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Image for representation. (Reuters)
Several state governments have relaxed labor laws to attract more investment and kick-start the demand cycle after days of closure that have seriously affected the economy.
- News18.com
- Last update: May 8, 2020 4:08 PM IST
New Delhi: In an attempt to revive economic activity in the country, several states have relaxed labor laws. They claim that the intention is to attract more investment and kick-start the demand cycle.
The move has sparked debate among experts about the archaic nature of labor laws and whether they are responsible for the lousy state in which India’s unorganized sector currently sits.
in a series of tweetsShruti Raajagopalan, Mercatus principal investigator, affirmed that the country’s labor codes are self-destructive and have resulted in more damage than protection for the sector.
“Those who mourn the loss of labor protection because UP and MP suspended labor regulation must understand that 90% of India’s labor force never had such protection in the first place. The restrictions prevented hiring or created a “contractor / dalal system,” he wrote in one of his tweets.
“It only served union workers, a small fraction of Indians in the formal sector, labor inspectors, middlemen and champagne socialists. The cost of keeping this small contingent in business has left 90% in the informal sector, totally unregulated and without protection, “added Rajagopalan.
On Thursday, Madhya Pradesh Prime Minister Shivraj Singh Chouhan announced the abolition of the requirement to fill out 61 registrations and 13 declarations, stating that only one registration and return will be sufficient to obtain the license.
It also allowed overtime of up to 72 hours and the period of work shifts in factories increased from eight hours to 12 hours.
Following the example, the Yogi Adityanath-led government in Uttar Pradesh removed labor laws (except three laws and one provision) for the next three years to provide a cushion for fallen businesses and factories in the state.
Now, industrial units also won’t have to worry about inspection or compliance officials knocking on their doors, as they wouldn’t investigate whether labor laws had been implemented.
Similarly, in Rajasthan, the Ashok Gehlot government has amended the Industrial Disputes Act to raise the threshold for layoffs and downsize to 300 from 100 before. In addition, it has allowed to increase the working hours from eight to 12 hours per day.
Punjab, Himachal Pradesh and Gujarat have also amended their factory laws in the past month to increase working time to 12 hours a day and 72 hours a week, compared to eight hours a day and 48 hours a week.
Meanwhile, Raajagopalan’s arguments were countered by an Ombudsman Manoj, who provides guidance to entrepreneurs.
“The decisions of Indian entrepreneurs are seldom influenced by labor laws. (I’ve been there and continue to help and advise entrepreneurs) … In fact, labor laws are the least-considered factor in establishing an industry. ” wrote on Twitter.
“The dire need for amendments to some sections of labor laws is being used to justify the abominable erosion of constitutional rights … Again, in addition to labor laws, there are 1,000 other factors that have prevented industries from prospering. labor laws with all the ills, it is an exaggeration, “he also said.
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