Labour law reform is again on the top of policy debate. Policymakers like Bibek Debroy (member, NITI Aayog) have argued in favour of doing away with all rigid rules and clauses related to labour.
In Rajasthan, a bill has been passed to amend the Industrial Dispute Act to provide ease for retrenchment, layoffs and termination of workers. The Factories Act also stands amended to provide increased limit for overtime and decreasing its application to lesser number of firms and removing restriction on nightshift by women workers in factories. The Contract Labour Act amendment raises the applicability of the act to establishments having more workers than before. The Union Government has also approved the amendment of similar nature in the Factories Act 1948, Apprenticeship Act 1961, and Labour Law Act 1988.
According to the proponents of this new initiative, all these reforms are meant to bring more and more workers into the formal sector (organised). Though the new entrants may be informal contract workers. Debroy says, “It (labour market) has a labour aristocracy of unionised workers who are rightly paid and highly protected, along with an overwhelming mass of unorganised workers, many of whom are unable, in practice, to exercise even legal rights.” The high protection given to organised workers creates labour rigidities that discourage employment and encourage capital-intensive modes of production.
What it means is that the intention of labour reforms is just to reduce the labour cost for making the product more competitive in the national and international markets.
Along with easing the labour rigidities, the new government is introducing to relax the formalities of land acquisition, but it has been opposed vehemently by peasants. All political parties in Parliament have jumped onto the bandwagon.
The Modi government is clear about its developmental milestones. It thinks that Make in India will solve all the problems of our polity. The overflowing China, limping Europe, and slowly recovering global economy are making the situation conducive, it believes.
Can the set-shop approach, which China successfully implemented 35 years ago, salvage our economy and society? In the past three decades, things have changed fast. The youngsters of our country will not fit into the factory-mode mass production of Ford-ist nature because they are better educated and globally connected through the social media. The peasants too are not the same old illiterate lots, who could not understand the value addition of their assets due to industrial expansion.
The government should think in lieu of relaxing labour rules, it is making the rules more stringent in an old fashion. For Make in India to be successful, the government should capture the imagination of the young labour. The young boys and girls flocking the labour net must be treated decently.
Wage per hour, wide social security network by the government (for example, ESI, PF etc.), pickup and drop facilities, skilling the young through the existing labour, and incentive for better performance, security for women workers, and maternity benefits are a few new rules of the game. Our youth is ready to make this nation a better place to live in, but for them too.
The GDP growth is necessary, but not enough. Basic macroeconomic concepts remind you that Gross National Product is calculated by subtracting the profit earned by the so-called foreign investors from GDP.
India is far behind in the Human Development Index. Only through enriching the poor workers and peasants can we move up the index. Boost to industries should not be at the expense of our toiling masses.
John is member of Kerala State Planning Board