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The Most Essential Thing for Labour Law Reforms in India: Political Will

May 18, 2020

Even before the prime minister emphasized the need for labour law reforms in India. BJP states already hinted at this strategy such as Uttar Pradesh, Gujarat, and Madhya Pradesh. As soon as the governments announced the reforms, the left front and opposition got furiously activated and started criticizing. It is evident that their opposition is simply out of dislike of the government, as there isn’t any merit in their accusation.

Labour Law Reforms in India

The ongoing migrant worker crisis is providing proof of how many of India’s labours are in the unregulated sector. Would the situation be different had the labour law reforms in india been implemented earlier? Winston Churchill had said ‘Never Waste a Good Crisis’. If we really want to live up to this expression, our political leaders need to support the labor law reforms. This crisis is an opportunity to modernize ourselves and be favorable to industries.

The existing Laws are Counterproductive

Despite having low-cost labor, the industry leaders find it difficult to establish a business in India. The sentiment is that the current laws are so labor centric that institutions find it difficult to fit in the maize. Our neighbor China went for labor law reforms in 1990 and created a perfect pair of a business-friendly environment and low-cost labor. Vietnam, on the other hand, is a chosen destination for industries moving out of China.

It is primarily due to the new labor policy that the country is adopting since 2021. The policy allows private businesses more flexibility in setting own pay scales. Less intervention from the state and more importance on dispute settlement by conciliation. Any formation of the trade union will require permission from the state administration.

Bangladesh, too, prevents labor strikes during the initial 3 years of operations for the businesses set up with foreign collaborations. On the other hand, India’s laws freely allow any strike or union of laborers. The pro-worker laws of India caused 600 textile mills to shut down in 2015 due to issues such as strikes, lock-outs, etc. The new labor law reforms in India would bring thousands of migrant workers into a regulated framework.

The Fear of Undermining Labor’s Rights

The political parties are opposing the new labor law reforms in India on the account of making the worker’s rights weaker. However, we have seen over the years how industries try to deviate from the regulatory framework. Also, the ordinances passed by BJP state governments did not compromise on the basic security of the laborers. Majority of the economists are welcoming the labor law reforms and swapping income for security actually works in the side of workers.

If there is no political consensus, it will invite many judicial and legislative challenges in the way of reforms. The government has shown the will for labor law reforms in India, now is the time for the opposition.

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Disclaimer: The views expressed are of those of the author and do not represent the views of

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