Narendra Modi vows to end 'inspector raj', will allow technology to dictate course of labour reforms

Written by Subhash Narayan | New Delhi | Updated: Oct 17 2014, 16:38pm hrs
Narendra modi reformsPM Narendra Modi launches the Pandit Deendayal Upadhyay Shramev Jayate scheme, in New Delhi. (PTI)
The labour reforms announced by Prime Minister Narendra Modi will go a long way addressing concerns raised by the industry over the high-handed approach of inspectors. The new labour inspection scheme, which is being seen as a model e-governance initiative of the government, would bring manual intervention with regard to inspections to a minimum and allow technology to dictate what to inspect and how to inspect.

Industry has raised concerns that one of the impediments for investments is the cumbersome processes in the country. This has put the country closer to the bottom of the list of countries on ease of doing business index.

At present 175,000 inspections by 8,000 inspectors take place in the country in a year. This is set to change with new labour inspection scheme.

Under the new scheme, computer would randomly decide where an inspector has to go inspection and not the inspector himself. Moreover, once the inspection is complete, a report has to be filed within 72 hours. And the entire information has also to be put on the website so that owner of premises where inspection was conducted can file a grievance, if required.

At present inspectors have discretionary powers and they have reportedly used this power often to harass owners of industrial units. The plethora of labour laws also does not help the industry.

Simplification of procedures has been a long standing concern for industry the launch of the 'labour inspection scheme' will bring in a lot of transparency and accountability, said Chandrajit Banerjee, director general at Confederation of Indian Industry (CII).

Another step towards providing a business friendly environment to industrialists is the launch of unified labour portal - Shram Suvidha. This will bring four Central government organisations Employees Provident Fund Organisation (EPFO), Employees State Insurance Corporation (ESIC), Directorate General of Mines Safety (DGMS) and chief labour commissioner under one platform providing single window operations for online registration of units, reporting of inspections, submission of annual returns and redressal of grievances.

Compliance sheet for the industry has also been reduced from 80 pages to a single sheet. This would mean that in one document a company can file returns declaring compliance for 16 central laws. The centre also plans to ask states to provide similar mechanism for taking more than 25 clearances at the state level.