As several states move to dilute their labour laws, ten central trade unions have come together to jointly condemn the move and have called the decisions an inhuman crime and brutality on working people.
Uttar Pradesh has suspended several labour-related legislations for three years and Madhya Pradesh has done it for 1,000 days. Effectively, in these states, companies will have greater flexibility in determining minimum wages, there will be far lesser checks on working conditions and a much-diluted guarantee of occupational safety.
While some of these changes have drawn condemnation, India's labour laws are indeed archaic and in need of an overhaul. Sample this: India has over 40 central labour laws and over 200 state laws. Do we really need some many laws or does this simply foster Inspector Raj?
The recent economic survey called for overhauling labour laws to unleash the potential of India's small businesses by dedicating a separate chapter to it. The survey makes the case that deregulated and flexible labour laws are the way forward to boost productivity and create jobs.
The author of this survey, chief economic adviser Krishnamurthy Subramanian told CNBC-TV18 that steps taken by Uttar Pradesh and Madhya Pradesh governments should be the way forward for reforming labour laws. He also added that restrictions posed by existing laws have stopped many companies from growing big, thereby creating a large informal sector.
So is this the right time to dilute labour laws and how can states undertake labour reforms to make it a win-win for both, the employer and the employee? To discuss this Shereen Bhan spoke to MS Unnikrishnan, CEO of Thermax Limited & Chairman - Industrial Relations CII National Committee; B Thiagarajan, MD of Blue Star, deputy chairman, CII Western Region; K Vaidya Nathan, ISB Alumni Endowment Research Fellow, Faculty Director at PGP Finance and Maitreesh Ghatak, professor of economics at London School of Economics.