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India’s Ancient Labour Laws Need To Go, Fast

by V. B Routray
Published: Last Updated on 68 views

The retrograde amnesia sweeping Indian political classes every time questions are raised on the systemic apathy towards workers is harrowing and disturbing. More than seven decades of being an independent nation and we are yet to shirk off our Union Jack-tainted robes or the colonial doctrines for our economy. Our labour unions, which were earlier held hostage to political gains, now pander to powerful lobbies for influence and power, further boxing the workers into a corner.

The coronavirus pandemic is a rude wake-up call for governments that believed they had a ‘model healthcare’ system or a ‘robust’ social security for the needy, especially the migrant workers. The injustice meted out to millions of migrants amidst the nationwide lockdown should put us all to shame, and conscience should dictate that this was not the best response to a public health emergency.

How did we get here?

Only SRK takes his image of ‘king of romance’ as seriously as India takes its label of ‘socialist’. We know what happened to him and we have front row tickets to what is happening to India. Under the garb of socialism, successive governments after the British Raj introduced ‘Raid Raj’, ‘License Raj’ and ‘Regulation Raj’, gradually tightening their rent-seeking nooses around India Inc.

Owing to them, we first missed the industrialisation bus of 80’s and then the exporter’s ship in 00s. The only silver lining were a slew of reforms by PV-MMS in 1991, which rescued the Indian economy from a complete collapse and opened the portal of globalisation, introducing global conglomerates to the better part of India. The 7-plus percentage of GDP growth which they achieved also resulted in a 2-3% growth in employment, in comparison to which Narendra Modi’s NDA governments have merely offered lip service. A major reasoning behind this steep downfall in employment despite growth in GDP is the broad distinction between skills and jobs and the lack of avenues of employment, i.e. industries.

Indian businesses have not only suffered morose bureaucrats but also their exploitative regulations which would ensure most such businesses are run aground if the holy book is followed. For instance, the Factories Act of 1948 makes it a punishable offence not to have spittoons and washing and drying lines in a factory with a minimum of ten workers and which runs on electricity. Under the dinosaur of a legislation, no factory may make their workers work more than eight hours a day or overtime more than 7 days at a stretch or employ women for night shifts. Singapore averages 2300+ hours per capita per labour while Taiwan averages 2100+ and Japan 1700+. It can be safely assumed that these nations, who outpaced us long ago in terms of growth, have a fair idea about what they are doing. Also, on treatment of workers, no mass exodus of labour has been observed from these countries to neighbouring nations, suggesting a healthy labour regime as opposed to an exploitative one.

Migration is because of India’s labour regime

The regulation regime, NGOs, political lobbies and even religious sects, in no particular order, have contributed to pulling the socks down on India’s growth story. Consider the cases of POSCO, Arcelor-Mittal and Vedanta Aluminium in Odisha or Sterlite in Tamil Nadu – India’s political elite and the wannabe-elites have built blockade over blockade to ensure the poor remain poor, the uneducated remain uneducated, and then migrate and become somebody else’s problems. For example, Odisha’s poorest districts are the same three districts that turned away the above industries and now contribute to the highest number of migrant workers from the State.

India’s poor are not migrating because they are poor. They migrate because we have forced it upon them and taken away any opportunity to find employment.

They have not resigned themselves to a fate that holds no promises; it is the lack of proactive governance that has taken away their right to dream for a future with dignity. 

Indian administrations have systematically oppressed workers and the industries, allowing just a select few to ‘live long and prosper’ through rigged tenders, unsavoury favours, insider information and by turning a blind eye to violations.

It would have been very dignified of the current dispensation to assure workers jobs before hurtling them from one state to another, shutting down livelihoods at will and that too with a carrot called MGNREGA which does not even serve well the people it already covers.

Hope in a post-Covid India

When the lockdown is lifted, we may not be in the same world or inside a society we were before. Migrant workers who came seeking refuge of their motherland will make their way back to the states they once worked in, putting in place a thermonuclear reaction of reverse-reverse-migration. While some States have started mapping the skill of their returnees to employ them in the State, some have turned to businesses for setting down roots in their States.

Businesses hit by the lockdown have sought the olive branch from their governments to reboot their industries with relaxed regulations and as of today, three states have listened in. The only hurdles that remain are those who believe they know what is best for the workers. The same lot that helped governments control the fate of the workers at the behest of the powerful and mighty.

But the time has arrived for the Union government to place interests of an average Indian worker above everything else and comprehend that the first step for it is to have more industries, not more regulations.

For this to happen, the labour regime needs to be packed and sent back to the pre-historic era it came from. The 44 Central Laws and 200+ State laws governing labour need to be brought under a single code to improve compliance, and most of them are in dire need of dissolution if MSMEs have to grow without being held hostage by officials and labour unions. Second, we must revisit how compensations are offered against services, improve financial inclusion, make payments digital and introduce third-party verification of compliances.

Governments instead of getting into a fistfight with labour unions, need to bring them to the table and set transparent terms on protecting the social security of these workers even when factories are not operating. Actual ‘ease of doing business’ is to simplify laws so that all can follow them, not cut corners. If we want to be the world’s most vibrant economy, we might as well behave like one.

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