BASED ON
Hard truths about India’s labour reforms
Hard truths about India’s labour reforms: https://www.thehindu.com/opinion/lead/hard-truths-about-indias-labour-reforms/article65784627.ece
1.The country’s democratic Constitution created the world’s largest democracy. Sadly, 75 years later, political liberties and freedoms of speech are being curbed in India. 2.Social equality amongst castes has not been achieved. Lower caste citizens continue to live in great indignity. 3.Lower caste poor women live in abject poverty in India’s villages. They are among the most oppressed humans on the planet.
4.India’s gravest socio-economic problem is the difficulty a vast majority of citizens have in earning good livelihoods. Their problem is not just employment.
5.It is the poor quality of employment: insufficient and uncertain incomes, and poor working conditions, wherever they are employed — in factories, farms, service establishments, or homes.
THE ADOPTED STRATEGY
1.The dominant ‘theory-in-use’ to increase employment is to improve the ease of doing business, with the expectation that investments in businesses will improve citizens’ ease of earning good livelihoods. In this theory, large and formal enterprises create good jobs, and labour laws must be ‘flexible” to attract investments.
2.Reforms were begun by the United Progressive Alliance government. Their principal thrust was to improve administration by simplifying procedures and digitisation.
SCOPE OF LABOUR LAWS
1.Labour laws cover many subjects —
A.payment of wages,
B.safety conditions,
C.social security,
D.terms of employment, E.dispute resolution.
2.Labour laws are only one factor affecting business investment decisions. Investors do not go out to hire people just because it has become easy to fire them. An enterprise must have a growing market for its products, and many things must be put together to produce for the market — capital, machinery, materials, land, etc. not just labour. Therefore, it must be worthwhile to employ more people before firing them.
IMPACT:The V.V. Giri National Labour Institute’s interim report, “Impact Assessment Study of the Labour Reforms undertaken by the States”,
(2004-05 TO 2018-19)
1.The overall story is hardly better. The share of employment in plants employing more than 300 people increased from 51.1% to 55.3% between 2010-11 to 2014-15 (the period when the emphasis was on administrative reforms),
2.and then increased less, from 55.3% to 56.3%, in 2017-18, when some States made the bolder reforms favourable for employers.
3.Though overall employment is affected by many factors, the bolder reforms post 2014 were designed to promote larger factories.
4.Reforms of labour laws have had little effect on increasing employment in large enterprises. The report says that the effects of labour reforms cannot be revealed immediately: they will take time. Therefore, it is telling that Rajasthan, the first State to implement the reforms, seems to have benefited the least from them.
5.In fact, the report says, employment in formal enterprises is becoming more informal. Large investors can afford to use more capital and are also employing increasing numbers of people on short-term contracts, while perversely demanding more flexibility in laws.
WHO WERE BENIFITTED BY LABOUR REFORMS
The question the report leaves unanswered is whether the reforms have benefited workers. After all, the primary purpose of labour laws is to protect the rights of workers, not promote the interests of investors. Surely, the benefits of reforms should be assessed from workers’ perspectives too. It is sad that the report includes a long chapter on the views of employer associations about the benefits of the reforms, and nothing about the views of employees and unions. The employers’ associations say the reforms have been beneficial. The question is, beneficial for whom?
EMPLOYMENT GENERATION AND GDP GROWTH:Praveen Chakravarty, “Whose GDP is it anyway?” ( The Hindu, July 27, 2022),
1.between 1980 and 1990, every 1% of GDP growth generated roughly two lakh new jobs; 2.between 1990 to 2000, it decreased to one lakh jobs per per cent growth;
3.and from 2000 to 2010, it fell to half a lakh only.
more GDP does not automatically produce more incomes at the bottom. And the paradigm driving employment and labour policies must also change to enable the generation of better-quality livelihoods for Indian citizens, now and in the future.
FUTURE PLANNING
To achieve this, fundamental reform is required in the ways policies are made. If the benefit of reforms is supposed to be the improvement of ease of earning, better livelihoods for all citizens and with more dignity, whether they are farmers, factory workers, or service employees, should they not be listened to most of all, within their enterprises, and in the process of shaping policies?
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