LUCKNOW: In order to attract more investment to firm the economy in the ongoing recessive phase due to COVID -19 triggered lockdown, Yogi Adityanath government accorded approval to an ordinance suspending a majority of labour laws in the state for next three years. The state government has been tapping many options to support the economy in the post-lockdown period.
The ordinance -- Uttar Pradesh Temporary Exemption from Labour Laws Ordinance -- was put before the state cabinet in its recent meeting and it was passed on Wednesday. The step is expected to help both existing and new industrial units, said government sources.
The recommendations on the labour laws were presented by a group of state ministers comprising labour minister Swami Prasad Maurya and MSME minister Sidharth Nath Singh. With the approval to the ordinance, more than 30 clause of labour laws would now stand suspended in the state.
The CM had recently indicated an amendment in the labour laws to draw new investment to the state especially from China in the post-lockdown phase to support the depleting economy. In fact, the picture of revenue generation is a major cause of concern for the state authorities as the first month of the current financial year has accrued major losses leaving the state coffers literally empty.
According to state finance minister Suresh Khanna, total tax demand for April 2020 was pegged at Rs 12141 crore but only Rs 1178 crore could be fetched.
“The economic activities in the states have been severely affected and slowed down due to the outbreak of Covid-19. This is because businesses and economic activities came to a screeching halt due to the national lockdown,” said a government spokesperson.
As per the labour department sources, around 40 kinds of labour laws are enforced in UP, some of which are now redundant in the new ordinance while about seven to eight of them are being retained.
These include the Bonded Labour Act of 1976, Employee Compensation Act of 1923 and Building and Other Construction Workers’ Act of 1996. Laws pertaining to women and children, like Maternity Act, Equal Remuneration Act, Child Labour Act and Section 5 of the Payment of Wages Act which provides that wages of a person earning less than Rs 15,000 a month cannot be deducted, are also being retained.
The laws related to settling industrial disputes, health and working conditions of workers and trade unions, contract workers and migrant workers will remain suspended for three years.
After this ordinance, owners of factories would hold more powers to hire and fire without attracting punitive measures from the labour department up to a certain limit. In another departure from the past, the enforcement wing would not raid the premises of factories on minor issues.
According to state labour minister Swami Prasad Maurya, suspension of the laws would help in setting up of new industries and ease problems of existing ones at a time when the Covid-19 lockdown had dealt a severe blow to the economy. He said that the laws would apply to both existing businesses and new industries.
However, it was ensured that the labourers did not suffer but there would not be any additional burden on the industrialist now, added the minister.
Since labour is a concurrent subject, states can frame their own laws but will need the approval of the Centre to enforce them. Therefore, the ordinance will also be sent to the Central government for approval.