Prime minister Narendra Modi has unveiled his plans to reform labour laws while launching the Pandit Deendayal Upadhyay Shramev Jayate Karayakram (Labour Inspection Scheme) on Thursday. It is a bold attempt from which his predecessors had been shying away for reasons which are too apparent to need recapitulation. The new scheme will, hopefully, end the Inspector Raj by taking away from the inspectors much of the discretion that they enjoyed. Inspections will be carried out by inspectors, chosen through a transparent system, who will have to upload their reports within 72 hours of the inspection. Once uploaded, they cannot make any changes in their reports, which can be publicly accessed.
Modi seeks to make good use of information technology to redeem his promise of “minimum government, maximum governance”. He has reached out to millions of subscribers of the employees provident fund scheme and 1800 labour inspectors and thousands of factory owners by way of SMS through the labour ministry portal. He has also promised employees ease of transfer of their EPF accounts when they shift their jobs or places of residence. He knows labour reforms are key to the success of his ambitious “Make in India” campaign—essentially aimed at boosting the manufacturing sector, the least growing of all. This is all the more reason that he should start implementing the reforms, while the iron is still hot.
The Modi government will have to win the confidence of the state governments, especially those ruled by non-BJP parties. For, states play a greater role in industrialisation as factories are built in their areas of jurisdiction. Every state has to enact laws to facilitate easier investment. Modi will also have to win the confidence of trade unions, particularly those led by the Bharatiya Mazdoor Sangh, which is the largest and has been opposing some of the planned reforms. The taste of the pudding is in the eating. The success of his labour reforms depends on how quickly he rallies the states and the unions behind him.