Government bid to make labour laws investor-friendly

NEW DELHI: In tune with BJP's election manifesto, the Union labour ministry made its first move to reform labour laws for a "conducive environment for investors" through flexible mechanisms like hiring and firing. On its website, the ministry invited comments or suggestions on proposed amendments to the Factories Act, 1948.

Amendments to the Factories Act are pending since 2008. Earlier, the cabinet of Rajasthan's BJP government cleared crucial amendments to Industrial Disputes Act, Contract Labour Act and the Factories Act. The move elicited stiff opposition from central trade unions.

The labour ministry's invitation for suggestions on its website, too, did not go down well with central trade unions.

"I don't know what amendments they are talking about," said Baijnath Rai of the BMS, affiliated to the RSS.

While BJP's election manifesto was being drafted, BMS leaders had conveyed their opposition to labour reforms. BJP's poll manifesto promised review of "outdated, complicated and even contradictory" labour laws.

Trade union leaders criticized linking labour law reforms with creating Investment friendly environment. "It is idiotic. Employment generating investment is not dependent on labour laws," said CITU leader Tapan Sen.

Veteran AITUC leader Gurudas Dasgupta said, "We will not send any suggestions. The Factories Act does not need to be amended immediately. This is an attempt to liberalise the Act."

CITU, too, won't send its suggestions to the labour ministry. "The trade unions are stakeholders. So, the ministry must write to all stakeholders, including employers and trade unions," said Sen.

Only about 8% of the country's work force — in the organized sector — is covered by labour laws. India has the largest number of workers — 93.7% — in the unorganized sector.

"Has that brought investment? Since 2008, private corporate investment has been consistently going down to 28% of total domestic investment by end 2012. It is public sector that is making the bulk of the investment," said Sen.

Ministry officials said the aim is to strike a balance between promoting growth and employment friendly environment and safeguarding rights of workers.