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Labour Reforms Put on Hold Ahead of State Polls

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BJP govt doesn't want labourers to see it as pro-corporate

Big-bang labour reforms proposed by consolidating 44 central laws into four codes may not be implemented any time soon on account of upcoming state elections in Uttar Pradesh and Punjab, setting back the government's push to improve the ease of doing business in India.

The government does not want to move ahead with any change that would lead to charges of pro-corporate policy-making.The shift in strategy comes even after Prime Minister Narendra Modi mentioned his government's intent to come up with the labour codes in his Independence Day speech last year. Barely 10% of India's total work population, estimated at 480 million, is in the organised sector and a huge part of migrant workers are from states including UttarPradesh and Bihar

While the labour ministry has finalised the codes on wages and industrial relations and work is in advanced stages on the codes on social security & welfare and on safety & working conditions, the government is in a wait-and-watch mode with regard to this transformational change to labour laws, a senior government official told ET.

“Instead, we are now going ahead with small changes in archaic legislations and may bring about the codes as and when the time is appropriate,“ the official said on condition of anonymity.

According to the official, state assembly elections due next year are crucial for the Bharatiya Janata Party-led National Democratic Alliance government and it would not want to do anything to jeopardise its chances of victory. “Labour being a crucial subject, government does not want to take a chance,“ the official added.

The term of the legislative assembly in Punjab and three other states ends in March, while in Uttar Pradesh, it ends in May. Of the five states that went to the polls this year, the BJP won only in Assam.

The proposed codes will be an amalgamation of existing similar labour laws so as to simplify procedures of operation for employers. Since February, the government has fa ced criticism for some crucial decisions related to the Employees' Provident Fund Organisation, following which the measures were withdrawn.

Trade unions are also up in arms against the government's decision to increase the investment of EPFO in equity as well as the utilisation of unclaimed provident fund money for the creation of a senior citizen welfare fund. 

The Economic Times, New Delhi, 02 August 2016

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