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Govt Rethinks Aggressive Labour Reforms Push

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An interministerial group on labour headed by finance minister Arun Jaitley is expected to meet soon to take a call on how aggressively the government should pursue its agenda of reforms.
This comes after attempts to build consensus on big-ticket legis lative changes in labour laws failed because of stiff opposition from the trade unions and the government not enjoying sufficient strength in the Rajya Sabja.
“The government will soon hold discussions at very senior le vel in which a decision is likely to be taken as to what extent it should push labour reforms,“ a senior official told ET, requesting not to be identified.
The Narendra Modi-led NDA government had last year set up an interministerial group on labour, comprising power minister Piyush Goyal, petroleum minister Dharmendra Pradhan and minister of state in Prime Minister's Office Jitendra Singh to deliberate on all labour law changes with trade unions.
However, the group could not manage to take unions completely on board despite a series of consultations with stakeholders, as a result of which not many amendments to labour laws proposed by the government have seen the light of day.
There are at least half a dozen such amendments pending with the law ministry and a few with the Cabinet for approval. Since the government is not very sure of the repercussions of these on the workers it wants to take stock and consider afresh as to how to proceed further, officials said.
The Child Labour (Prohibition and Regulation) Amendment Bill is pending in Parliament while half a dozen bills including the Employees' Provident Fund and Miscellaneous (Amendment) Bill, the Small Factories Bill, the labour code on wages and the labour code on industrial relations are either pending with the law ministry or the Cabinet. The official cited earlier said that the key task at hand for the interministerial group is also to reinstate government's pro-labour image which has been hit after a series of controversial proposals related to the Employees' Provident Fund Organisation in the past two months.
These include the proposal in this year's budget of imposing a tax on withdrawal of provident fund, lower interest rate of 8.7% on provident fund than the 8.8% recommended by the board of trustees and stringent withdrawal norms.
While all of these were withdrawn after pressure from all stakeholders, it has left the government in a hitch over its labour strategy going forward.
“The interministerial group will rework its strategy on labour laws and tweak it in such a manner that it maximises benefits for both workers and employers,“ the official said.
The Economic Times New Delhi,18th May 2016

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