New Delhi: In a bid to revive economic activity in the country, various states have eased labour laws. The intention, they claim, is to attract more investment and jump-start the cycle of demand.
The move has triggered a debate among experts about the archaic nature of labour laws and whether they are responsible for the dismal state that India's unorganised sector is currently in.
In a series of tweets, Shruti Raajagopalan, senior fellow at Mercatus stated that why the country labour codes are self-destructive and have resulted in more harm than protection for the sector.
“Those who are lamenting the loss of labour protection because UP and MP suspended labour regulation need to understand that 90% of India's labour for never had that protection in the first place. The restrictions either prevented hiring, or created "contractor/dalal system," she wrote in one of her tweets.
"It only served unionized labour, a small fraction of Indians in the formal sector, labour inspectors, middlemen, and champagne socialists. The cost of keeping this small contingent in business has left 90% in the informal sector, totally unregulated, and with no protection," added Rajagopalan.
On Thursday, Madhya Pradesh Chief Minister Shivraj Singh Chouhan had announced the abolition of the requirement to fill 61 registers and 13 returns, stating that only one register and the return will be sufficient to obtain licence.
He also allowed overtime of up to 72 hours and the period of working shifts in factories to increase from eight hours to 12 hours.
Following suit, the Yogi Adityanath-led government in Uttar Pradesh did away with labour laws (except three laws and one provision) for the next three years to provide a cushion to sagging businesses and factories in the state.
Now, industrial units will also not have to worry about inspection or enforcement officials knocking on their doors as they would not be probing if labour laws have been implemented.
Similarly in Rajasthan, the government of Ashok Gehlot has amended Industrial Disputes Act to increase the threshold for lay-offs and retrenchment to 300 from 100 earlier. Besides, it has allowed raising of working hours from eight to 12 hours per day.
Punjab, Himachal Pradesh and Gujarat have also amended their Factories Acts in the last month to increase the work time to 12 hours every day and 72 hours every week, compared to eight hours every day and 48 hours every week.
Meanwhile, Raajagopalan’s arguments were countered by one Advocate Manoj, who provides guidance to entrepreneurs.
“The decisions of Indian entrepreneurs are seldom influenced by labour laws. (Been there done that and continue to aid and advise entrepreneurs)… In fact, labour laws constitute the least considered factor while setting up an industry," he wrote on Twitter.
"Dire need of amendments in some sections of labour laws is being used to justify the abominable erosion of Constitutional rights... Again, besides labour laws, there are 1,000 other factors that have prevented industries from flourishing. To burden labour laws with all the ills, is a stretch," he further said.