Unless you belong to the ideological Left — and even if you do — it is impossible to argue that India’s complex web of labour regulations serve the public interest.
Simply put, they are part of the reason why 90 per cent of India’s labour force is “informal”, without the basic protections that law ought to have given them. Our labour laws are part of the reason why we have failed our migrant workers, millions of whom have not been paid their wages, have been prevented from going home, were killed on the rails and are trying to walk the long distance home. Over the past few decades, both employers and workers have found a working optimum outside the Kafkaesque labour regime, which more or less worked during normal times, but showed its failings during the coronavirus pandemic-triggered lockdown.
Consider the counterfactual — if a greater proportion of our workforce had enjoyed the basic protections of employment, the migrant crisis might have been less acute.
So, when Uttar Pradesh and Madhya Pradesh, two Indian states that acutely need new economic engines, surprisingly announce that they intend to do away with a substantial chunk of their labour laws, they deserve the right kind of support.
Also read: Like an MEA to help NRIs in crisis, India needs a system for its internal migrants too
What are the objections to reform?
In addition to the traditional opposition, the current attempt at labour reform is controversial for three reasons.
First, that it is being pushed, in Uttar Pradesh, by Yogi Adityanath’s government, which has followed a hardline Hindutva agenda, shown little regard for constitutional norms, and brutally suppressed the anti-CAA protests before the pandemic upstaged everything. The bona fides of such a government, the argument goes, are suspect.
Second, that the economic crisis caused by the lockdown has already caused millions of job losses, and labour reform will make things worse for workers.
And third, exempting employers from all but four labour laws will undermine the rights and protection of workers, leading to their exploitation.
Unless you are a hardcore BJP supporter — and even if you are — there is little doubt that the Adityanath government’s track record is dubious at best. The manner in which it managed the anti-CAA protests was particularly shameful.
Yet it is entirely possible to oppose and condemn its social and political acts in the strongest terms while simultaneously treating its labour policy on its own merits. Yes, the politics cannot be kept out of economics, but economics also imposes constraints and discipline on politics. One reason the southern states are better governed is because their economic considerations — including the upside for the political class — limit the damage unbridled populist politics can do.
To the extent the Hindi heartland could also be bound by the economic straitjacket, it might even improve its politics. Labour reform is not a bad idea merely because a party or politician you do not like is implementing it. Political partisanship should not destroy our ability to judge public policies on their own merits.
Also read: India’s labour reforms trying what Bangladesh, China, Vietnam did — swap income for security
But India also needs jobs
This brings us to the second point: is this economic crisis a good time to push drastic changes to labour laws? The short answer, actually, is “yes”.
Even before the coronavirus crisis, the Hindi heartland was struggling under the weight of its demographic dividend. If India needed to create 20 million jobs a year, the northern states accounted for the largest chunk of that. It is because of a lack of employment opportunities in their home states that lakhs of workers went thousands of kilometres in search of jobs. If the Covid-19 crisis eases in a matter of months, many of them might be able to head back again. If it doesn’t, then the northern states will find they have millions more looking for jobs. Jobs don’t grow on trees, nor do they grow in government. With state finances flashing red, state governments’ ability to expand MGNREGS or similar schemes is also limited.
So, what has been clear for decades is now bleedingly so: India in general, and northern states in particular, need to create millions of job opportunities especially at lower skill levels. Despite every generation of politicians and policy wonks finding excuses for “why mass manufacturing is not the answer”, mass manufacturing, along with infrastructure industries, is pretty much how every other big country solved its employment problem.
We now think artificial intelligence and robotics will replace Chinese workers, and so “manufacturing is not the answer”. Even if we accept that for the sake of argument, there is a window of opportunity between the jobs shifting out of China and being replaced by robots in California. That window of opportunity can stretch into years. What’s wrong with buying time and employing millions of Indians in manufacturing industries for say, five years? We might be getting in the game at the tail end, but better late than never.
Signalling early and moving fast is certainly a necessary step to wrest some of the jobs moving out of China. Whether or not it is sufficient is another question. Yet it is undeniable that without labour reform, India cannot address its demographic challenge.
Also read: India’s heartless capitalists deserve the labour shortages they are about to be hit with
The unanswered questions
What about the third count? Will exempting employers from labour laws hurt the protections workers enjoy? Even in the worst case, assuming all employers are exploitative, only around 10 per cent of the workforce, the “formal” bit, is affected. On the other hand, if a more relaxed labour environment leads to greater investment, it will cause more people to be employed, and also increase the numbers in “formal” employment.
In other words, it is more likely that a rational labour framework will lead to a larger number of workers enjoying basic protections. Why can I say this with confidence? Because we have more than a century of empirical evidence from Europe, America and East Asia for it.
A lot depends on exactly what the new labour landscape in Uttar Pradesh and Madhya Pradesh looks like. Contrary to what people think, it is almost certain that basic protections will remain on the books, while a lot of the cholesterol will be cleared out.
But labour reform is only a necessary condition for the massive growth of employment. What we should be concerned about is whether investors will build plants in a country and in states where rule of law is fraying, where governments treat contracts as political footballs, where some corporate houses always enjoy favour, and where social harmony is purposefully wrecked.
What about our courts — which might rule, years later, that all jobs that came under the new regulations are null and void? How can the Narendra Modi government assure investors that they need not allow such political risk assessments to deter them?
The author is the director of the Takshashila Institution, an independent centre for research and education in public policy. Views are personal.
No minimum wages. No minimum working conditions. What’s left to give away ? Bonded Labour ? Rome was very successful economy, what it was built on slavery. But in context of 21st century we cannot even contrive of such a system. This little thing is called human progress.
Sure diluting these reforms may bring som pace in economic recovery, but we must also think of the human cost involved. Thr argument that since 10% of the labour is formal and so the reforms won’t matter much, is baseless. Would you allow 10 % of murder covicts to go home to save some space in jails ?
Labour reforms is not the solution for unemployment. Population control is. Why hasn’t the govt of India adopted one child policy yet ?
We need to ask the right questions, tackle the problem at source instead of making knee-jerk reactions and giving way to human exploitation.
Unless Yogi puts at least 10,000 coRONA viruses ( extortionists) behind bars UP can not improve .. factory culture
The author has underlined rightly the need for the implementation of such labour reforms as shall facilitate creation of more jobs and bring most of them in the formal sector that is generally seen as compliant with labour laws by force or otherwise. But he has not bothered to discuss very poor workmanship and productivity of our trade union minded factory workers due to undue protection by the labour laws. That renders Make in India products no match in the competitive markets of the world. Hence poor exports with less margins is the fate of products churned out by labour force most indulged into for reasons other that efficiency and merits. The urgent need for the presence of equally skilled and productive labour force is inevitable if our country wants to attract and retain extra jobs that are likely to be moved out of the PRC in near future. Rationalisation of labour laws, if it can achieve this dual purpose, should be most welcome.
The author should have specificied the major drawbacks of the present set of laws and the major benefits of the proposed legislation. One question: Is the author not aware that 12-hour shifts are still subject to the ‘weekly-maximum-hours’ restriction in the western countries and the weekly max. is rarely more than 40 hours? I know that the U.S. and the Far East are not too strict on this but the western European countries are in favour of even reducing the weekly-max hours restriction. Which countries does the author have in mind? The article suffers from its vagueness and selective comparison.
Laws and rules are of no use if they can’t be enforced. And for proper enforcement, we need an efficient police and judiciary, which is not the case currently. This is the root cause of problems in this country. Hence, before anything else, we need police and judicial reforms. Only then will any other thing work well.Otherwise, all this talk will remain as just talk.
If the argument is that only 10% of the industry follows the labor regulations, then the vast majority of the industry ISN’T restricted by the regulations and so ‘relaxing’ the regulations isn’t going to increase the industrial output.
it’s amusing to see an instructive tone, on what is a personal hypothesis. Are you exhorting that laborers in Europe and America work devoid of regulations that safeguard laborer interests? It’s interesting that you consider trusting – what you yourself call shameful antecedents – as an enterprising bold step. The logic hawked is so warped. Let’s see: On the one had employers are being exhorted to please not fire people. And then you let fly the permission to hire an fire at will. Then write an article exultantly that this is just the swashbuckling dumbstruck move, that will seize the day and have all the bright dramatic colors of a twinkling buoyant suncri9se. You really expect all to abandon common sense and believe that? People who lash out such startling decisions, don’t have even the decency to explain their edicts that pummel lives. And here you are working yourself into a frenzy possessed that if they have done something like this. it should surely be right? Let me write out all fantastic reasons. It’s like Nithyananda claiming he caused the Sun to rise late. Amen.
why are u always anti yogi…he is know for his honesty, integrity and dedication. He is a tough guy no doubt and that’s what UP needs now. He is definitely much much better than Mayavati, Akhilesh Yadav and Mulayam Yadav.
The author does not adequately and clearly changes in labour law with increased employment in formal sector and greater productivity. Instead of quoting foreign experiences reference to our better off Southern states and employing existing laws and migrants should have been outlined. Specifics are missed in the article.
To increase production and employment at lower skill levels there should be Three 8 Hour shifts in every production enterprise. Increase to 12 hour working will not be required. The production infrastructure will be exploited to its maximum.
Infact now that we have adequate power why not extend this approach across the board let us say even the courts!
To attract investors the Government needs to have Skin in the Game with adequate safeguards as compensation to investors in case the laws & commitments are repealed as they usually are done quite often with retrospect effect. Labour laws simplified is the need not just changes that can be unfair to either part to simply showcase how one can fix a problem with commitment the polity doesn’t intend to keep. So rightly pointed out Labour laws friendliness alone are not sufficient conditions to attract the Big Bang investors.
One more experiment after demonetisation and GST, without consulting the experts and without debating. Hope, it will work.
The main basic reason behind the plight of labour is their illiteracy of all kinds-academic,psychological and moral, under the overall canopy of societal corruption of all kinds.How come labours are so easily influenced and exploited by fake rumours and lack that moral and psychological fibre to withstand adversity with some patience, inspite of having mobiles and even smart phones, but for their comprehensive illiteracy? Not one among them has the moral courage to verify or dispute the rumours ,nor there is any dedicated organisation of migrant labours at the level of trade-union or/and government to guide them .
The govt must be accused of utter dishonesty and insensibility in not creating a data-base of migrant labours with their addresses,Aadhar no etc and in not creating a dedicated department of migrant labours at Central and State level .
The very act of creating a data -base of migrant labours with a dedicated department of govt to look after them would have solved most of the problems .
But who has time for those miserable creatures ready to walk for thousand miles ,sleeping on the rail -track for being overrun by the train-shame on the corrupt society and heartless govt and Narendra Modi ultimately !!
Your comment about Yogi’s handling of Anti CAA protest in negative light is objectionable.
In fact his handling was best as compared to Kejariwal’s at Shaheen bagh, which resulted in a communal riot in NE Delhi.
Wow. What a logic! Labour laws are not sufficient for protection of worker; so abolish them. Likewise I can say that law against corruption is not sufficient (just an example, not mean it); so must abolish it. Is it exceptable? No minimum wages, i.e., whatever you like to pay; 12 hrs work, i.e., at meagre salary you work harder/more; no safety regulations, i.e., majdoor mare toh mare, dusra aa jayega; no hygiene requirements; etc.
Labour reform is worst decision in a socialist republic
The Print is fast becoming a platform where apologists for and cheerleaders of the government can masquerade as balanced commentators. What the author says is close to nonsense because
1. Irrespective of whether lack of labour reforms is the one single impediment in the path of India achieving economic glory , a ‘reform’ necessarily needs an alternate proposal to status quo. The UP government has announced suspension of most labour regulations but has not offered an alternate viewpoint. The existing laws are merely in abeyance. This is not reform but mere withholding of laws. So, the title of the piece itself is misleading.
2. UP being a place where all laws, including labour laws, are flouted openly and shamelessly, industrialists are unlikely to be excited by mere formalisation of what they know is anyway the state of affairs. Since minimum wages are never paid and working hours are not enforced even when laws say they should, abrogation of the laws provide no incentive to treat UP as an improved investment destination.
Those who are trying to pass off gross,inhuman injustice as ‘reforms’ are the real enemies of the people. They are neither Left nor Right, they are simply blind.
I never would allow affection or its converse colour my assessment. Like Churchill in that respect … Good news should come out of Uttar Pradesh. It affects the well being of 200 million Indians.
Labour reforms is the need of the day. Otherwise, entire economy will collapse. The labour force will be scatterred and unorganised resulting the labour will start starving . Nobody can help. Request all labour unions to think in progressive mind . This is for the benefit of the labour, the economy of the country and for the growth.
Yes it is very good idea till you and your family is not labour.
Taking a sledge-hammer to the little rights workers have is not “reform” – it is a step towards modern slavery.
Usual hate mongering headline by The Print.
Yogi ji is well liked. People think highly of him & he is well regarded as a competent administrator.
Free market zindabad, CM Yogi double zindabad.
The thug calls Islamist uprising in the name of Anti CAA as protests. The left is so aligned with Islamists that they would prefer kafirs to be wiped out than the Islamists from being suppressed.
leave the job to yogi. He is able, honest and knows his obligations to his people and takes advice from experts on subjects he does not know. His brand of communism and socialism is different from that of our party stalwarts and the biased media which supports them. enforcing discipline on the anarchy of the mob is understood well by the right thinking lndian.this indiscipline is the bain of lndia and the reverse is chinas success though it goes to the other extreme violating human rights. Yogi knows what he is doing. and above all has his states andindias interest in heart.
The comment is not duplicate .till now it was told that there is error in the e mail. So another one was sent.
leave the job to yogi. He is able, honest and knows his obligations to his people and takes advice from experts on subjects he does not know. His brand of communism and socialism is different from that of our party stalwarts and the biased media which supports them. enforcing discipline on the anarchy of the mob is understood well by the right thinking lndian.this indiscipline is the bain of lndia and the reverse is chinas success though it goes to the other extreme violating human rights. Yogi knows what he is doing. and above all has his states andindias interest in heart.
Such a biased n shitty article by the print
Whether you like or hate Yogi, that is your politics. But Yogi has moved in time to nip in the bud the utter nonsense that was going on under the garb of anti CAA protest. That is for fact, given what happened later in Delhi. The changes in labor laws brought in by Yogi is another instance of his being spot on the target. However, he needs to do much more and remove all the hurdles which an ordinary trader or businessman faces due to interaction with any state agency or department. Our bureaucracy is not only badly corrupt but ensures that decisions are unduly delayed thereby making the working of state agencies totally inefficient. Until this is done and discretionary powers of bureaucracy and scope for corruption are removed and laws simplified, Yogi has not delivered. If UP has to become Uttam Pradesh, he should not waste any more time. Labour law changes is just a minor change.
Why continue to call them labour reforms when everything is being decided without taking labour on board?
How can anyone sitting in govt decide that the workers will henceforth put in half day extra every day without guarantees of full pay or job security or even guaranteed first aid.
If work is so easy, why do the hereditary owners and CMs or this writer not trade places with factory workers and get a taste of the hard labour themselves? Let us challenge a single CM or owner to work on the shop floor for 12 active hours for one entire week.
You must be living in some communist La La land. Look at the roster of duties of a doctor and the number of hours he works daily. Workers would be more than happy to have jobs. 94% labour is today informal with no guarantees whatsoever. The size of Indian factories is miniscule as labour laws hinder the increase in size as they become tougher. And dolls like this argue from an ideological point of view without looking at ground situation. Their brains have been hacked by Marc.