PMO Seeks to Hasten Labour Reforms

Trade unions say the proposed reforms are pro-corporate and the govt is taking a unilateral approach towards it

Within days of Prime Minister Narendra Modi assuring business leaders that the government will create enabling environment for investment, the Prime Minister's Office (PMO) has asked the labour ministry to step on the reforms paddle. Officials of the labour ministry met those of the PMO on Friday , and then a day later they met the top brass of NITI Aayog, the government's policy think tank, to lay down the strategy for action. While the planned labour reform may bring cheer to industrialists and investors, it is unlikely to go down well with trade unions, which earlier this month went on a nationwide strike saying the measures will endanger jobs and make lay-offs easy .

A senior government official told ET that the labour ministry made an informal presentation to top offices of the government to convey the reforms undertaken by the ministry and the way for ward. “We are committed to labour reforms for economic growth of the country and would carry on the work initiated in the direction of labour reforms,“ the official said on condition of anonymity .Trade unions say the proposed reforms are pro-corporate and that the government is taking a unilateral approach towards it. Modi had assured trade unions at the recently held Indian Labour Conference that his government would pursue all reforms only through stakeholder consultations. The official quoted earlier said the government is determined to press ahead with reforms.

“Consensus and consultation are two different things. We will continue to consult all stakeholders on the reforms undertaken by the government, but we may or may not arrive at a consensus,“ the official said. After coming to power, the BJP-led NDA government has announced a slew of labour reforms, including codes on industrial relations and wages and mandatory minimum wages. The draft Small Factories Bill, Factories (amendment) Bill, Em ployees' Provident Fund (amendment) Bill and the Employees' State Insurance (amendment) Bill are some of the other key proposals in pipeline. Besides, the government is finalising social security measures for domestic workers and contract workers by making appointment through staffing firms mandatory, a move that will help to formalise India's huge proportion of the unorganised workforce.

Of the estimated 400 million workforce in the country , barely 7% are in the formal or organised sector. The rest constitute the unorganised workforce, which is often deprived of minimum wages and social security .

Industry is all in with the government over its labour reforms.“The whole approach of the government is very positive. They are moving ahead with consolidating all labour laws into four codes while keeping in mind the interest and welfare of the workers,“ a CII official said, adding that these reforms will help both the labour and the industry and would help in employment gen eration. Although the government has ramped up public investments through a series of initiatives to fuel economic growth over the last 15 months, the private sector has not yet shown willingness to take risks due to lack of demand and legal hurdles over land acquisition and labour reforms.

Hence last week Modi urged India's top industrialists to open up their purse strings to invest in the domestic economy and create jobs in the wake of opportunities thrown up by the global turmoil.The meeting was attended by at least 40 industry biggies including Reliance Industries chairman Mukesh Ambani, Tata Group chairman Cyrus Mistry , ITC chairman YC Deveshwar, and Aditya Birla Group chairman KM Birla, besides heads of three apex industry chambers, FICCI, CII and Assocham.

Labour's Love Not to be Lost

The government's push on labour reform is welcome. India operates in a rapidly globalising world. Therefore, the content of labour relations must undergo a big change. True, policy must internalise the dynamics of such globalised production.But the government should also ensure that the huge gains from growth are shared in an equitable way. Only then can industrial relations focus on raising productivity. Workers will also need to be assured that their welfare will be a priority in policy-making.

The Economic Times, New Delhi, 14th Sept. 2015