Kick-starting reforms in the country’s antiquated labour laws, some of which date back to Independence, has been among the first significant reform measures of the Narendra Modi-led NDA government. However, it has strategically left out the most controversial of them — the Industrial Disputes Act, Chapter V B of which deals with retrenchment or hire and fire policy — for the future.
Less than a month after taking charge, the new government began consultations on amending half a dozen legislations, including the Factories Act, the Labour Laws (Exemption from Furnishing Returns and Maintaining Registers) Act and the National Minimum Wages Act. All these had been stalled for the past decade despite former prime minister Manmohan Singh often pointing out that the country’s labour laws needed first-generation reforms to keep pace with the industrial licensing reforms he kicked off in 1991.
Singh had argued that these laws were the biggest stumbling block in creating jobs for the youth and in turning India into a manufacturing destination.
The passage of the Apprenticeship Amendment Bill is widely seen as one of the biggest successes in steamrolling labour reforms.
While the changes could have dug in deeper to benefit more establishments, they must be seen in tandem with the government’s decision to lend ownership to skill development by making it a ministry. The amendments to the Apprenticeship Act, together with mapping of skills versus job requirements today, can potentially absorb the millions entering the labour market every year.
The setting up of a Skill Development Ministry fufills the NDA’s election-time promise of job creation by aiming to provide vocational training to youth in a country where only 2 per cent of the population has receiving any formal training.
Prime Minister Narendra Modi is understood to have personally finalised the contours of this ministry that will coordinate skill development programmes with over two dozen other ministries and go beyond the UPA’s target of training 500 million youths by 2022.
While the NDA’s labour reform push comes after a similar move by the BJP government in Rajasthan, it is facing stiff resistance from trade unions, including the Bharatiya Mazdoor Sangh, a trade union affiliated to the party. The Rajasthan government is considered a path-breaker in the sector and has successfully enacted amendments to the Factories Act, the Industrial Disputes’ Act, the Apprenticeship Act and the Contract Labour (Regulation and Abolition) Act.
However, the Modi government has, as of now, shelved a proposal to amend the Industrial Disputes Act which would have allowed easier retrenchment continued…