Not labour’s love alone

Context: For close to three decades, wanting economic reform (i.e. greater market-orientation) have called for changes in India’s multiple, archaic, rigid and procedure-bound labour laws.

Benefits of the labour reforms

• Simplification of laws by merger:  Forty-nine central laws have been crunched into four “codes”(on wages, on working conditions, on social security and on industrial relations).

• Greater freedom to businesses: Hiring and firing have become easy and lock-outs are more difficult now.

• Those companies employing fewer than 300 workers don’t even have to issue standing orders, which specify conduct norms for workmen.

• Provisions to de-criminalise many actions and allow compounding fines to be paid instead.

• More freedom to government: They can exempt industries from the coverage of the codes, and to define the limits within which they will operate.

• Expands the scope to fixed-term employees, contract labour, gig workers, migrant labour and “platform” workers 

• It can enhance large scale factory employment: that turns out wage goods like shoes and clothes, electronic goods, to be followed by backward integration into components, for the domestic and export markets. 

• Benefits from Chinese exit: It helps to profit when China is exiting some of these activities, or when companies are exiting China for wage-cost and other reasons.

Way Forward: Coterminous changes along with are required

• To reduce the cost of factory land, transport, and electricity for industrial consumers ,