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New Factories Law May Exclude Packaging From Manufacturing

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Experts & trade unions concerned over move, seek safety of employees
The government's Make-In-India initiative involves a brand new definition for manufacturing activity which seeks to divorce all packaging processes from the conventional understanding of industrial production.
This approach to what constitutes a `manufacturing process' is a pivotal part of a new legislation being readied by the government to replace the 1948 factories law and the Factories Bill of 2014 that has already been vetted by a parliamentary panel.
Citing the example of milk, the labour ministry has argued that packing it into `different volumes or weight' does not change the character of milk and shall therefore not be construed as manufacturing under the proposed new law.
`Any process or activity resulting in any alteration of original character, such as nature, state, shape, size, usefulness and or making value addition to the original material acted upon when subjected to the process or activity' is manufacturing under the new Factories Bill being discussed with stakeholders.
While the ministry is expected to hold tripartite discussions with employees and the industry on the proposed changes to the law soon, experts questioned the rationale behind taking packaging out of the purview of manufacturing.
Former Planning Commission member Arun Maira, who had spent decades in the Tata group's manufacturing businesses, said it is important to have a broader view of manufacturing where India needs to create more jobs for the youth. “The conversion of some inputs into something else of value and the activity in between is manufacturing. Milk packed into a laminated card-paper pack, is a different product from loose milk and has greater utility as it can be stored longer and carried farther,“ Maira pointed out.
“Perhaps the government wants to make it easier for firms to make in India by exempting some activities from regulatory requirements. But the factories law is basically concerned with safety and if you are getting employees to stitch together garments or packagere-package goods and materials, they should be safe too,“ he said.
AK Padmanabhan, president of the Centre for Indian Trade Unions (CITU), told ET that he had asked the labour ministry about the purpose of this new definition for manufacturing during a recent discussion about the new Factories Bill, but he got no response.
“No trade union can deny that the factories law needs be reviewed as they are outdated and manufacturing processes and safety needs have changed. But some of the changes being proposed would lead to many factories coming out of the law's ambit,“ he said.
Conduct Real Reforms
Packaging milk involves industrial processes, and so can be construed to be a manufactured food item. The larger issue is to genuinely reform and amend such laws as the Factories Act. Reportedly, `inspectors' in the Act would be replaced by `facilitators', who would issue `improvement notices' to factories to seek compliance. But in the process, the letter and spirit of the law may well be subverted, leading to routine rent-seeking and hassles. Instead, we need to improve the ease of doing business and proactively safeguard workers' interests.
The Economic Times, New Delhi, 4th Nov. 2015 

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