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Onus on States to Push Labour Reforms

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Lacking majority in RS, the Centre relies on states to bring in changes in labour laws

The onus of driving big-bang labour reforms, which could bring India's hiring norms in kilter with flexible global practices, rests with the states now as the Centre lacks the required Upper House majority to push such a bill, and isn't keen on an encore of the experience on the land acquisition law.

Furthermore, with the National Democratic Alliance (NDA) in power in a number of big states, the New Delhi believes it will be easier to drive legislative changes in labour laws at the state level to enhance the ease of doing business.

A senior government official told ET that the Centre is not immediately keen on bringing labour law amendments to Parliament. “Some work has been done on codifying labour laws and reducing 44 legislations into four codes. However, in terms of progress on legislative action, it is still an issue whether it will pass the muster in Rajya Sabha, because NDA by itself does not have the numbers, and, therefore, there is some hesitation,“ the official quoted above said. He was responding to a question on the delay in bringing the labour codes, which are ready, to Parliament for discussions.

The labour ministry is ready with the two labour codes, one on wages and the other on industrial relations, for several months now. The ruling NDA had attempted to steer changes in the United Progressive Alliance's (UPA) land acquisition law under pressure from states, but the lack of adequate numbers forced it to backtrack. Amendments are now under the consideration of a joint parliamentary committee.

The BJP-led NDA government, after coming into power in 2014, had brought in nine main amendments to the 2013 legislation through an ordinance, and subsequently as
part of a The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Second Amendment) Bill, 2015. However, due to stiff
opposition from various political parties, the government agreed to drop most of its contentious amendments to the Land Acquisition Act of 2013, bringing back the crucial clauses related to consent of affected families and social impact assessment (SIA).

The official said that the way forward for labour reforms in the country is through states.“We are now encouraging other states to take the Gujarat approach and at least bring in flexible labour laws in the special economic zones. Once the principle has been established through Gujarat's reforms, the Centre will give the permission. If we have three-four states doing this, competitive pressure will build on the others to act,“ he said.

The Economic Times New Delhi, 11th May 2017

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