What labour law reforms imply

Stress needed on skill development, employment generation and social security

rehman

MM Rehman | May 29, 2015


#International Labour Day   #labour day mm rehman   #narendra modi   #karl marx   #May day   #maruti trade union case   #cpm   #sitaram yechury  

Since the opening up of the Indian economy in 1991 an issue has been prominently raised by the government that huge investment is needed to boost economic growth. It is assumed that once economic growth takes place, employment and income of workers in the country will correspondingly increase, thereby reducing present unemployment.

However, there is a great impediment to investment to take place. Investors from home and abroad are waiting in the wings to invest their money for setting up industries. But they are afraid and uncertain, the government and others argue. The reason is the country’s plethora of labour laws which the government and the neoliberals view as the hindrance. They argue that the labour laws are to be amended, the investors/employers be given freedom to treat labour as ‘commodity’, then employment and investment will eventually increase leading to windfall economic growth. They argue that a liberal dose of labour law reform will act as a magic wand for investment in the country. First, the UPA government began to bring about reforms in labour laws, now the NDA government is bent upon amending labour laws further.

Before going into the implications of labour law reforms on workers, let’s take a look at the existing conditions of workers, which will help us understand the further slide in their condition after the reforms agenda rolls on.

According to the 68th round (2011–12) of National Sample Survey (NSS), the total number of labour force in the country is 483.75 million. One-sixth of the world’s labour force is in India. The labour force is growing 10 million a year, adding 20-22% to the world’s labour force. But of this total, 472.91 million are employed, leaving 10.34 million or 2.2% of the total workforce unemployed. Almost half of the workforce is in agriculture, forestry and fishing (48.9%) while the rest is in industry (23.3%) and service (26.2%). Also, more than 92% are informal or unorganised workers. They are informal because they are unprotected by labour laws. Their working conditions are unregulated. The provision of labour laws for basic amenities, like paid holiday, medical benefits, accident compensation, safety, security, etc., are conspicuous by their absence in workplaces of unorganised workers and for contractual labourers even in the organised sector. And India is yet to ratify the social security convention (No. 102), which the International Labour Organisation (ILO) adopted in 1952.

More than half of the workers are self-employed while more than 30% are casual/wage employed. Around 15% are into regular employment. Over the years the proportion of self-employment is continuously declining while casual employment is correspondingly increasing but the regular employment situation remains stagnant. Every worker is supposed to be paid minimum wage. But on the contrary, 52% workers in rural areas and 30% in urban areas are still not paid minimum wages. These are the results of the increasing informality of employment. So far, there is no policy and programmes in place to stop this sliding situation in the labour market.

In the recent past, the influence of workers’ organisation has gradually declined, leading to erosion of workers’ rights. Trade unions are not consulted on any labour-related issues by the government and labour organisations are not in the best of their health.

If one examines the skill levels of workers, the situation appears to be bleak. Only 10% of the labour force in the age group of 15-49 is vocationally trained. Of this 10%, 33% are in the service sector, 31% in the manufacturing sector, 27% in the non-manufacturing sector and the rest 9% are in allied activities. Apart from this, one-third of India’s labour force is still illiterate and poor.

The national commission on labour and the national commission on enterprises in the unorganised sector have been highlighting the issue of vulnerability of labour force and suggesting remedial measures.

Against this backdrop, the government has amended several laws and weakened the inspection system of the labour department, hoping that so-called self-regulation will make employers comply with the legislative provisions for safety, amenities, etc., which are workers’ rights. There are more than six lakh large, medium and small manufacturing units in the country. Time will tell to what extent they will comply with the laws. The ‘Shram Suvidha’ portal has been introduced to regulate inspection of factories. Its efficacy and impact is yet to be assessed.

Prime minister Narendra Modi has initiated the ‘Make in India’ campaign for job creation and economic development. The major intention is to increase the share of manufacturing in GDP from present 15% to 25%, and the government hopes to create decent jobs for the employment seeking population of the country. This could be achieved if three things are put in place. They are: (i) education and skill development, (ii) employment generation, not only in manufacturing but also in other sectors and (iii) provision of social security to the vulnerable workforce of the country.

1. Education and skill development

Earlier, the national commission on labour 2002 observed that only 5% of the Indian labour in the 20-24 years age category, has obtained vocational training. The corresponding figure in other industrialised nations is much higher, ranging between 60% and 80%, except for Italy, with 44%. The corresponding percentage for Korea is very high at 96%. Even among developing nations, Mexico is far ahead at 28%, Botswana is at 22% and Peru at 17%. The only saving grace is the quality of the skilled labour being ranked best amongst the 10 newly industrialised countries.

India cannot sit quietly, as  globalisation leads to dramatic changes in work processes and organisation and infusion of new technology demands skilled labour force.

2. Employment generation

The most crucial aspect of security is employment security, which lies in the availability of jobs in different sectors. Along with manufacturing, agriculture, agro-processing sectors, burgeoning construction industry, travel and tourism sector, education and information technology sectors, community services, etc., will have to be given due importance. Planned interventions in these sectors will create huge  employment opportunities.

3. Social security

As we have noted, vulnerability of an overwhelming number of people in the country is a disturbing fact. Job security, employment, healthcare, education, accident benefit, pension, proper social security during any contingency, have to be provided to workers. This will help increase production and productivity of workers. At present, a little over 1% of GDP has been allocated to social security. This has to be substantially enhanced.

Today, the government can play a catalytic role in creating a win-win situation between the employers-employees and the government.
I reiterate here the Philadelphia Declaration, 1944:

  • Labour is not a commodity;
  • Freedom of expression and of association are essential to sustain progress;
  • Poverty anywhere constitutes a danger to prosperity everywhere.


(The column appears in the May 1-15, 2015 issue)

Comments

 

Other News

A great literary feast (that could’ve been even more sumptuous)

A Case of Indian Marvels: Dazzling Stories from the Country’s Finest Writers Edited by David Davidar Aleph, 390 pages, Rs 999 Change is the only constant, and India has always been doing so. Yet, after independence, if there was a year when the p

Govt e-Marketplace sellers report more business

“My volume of business has increased ever since I registered on GeM (Government e-Marketplace) in 2017. Earlier, I could supply items only in the vicinity of my shop in Fort area and only within Mumbai. Now, I ship my products all over the country! I have tied up with India Post and three private cou

How the Hindi Newspaper Business Changed

The Journey of Hindi Language Journalism in India: From Raj to Swaraj and Beyond By Mrinal Pande Orient BlackSwan, 188 pages, Rs 1,195.00 In India, the English-language media is considered the ‘national media’, while the language press

More reforms in telecom sector in offing: Ashwini Vaishnaw

The telecom sector in the country will witness more reforms in the coming years, minister for communications, electronics & IT and railways Ashwini Vaishnaw has said. He also asserted that the industry too will have to do its bit and reciprocate by improving quality of service significantly.

Left-wing extremism: challenges and response

Left-wing extremism is in existence right from India’s independence, but it became prominent in 1967 under the name of Naxalism. The nomenclature of this movement has changed from time to time and place to place depending upon the leadership. Before 2014 more than 15 states were facing this problem w

Agri Min organises events ahead of International Year of Millets 2023

A series of pre-launch events and initiatives have been organised by the Department of Agriculture and Farmers Welfare on the MyGov platform in the run-up to the International Year of Millets 2023 to create awareness and a sense of participation in the country  around the ancient and forgotten golden

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter