings capacity. Child labour also slows down technological progress,sinceavailability of cheap, unskilled labour allows employers to avoid investing in fixed capital and upgrading production process.Child labour is also known to lower the perceived cost of having children thereby boosting fertility.Moreover,the health problems caused by child labourers,especially those who work in hazardous industries,and the lower hygiene associated with scarce education translate in the long run into a less healthy and hence less productive adult workforce. Siddiqi & Patrinos (n.d) argue that child labour is largely prevalent in the highly unmonitored,informal and rural sectors of developing countries,where the capacity to enforce minimum age requirements for schooling and work is lacking.Moreover,poverty and schooling problems contribute to child labour,whether it be inaccessibility of schools or lack of quality education.Traditional factors like rigid cultural and social roles further limit educational attainment and increase child labour.Lack of enforcement of labour restrictions perpetuates child labour with inconsistencies in legislation.The acceptance of social class separation perpetuates child labour.It is noted that people of India’s lower castes are expected to perform manual labour and hence do not attend school. Child labour cannot be viewed in isolation from education,health,fertility and technological issues.Moreover,leaving aside extreme child exploitation ,child labour is not necessarily an aberration but a rational household response to an adverse economic environment.Childlabour cuts across policy boundaries and factors like health,education,labour market,capital market,social security,criminal law,international peace keeping,income growth and distribution have a bearing on child labour.However,in order to describe the age limit that define a child,fixing the borderline between childhood and adulthood is a daunting task.Many aspects need to be considered:physical and psychological development,social norms and economic environment.Analysts have paid little attention to the demand for child labour.It is often suggested that the advantages of child labour are that children are less expensive to employ than adults and easier to control.Furthermore,technological changes influence both the demand and supply of child labour.If new technologies,like mechanisation and improved strains are introduced in agriculture,more skilled manpower is required.The demand for unskilled labour in general and child labour in particular is bound to fall under such circumstances (Cigno et. al 2002). Bachman (2000) points out the link between child labour and international business.International business has come under increased pressure from social activists,trade unions to find new solutions and help them get the education and training they need to become productive adults.The linkage between child labour and trade makes child labour an indirect concern for many businesses.Even if firms do not employ children,they operate within a global system of commerce,manufacturing,procurement and trade.Businesses role in the economy of child labour has three dimensions,both in the formal and informal economic sectors.Firstly,a firm or enterprise may employ children directly.Secondly,Goods and services produced by children are purchased by other firms.Lastly,a firm or a business plays a part-beyond its direct business interests-in shaping opinions and policies concerning child labour in the local economy. Globalisation has increased awareness of child labour,but there is also a perception that globalisation has resulted in an increase in the amount of child labour.The commonly cited mechanism is that trade between unskilled-labour abundant /developing country and a skilled labour abundant/developed country will raise the relative rate of return to unskilled labour in the developing country.This change lowers the return to education and raises the opportunity cost of an education,thereby stimulating child labour.Child labour is a consequence of both demand and supply of child labour.It is clear that technology and other demand side factors interact subtly with household dynamics,culture and market and political failures to determine the labour force participation rate of children.Moreover,it is important to bear in mind that parents are the single largest employer of children.In many cases,parents employ children in the household,family enterprise,family farm or in the factory to keep the family intact.However,it also appears to be the case that families turn to internal markets because parents face a host of incentive problems when non-family members are employed (Brown et. al 2002). Sakamoto (2006) empirically investigates the determinants of child labour in rural India. Child labour in India is associated with a variety of factors, such as household poverty, low parental educational attainment, absence of schools and parents attitudes towards children in the household. Incidence of child labour is positively associated with household poverty. The study suggests that in order to reduce or eliminate child labour,the government should implement policies to address the various factors causing child labour,such as parental lack of concern for their children, imbalances in the power structure within households and household poverty. Many recent studies have attempted to track the supply side factors that affect the incidence of child labour and found that these have a high association with the incidence of poverty.Such studies attempt to examine the phenomenon of child labour in India form a preliminary search for the factors which affect the demand and supply of child labour.Arguments and evidence highlighting the role of community factors in important individual and household decisions that generate social outcomes like incidence of child labour,non-participation of school education and household’s fertility decisions are presented in great detail.A large number of these micro decision factors are found to be mutually reinforcing in positive or negative ways.Where the reinforcement is positive,it is called a virtuous spiral and in case of negative reinforcement it is termed as vicious spiral.To delineate such patterns at the state level,the studies attempts a factor analysis in which economic,demographic,educational and economic poverty variables are included.States in India like Andhra Pradesh,Uttar Pradesh,Madhya Pradesh,Bihar and Rajasthan are caught in the vicious spiral.The virtuous spiral is prevalent in states like Kerela,Himachal Pradesh,Punjab,Tamil Nadu and Gujrat (Chaudhri et. al 1999;Chaudhri 1998).Sectoral distribution of working children has been widely explored and data emerging over the last few years have shown that gender differentials with regard to the work children do increase both with age and with the dangers children face in the workplace (Hagemann et. al 2006).Chaudhri & Wilson (2000) clearly bring out the concept of ‘nowwhere children’ or children who are neither in schools nor in labour force,in a systematic study of the important dimensions of child labour in rural India.It has been observed that full time child labour in has been declining for the last decade but continues to be an overwhelmingly rural phenomena,with a large number of girls in the nowhere category.Moreover,concentration of child labour in some states in the age group of 10-14 years is a pointer for a urgent need for a focused policy.State to state variations and inter-district variations within states are large and increasing due to uneven rate of demographic transition and major differences in attitudes to or success in rural school education programmes. Grimsrud (2001) reveals that child labour differs in countries over time but seems to have a more constant presence in some industries where labour intensive technologies cannot be replaced by capital intensive technologies.Trade reduces the profitability of education and Research and Development in the poor country as it places local entrepreneurs in competition with a rapidly expanding set of imported,differentiated products.It may drive the country to specialise in production rather than research,and within production to shy away from hi-tech products,favouring instead,traditional,possibly stagnant industries,which use its relatively plentiful supply of unskilled workers,thus slowing innovation and growth. A recent study conducted by Murshed (2001) establishes a broad typology on the different types of child labour across the world,so that policies can be designed to tackle the myriad determinants of child labour.Acts like household chores,apprenticeship,waged labour and bonded labour fall into the different categories of child labour.International and political factors may also be important in affecting the demand for child labour.Increasing globalisation and the dependency of many developing countries on access to industrialized markets may link the vulnerability of an economy to child labour.On the one hand,increasing globalisation makes the national actors more vulnerable to external pressure from international markets.On the other hand,the increasing necessity to compete on the global market may compel industries to employ more children in an effort to reduce labour costs and gain a competitive advantage.Venkateswarlu (2007) reports the use of child labour,particularly girls in theproduction of hybrid cottonseeds in India which amounts to large scale violations of child rights owing to the exploitative conditions and less than minimum wages paid to child labourers.Children are employed in order to minimise costs,since in cottonseed production,labour costs account for fifty percent of total cultivation costs. DISCUSSION Child labour emerged as a global issue when many developed countries started fearing that exports from the developed countries owing their competitiveness to low labour standards,could result in transferring jobs to the third world.The Child Deterrent Act introduced in the U.S in 1993 argued that a worldwide ban on trading goods produced by child labour would benefit the exporting countries practicing child labour through reduced adult unemployment.The rationale behind this is that,since children’s work could be done by adults but is paid much lower wages,employers prefer to hire children rather than adults.This causes adult unemployment which in turn forces adults to put their children to work and this generates a vicious circle.To the extent that children compete with adults for the same jobs,child workers affect adult employment or adult wages depending on the structure of the labour market.If adult wages are downward flexible,child labour is likely to decrease adult wages without affecting adult employment.If adult wages are at the survival minimum,child labour displaces adult employment without affecting adult wages.Finally,if both adults and childrens wage rate are pinned down to the same legal minimum,the impact depends on the employers preference for children relative to adults (Galli 2001). Siddiqi & Patrinos (n.d) suggest that schools represent the most important means of drawing children away from the labour market.However,children will not attend these schools without an economic change in their conditions.Free education and food supplements prove to be of enormous help in such circumstances.The problem with complete abolition of child labour is that education and employment for children are not mutually exclusive,making immediate abolition not feasible.Many children have to go to work in order to afford tuition or other fees.Such complex issues surrounding child labour have varied implications for the international community.The collection and study of data concerning child labour is highly important in order to devise interventions to allow for the possibility of children being in school and working.The quality of schooling must be improved by investing in education and subsidies must be provided to poor families prone to having working children so that they can afford their children’s schooling.Establishing partnerships of international organisations dedicated to improving children’s lives is of prime importance to combat the growing problem of child labour. Measures that reduce child labour as a by-product of increased productivity of adults and social equity are psrticularly desirable and advisable.Among such measures that are particularly worthy of consideration,are health policies that directly and indirectly reduce mobidity and mortality,educational policies that reduce the marginal cost of school attendance,and social security policies that reduce the demand for children as a form of investment (Cigno et al 2002).Policy makers and social analysts at the international level have always oscillated between a a position of total abolition and amelioration of the conditions of child labour.But the ground realities have led to an awkward combination of the abolitionist approach with one which emphasises amelioration of the conditions of child labour.This is reflected in ILO’s IPEC programme ,the long term objective of which is to eliminate child labour.But a transitional period is envisaged wherein the attempt is to ‘regulate and humanise’ the employment of children.However,there has been an increase in tide of abolitionism with international organisations like UNICEF taking a position that abolition of child labour is not negotiable,and that child labour must be ended even before poverty is ended.This current of abolitionism is mounting precisely at a time when the developing world is forced to accept policies of structural adjustment,which make the position of these countries and the poor in them more vulnerable.The negative consequences of these policies have been acknowledged with the international agencies articulating the need for a ‘human face’ to structural adjustment (Raman n.d) Galli (2001) argues that some recent efforts to protect jobs in developed countries are misguided.Competitionfrom developing countries is probably not the cause of unemployment in developed countries.Under the guise of protecting worker’s rights,some developed countries propose that minimum global standards be adopted.However,developing countries are of the opinion that such measures would rob them off their competitive advantage.Many see this issue as rich nations attempting to wipe away developing countries,by arguing for human rights.Genuine human concerns are hugely important,but protectionism is not the answer.High levels of unemployment have many other causes,other than trade,so labour standards in one country may not affect the levels of unemployment in another.Moreover,threatening trade restrictions based on labour standards is not justified.The problem with such a stance springs from the fact that ,not all forms of child labour is exploitative or cruel and the age deemed child labour is not clear.Poor countries cannot necessarily afford such measures and such measures can cause further decline in school attendance.Furthermore,free trade is only a part of the solution to eradicating child labour.This is because a free trade regime promotes development worldwide.And as countries develop,the incidence of child labour decreases substantially. In India,despite the provisions of restrictive labour laws,the practice of child labour continues unbated because exploitation of children is of financial advantage to employers and an economic compulsion to parents.In India,the number of minors in the formal sector has shown a declining trend due to the various labour laws curbing child labour.However,the spread of urban poverty has pushed a large number of children in the informal sector.International measures such as banning the importation of goods produced by child labour or sanctions against countries that do not pass laws against exploitation of children can be helpful only because they cause the demand for child labour to decline.Like trade sanctions,such measures harm the countries to which they are directed and and particularly the poorer strata of society ,from where child labour originates.In case of the carpet industry in India,if children were not employed in the carpet industry in India,it could not effectively compete with Iran or Pakistan.Thus ‘labour standards’ and international sanctions may risk making the problem worse rather than better unless they are accompanied by some form of compensation (Cigno et. al 2002).A popular form of action to curb child labour and uphold international labour standards in general is a product boycott by consumers.There are labelling agencies that inform us if,for instance a carpet or hand-stitched soccer ball is free of child labour.The presence of a consumer boycott will typically mean that products tainted by child labour will command a lower price on the market than the ones certified to be untainted.It is popularly presumed that such consumer activism is desirable.However,it has been noticed that boycotts can,in a wide class of situations,have a backlash that can cause child labour to rise rather than fall (Basu & Zarghamee 2005). Recently international pressure from Human Rights groups and the media have altered the policies of government,companies and foreign markets towards child labour.Corporate codes of conduct and other business guidelines prohibiting the use of child labour are becoming more common as consumers as well as religious,labour and HR groups start calling upon companies to take responsibility for the conditions under which their products are manufactured.However,the percentage of children employed in the export sector is small,so only pressurising the export sector will not eliminate child labour nationally.Even though there is substantial historical and economic evidence suggesting that economic development and modernisation are key factors in eliminating child labour,direct government intervention often centres on legislation.Laws specifying the minimum age of entry to employment,prohibiting child employment in certain occupations or activities,and regulating it where it is legally permitted,have been enacted in almost every country in the world.In terms of international law,there have been a number of important conventions around child labour,including the UN Convention on the Rights of the Child (1989) and the ILO Forced Labour Convention (1930).The most comprehensive being the ILO Minimum Age Convention No. 138 which obliges ratifying states to fix a minimum age for admission to employment and pursue a national policy designed to ensure the effective abolition of child labour.However,enforcement of laws in developing countries like India is grossly inadequate.Inspectors often operate in a particularly unfavourable environment when faced with public indifference,apathetic authorities,hostile businessmen who fear losing their profit margin and complicit children and their parents.Developing countries are not going to be able to compete on the world market if they continue to rely on minimal amounts of human capital.The use of child labour in the face of globalisation and increased international competition will become a detriment to developing countries that are planning to base their growth on exports.The moral dimension of child exploitation sets an imperative to step up intervention rather than allow it to continue.The use of children in dangerous workplaces in industrialised countries does not justify exploitation of children.Some societies that have a low GDP per capita have successfully reduced child labour through alternative approaches,such as Kerela in India.Abolishing the most abusive forms of child labour is the first priority for developing countries,since immediate abolition of child labour is unrealistic.ILO has prepared a convention that targets the most hazardous forms of child labour.It argues that focusing on clear Human Rights violations will make it harder for nations to avoid taking action by pleading poverty.Furthermore,since all child labour cannot be attacked immediately,in order to avoid a situation in which the reduction of child labour in one sector of the economy leads to an increase in another,providing appropriate protections and benefits for those who must work to survive is the best immediate policy solution (Murshed 2001) CONCLUSION Child labour impedes human capital accumulation,depresses a country’s labour productivity and growth in the long run.Low education is also associated with lack of awareness of rights and democratization,negatively affecting growth and social development(Galli 2001).Child labourers do not enjoy the rights to claim the social and legal benefits that should be due to them,making them particularly vulnerable to abuse and largely incapable of protecting themselves(Murshed 2001).Inspite of recent developments,including many companies adopting independent strategies to help children directly or indirectly in their communities,it is noted that relatively few companies have gone beyond adoption of a ‘code of conduct’ to ensure that children removed from the workplace were placed in school or some other training(Bachman 2000).Since,the influences on child labour are numerous and complex,the international policy response that targets a single dimension of child labour is unlikely to be effective.Furthermore,policies that are designed must take local conditions and localised types of child labour into account.