Jul 1, 2014

Is India on cusp of a major labour-law reform?

Is India on cusp of a major labour-law reform?

Millions of employees in the UK can now request for more flexible working hours , including the option to work from home, after the country’s employment-relations ministry passed a law mandating employers to consider such requests. 

The move is aimed at boosting productivity in a work culture, the country’s employment minister Jo Swinson said, where the focus is no longer on “presenteeism” or putting in long hours physically at the workplace but rather on “getting the work done”. 

While such laws are far from being a reality in India, this country could soon also be on the cusp of a major work-related reform, a move that could potentially boost manufacturing, create millions of jobs and boost economic growth. 

The Narendra Modi-led government is working on a major rehaul to be brought about in current labour laws, which, according to experts, put a brake on industrial growth, limit expansion of companies and stifle employment opportunities. 

The Bhartiya Janata Party government is looking to introduce laws that will benefit workers -- such as making more workers eligible for minimum wages, increasing overtime hours and allowing women to work in night shift in factories -- and will follow it up with other arguably more unpopular rules such as allowing for contract hiring, a Reuters report has claimed. 

"We are trying to provide a hassle-free environment that helps both workers and the industry," a senior official with the labour ministry, which recently put out an article seeking public comments on some of the above-mentioned proposals, told Reuters .

The official said tweaking labour laws is a priority with the new government.

A series of reports, from policymakers, think-tanks and global researchers have pointed to India’s labour laws, some of which date back to Independence, as the reason behind the slow growth in its manufacturing sector. 

The world’s third-largest economy depends majorly on the services sector (56 percent of gross domestic product) – a sector that relies more on technology and capital than it does on labour – rather than manufacturing, which contributes only 15 percent to the country’s GDP.

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