Maharashtra played an important role in pushing India’s ranking up 30 places on the Ease of Doing Business Index 2018, and if the proposed labour laws are passed, it is going to strengthen India’s position even further. According to a report published by The Times of India, Maharashtra has proposed labour reforms that allow shutting down of factories with less than 300 workers without government’s permission.
The proposed law, according to state labour secretary Rajesh Kumar as quoted by the TOI, will promote ease of doing business even as it will provide increased compensation to workers. The proposed labour reforms on shutting down of factories go beyond several states including Rajasthan and Haryana. The current Industrial Disputes Act, 1947 allows factories with less than 100 workers to shut down without government’s permission.
However, the labour reforms also propose to allow factories with more than 300 employees to shut down without government’s permission, only if it gives 60 days notice and 60 days compensation to workers for each year of continuous service. If state’s permission is sought, the factories need to give only 30 days compensation. For factories less than 300 workers, it needs to give 45 days compensation to workers for each year of continuous service. The proposal gives an option of shutting down to all 37,234 factories in the state, the report said.
India made it to the coveted list of the top 100 countries in the World Bank’s Ease of Doing Business ranking for the first time ever, led by improvements in as many as eight fronts out of a total 10 on which the countries are assessed, significantly under ‘paying taxes’ (from 172 to 119), ‘resolving insolvency’ (from 136 to 103) and ‘protecting minority investors’ (from 13 to 4).
India ranked 100th for the first time, leapfrogging 30 places from the last year’s 130, firmly aided by the implementation of reforms in crucial areas such as starting a business, paying taxes and resolving bankruptcy in New Delhi and Mumbai. However, the World Bank also said that India still lagged on many fronts and needed to improve.