HYDERABAD: Investments and job creation is the need of the hour, but first, the Central and state governments should pursue labour law reforms, observed SBI Research. Currently, there are over 44 Central and 100 state labour laws, which analysts believe hamper companies from improving employment.
Importantly, the absence of labour law reforms also implies that India remains among the countries with the highest man-days lost. For instance, as per data available with the International Labour Organisation, the man-days lost in India stood at a staggering 23.24 lakh as against 10,000 in Russia; 1.7 lakh in the UK and 7.4 lakh in the US.
The Ministry of Labour has categorised all existing Central labour laws into four codes: Labour Code on Wages; Industrial Relations; Social Security and Welfare, and Occupational Safety, Health and Working Conditions. According to SBI Research, of the four codes, the one on wages was introduced in the Lok Sabha in August 2017, while the remaining three are still in pre-legislative consultation stage and should be completed urgently.
“Separately, a national policy for domestic workers needs to be brought in at the earliest to recognise their rights and promote better working conditions... steps may be taken from both state and Central legislation to take the labour reforms forward,” the report noted.
It added that companies on their part should adopt and implement standard operating procedures across all segments of the business. “While the company management can take administrative decisions based on the exigencies and business scenario, it should be ensured that hiring and firing should always lie within the laid down SOPs and should not be exercised outside the ambit,” the report explained.
Stating that the initiatives taken towards labour law reforms until now were miniscule, the SBI report noted that in an economy like India, which has a large workforce, it was important to improve employment and employability, streamline labour issues and develop adequate means to absorb the labour in the economy. As such, labour law reforms are essential, as investors prefer stability and sustainability.