Friday, 22 May 2015

You say make in India. Are we making India?

India has a regime of archaic, multiple and complex labour laws, which on one hand have acted as an impediment to the growth of maufacturing enterprises in the country, on the other hand their very existence and complexity has kept out the maximum number of the very labourers they seek to protect. To avoid harassment by industry inspectors and restrictive exit laws, firms prefer to hire contractual labourers or shift towards capital intensive manufacturing. All this adds to increasing levels of unemployment in the country, denies maximum labourers social protection who are forced to end up in informal sector, besides causing revenue loss to the economy.

It is thus imperative to reform India's labour laws. The manner of this reform has remained an issue of debate in policy circles, especially between the centre and states, as labour is a concurrent list subject, and any amendment to existing law by states requires presidential assent. This often creates frictions regarding details as seen in Rajasthan and madhya pradesh attempts towards labour laws regulations.Another debate is whether to consolidate and universalise labour laws or let them be sector specific eg. Plantation workers, mine workers, cigar workers and so on.Then there is the complex issue of labour law reform in SEZs which are hardly regulated and this has sometimes led to individual violence against managers as seen in maruti suzuki's plant on outskirts of gurgaon

Lately both center and state govts have taken many initiatives towards labour reforms. Eg Last year a new inspection scheme based on a combuter based allocation o indutry for inspection and transparent pubication of report on the website was initiated by center along with a unified shram suvidha portal to ease the filing of compliance reports for 16 central laws. There was also an apprenticeship protsahan yojana and a revamped RSBY. States like Rajasthan have shown big ticket reforms related to chapter VB of the Industrial disputes act governing retrenchment.

There is still lots of work to be done. Reforms need to address the employees provident fund sceme, where formal employes have no choice but to contribute a part of their income to it. They must have freedom to choose between EPFO a limted and inefficient fund manager andthe National pension system. recently, cabinet has proposed some amendments to this law as well. women employees within the govt welfare schemes, like the Anganwadis, who are not covered under the labor llaws need to be made permanent. For better implimentation of skill india, its imperative that the issue related to apprenticeship act 1961 and apprenticeship training scheme be resolved soon. There is also need to address the complex isssues related to contract labour, bonded labour and child labour.

 Finally labour law reform is an ongoing process and will have to be piloted jointly by center and the states.

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