Labor reforms: Narendra Modi govt plucks some key low-hanging fruit

Written by ENS Economic Bureau | New Delhi | Updated: Oct 17 2014, 21:50pm hrs
Narendra ModiPrime Minister Narendra Modi speaks at the launch of Pandit Deendayal Upadhyay Shramev Jayate scheme in New Delhi. (PTI)
Stressing that labour reforms hold the key to the success of the 'Make in India' campaign, Prime Minister Narendra Modi on Thursday announced significant changes, including measures to end 'Inspector Raj' with a system that is expected to sharply curb the element of discretion with labour inspectors and a single window compliance process for companies on labour-related issues.

As a step in this direction, all 1,800 labour inspectors will be disallowed from swooping down on companies and instead, a computerised system will randomly send them on inspections, based on data trends and objective criteria. Following inspections, they will have to upload their reports within 72 hours and cannot modify them thereafter.

Lets start with trust, said Modi, while inaugurating the Pandit Deen Dayal Upadhyay Shramev Jayete event organised by the Labour Ministry here on Thursday. Ease of business is the first and foremost requirement if Make In India has to be made successful, he said.

Central labour inspectors have already been sent text messages on behalf of the Prime Minister to sensitise them to the reforms, and the ministry is hopeful that the annual inspections currently about 3 lakh will come down sharply.

Modi also unveiled nearly half-a-dozen schemes, including a Shram Suvidha Portal where employers can submit a single compliance report for 16 labour laws, a new web-based labour inspection system, unique account numbers for members of the EPFO, a revamped Rashtriya Swasthya Bima Yojana as well as a new skill development and apprenticeship scheme.

Sharply streamlining the cumbersome compliance process, manufacturers can now register online at the Shram Suvidha portal and file a self-certified single compliance report for 16 Central labour laws. In return, labour inspections by four central agencies EPFO, Employees State Insurance Corporation, Central Labour Commissioner and Director General of Mines Safety will be based on a computerised list of units that are picked up from this database.

Noting that it is the governments responsibility to simplify trade, he said the new schemes put the onus of compliance with the citizens who are expected to self certify their reports and also curb the arbitrariness of labour inspections. These facilities are what I call minimum government, maximum governance, he said.

Asserting that Shramev Jayate is essential to boost economic development, Modi said it is important to bring back dignity of labour and respect those who choose to undertake vocational training or work as apprentices.

In our country, only white collar jobs are considered good... We have to change our perceptions and give respect to labour, he stressed, adding that the revamped apprenticeship scheme and Industrial Training Institutes have a total of 34 lakh seats for students.

These initiatives, he said, would also pave the way for skilling of youth, and even create an opportunity for India to meet the global requirement of skilled labour workforce in the years ahead. To showcase the success of skilling programmes, the Prime Minister and the Labour Ministry also felicitated former students from these institutes.

Significantly, in a bid to clarify the NDAs labour-friendly image, the Prime Minister also said that labour issues must be looked at from the perspective of the labour, not industrialists. Such a compassionate approach would result in the shram yogi (labourer) becoming a rashtra yogi and a rashtra nirmaata (nation-builder), he said. His comments are significant given that the NDA government has received flak from trade unions for its recent reform measures including amendments to the Factories Act and the Apprentices Act.

However, trade unions remained sceptical of the governments stance. The announcement of the new schemes is most welcome but we have to wait and watch for the actual implementation, said B N Rai, president, Bharatiya Mazdoor Sangh.

The Left parties were more critical. It is only cheating of workers as, while the government is launching these schemes, simultaneously it is changing the labour laws to push out the labour from their purview said Tapan Sen, Rajya Sabha member and general secretary, CITU, adding that there is nothing new about efforts such as the UAN that have been going one for the last six years.