Tamil Nadu is ranked as one of the top six States for being investor-friendly as well as faring better than other States in the labour reform index, according to a study by the Export-Import (EXIM) Bank of India. The study ‘Comparison of Labour laws: Select Countries’, which was released during an event organised by the Madras Chamber of Commerce and Industry here, states that the State scored well in the labour law reform index as well as progressed in the industrial development when compared to States like Uttar Pradesh, Assam, Bihar, Jammu and Kashmir and West Bengal which are ranked low in the labour law reform index.
The other five States that fared well are Maharashtra, Andhra Pradesh, Karnataka, Gujarat and Madhya Pradesh.
The study highlighted that per unit employment in India is low despite the fact that India’s manufacturing base is largely labour intensive.
The study said that the average number of workers in an Indian firm at 75, in comparison to China’s 191 and Indonesia’s 178.
The study said that provisions of labour laws could be one reason for the enterprises remaining small in size. Interestingly, even the Economic survey 2012-13 has also said that outdated labour laws could be responsible for the small size of Indian enterprises.
The study said that the Indian Trade Union Act was enacted in the colonial period during which our focus was on the industrial development was different from what is being propagated now.
“Most of our peers have modified the statutes to suit the changing conditions. India also needs to modify its regulations to match its requirements and with what peer group countries have done,” the study added.