Narendra Modi govt working towards liberalising labour laws

Jun 16 2014, 08:30 IST
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The government is working towards liberalising labour laws to boost factory jobs The government is working towards liberalising labour laws to boost factory jobs
SummaryNDA govt has begun a fresh review of labour laws that have remained unchanged since Independence.

been invited for the consultations with the labour ministry next week. 

Under the National Manufacturing Policy (NMP) that the UPA government released in 2011, NIMZs are envisaged as industrial townships with world class infrastructure that would help increase the contribution of manufacturing to GDP to 25 per cent by 2022 from 16 per cent then. The ambitious plan notwithstanding, complicated and inflexible labour laws have been the biggest stumbling block to its success. 

Apart from the Delhi-Mumbai Industrial Corridor, five NIMZs have been given an in-principle approval but actual work on the ground is yet to begin.

Current data from the government shows that the manufacturing sector's contribution to the GDP dwindled to 14.9 per cent in the provisional estimates of GDP for FY14.

“It is a welcome move but at the same time the government also needs to review other laws including the Factories Act to bring about a comprehensive overhaul of the labour laws,” said Michael Dias, secretary, Employers’ Association of Delhi and a member of the Council of Indian Employers.

The labour ministry, which has also begun a review of the Factories Act, is hopeful that if changes in the Industrial Disputes Act can be made for the NMP, these can then be expanded to across the industry. 

Following consultations, the ministry will begin preparing a draft Cabinet note for the amendments.

It has already finished consultations on the issue with the department of industrial policy and promotion that is responsible for the NMP. Views and comments of all other ministries have also been taken on board.


* THE Proposal: Extend Provision of Section 25FFF(1A) of the Industrial Disputes Act, 1947 provided for mining operations to the manufacturing sector too 

* ON Retrenchment: Workers in a unit of the NIMZ can be removed without any compensation or notice but the employer would have to provide alternative employment at the same conditions in the same unit 

* ON Compensation: In case, alternative employment is not possible, the employer will have to compensate the worker at the rate of 20 days wages for every completed year of continuous service

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