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A high economy needs an efficient workforce

Amita Dokhale

A passionate reader ! A newbie in Marketing Management at IMT Ghaziabad. I love to play Table Tennis.

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  1. Indian Labour laws are curious mix of improbably stringent laws, lack of implementation,promotes weak governance,affects investments,hurts employee/employer sentiments & hamper economic growth.
    Few points which can be cited to support the argument are –
    1.Overlapping jurisdiction leads to too many laws
    Labour laws are part of concurrent list both state & center have juridisctions.Both are eligible to enforce and make laws.Itr leads to too many redundant laws.
    2.Multiple confusion
    Multiple laws governing a single area.The bulk of labour force are employeed in wrong section where reforms are not there or inadequate.
    3.Industrial Dispute Act
    Workers & trade unions can intervene in decisions of employer & government.Things could get into litigation for years.With new government emphasizing & enhancing export capabilities, companies would need relaxation here.Rigidity is a primary reason why manufacturing fails in India.
    4.Contract Labour Act
    Act prohibits use of contract labour for core functions.Its main purpose was to ensure interest of permanent employees.Lately companies hire a lot of contract labours provides flexibility & pays less.Majority of workforce is contractual, so purpose of the act is defeated.
    5.Trade Union Act
    Legislation gives legal rights to trade union, immunity from certain civil suits & criminal prosecutions.Trade unions can serve the purpose if they can bargain collectively.However one large organisation may have many trade union backed by different political parties.It needs minimum 7 workers to form trade union.
    6.Market Regulations
    Manufacturing sector accounts 13-14 % GDP in India.Tight labour market regulations have dissuaded foreign firms from investing a large manufacturing base in India.
    Country needs to generate many more quality jobs to meet aspiration of growing & impatient workforce.Growth can happen with minimal labour regime with flexibility of employer is combined with better governance & more generous exit package along with social insurance for employers & employee.

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