LABOUR REFORMS IN INDIA AND ITS ROLE IN ECONOMIC DEVELOPMENT

Shanaya’s father runs leather industry. She is a research scholar doing research on labor reforms in India. Once she visited the industry with her father as she had some queries to be asked from the employees there. She became utmost happy to see the state of affairs and positive answers from the employees regarding their working conditions, skill training ,enhancing knowledge base, perks and packages and redressal of grievances .Perhaps this was a fabricated picture which she received but she had to go there without telling after few days and she was stunned to see the real picture. All the employees were on strike demanding fair pay and regulation of working conditions. They were made to work for extra hours without any benefits. Even leaves were hardly granted and they had to use the washrooms which were not being cleaned for many days. No social security and the situation was really dismal.
As she was leading protagonist of labor reforms. She promised to talk regarding all these sorry affair of states to his father, where she had a deep discussion regarding labor reforms and its role in economic development with his father where she left no stone unturned in letting his father realize the importance of employees welfare.
In the evening she went to her father to meet him pretending she does not know anything about the industry.
Shanaya- Papa, as you know I have to complete my theses by the end of the month ,I want your view points regarding importance of labour reforms , its importance?
Father-Its indeed a pleasure Shanaya to have a discussion with you regarding labor reforms in India..
Shanaya -My first question to you, what is labor reform?
Father- Shanaya labor reform has wide connotations .It means taking steps to increase production, productivity, employment opportunities in the economy while protecting overall interest of labour.
Shanaya-What do you mean by overall interest of labour?
Father-It means skill development, retraining, redeployment, updating knowledge base, enhancing leadership skills. labor Reforms also include labour laws reforms.
Shanaya-May I know about acts regarding labor reforms in the past ? As I know about recent reforms. Acts reinstated in the past would help me to do a comparative study and conclude better.
Father-Ok Shanaya let me tell you some of the very important acts –
1.Wages boost the morale of the employees .Art 43 ensures right to living wage and conditions of work ensuing a decent standard of life. So wage regulation becomes utmost important.
Payment of Wages Act 1936-Under this act, employees should receive wages on time and without any unauthorized deductions. Section 6 requires that people are paid in money rather than in kind.
Trade Union Act 1926—It provides for registration of trade union of employers and workers.It confers legal and corporate status on registered trade unions.
Minimum Wages Act 1948-For fixing/revising minimum rates of wages for employment. The minimum rates of wages also include special allowance, Variable Dearness Allowance which is revised twice a year linked to Consumer Price Number.
Payment of Gratuity Act 1972-Paid to establishments which have more than 10 employees. Gratuity is paid to employees if he or she resigns or relieves .
Payment of Bonus Act 1965- It applies to enterprises involving up to 20 employees.Bonus being paid as according to the productivity of the employees. The minimum bonus of 8.3% is payable by every industry and establishment under the section 10 of the act.
The Contract labour ( Regulation and Abolition ) Act,1970- A contract labour is a person who is hired,supervised,contracted and remunerated by a contractor ,who ,in turn is compensated by the user enterprise.The concern to improve the working and living conditions of contract labour and the Supreme Court of India’s observations in the case of standard vacuum refinery company Vs their workmen,resulted in the enactment of this act.
Shanaya-Yes papa thanks for telling me all this now I would like to add my share of knowledge regarding recent reforms like Shram Suvidha portal ,under this government would allot Labour Identification number to nearly 6 lakh firms providing e-filling of annual returns by the employees
UAN ( Universal Account Number Scheme)-for all provident Fund contributors which will allow portability and online tracking of PF benefits.
Random Inspection Scheme-To bring transparency in labor inspection.
Apprentice Protsahan Yojana-will support manufacturing units by reimbursing 50% stipend paid to apprentices during first two years of their training
Revamped Rashtriya Swasthya bima yojana, Protocol on trafficked child labour, Protection of the interest of women workers, Equal remuneration act( 1976),social security schemes insurance and medical benefits, and development of necessary skills under skill India programme.
Father- Shana, there are too many legislations regarding protection of employers indeed. May you please tell me the role of these labor reforms in economic development.
Shanaya- Yes papa changing labor rules to make it less rigid, a country may create more jobs, reduce the duration of unemployment, increase productivity and ultimately achieve economic growth. Most economically successful countries all have flexible labor regimes and vice versa. Even humane and just conditions of working act as motivating factor on employees to work efficiently and boosting overall productivity.
Father-Thanks Shanaya for making me aware of all these things and now I realize my mistakes which I commited while running leather industry. I will talk to union of workers and resolve the problems as early as possible.
Shanaya made father realize the importance of employees welfare to his father. But the story does not end here .The real problem lies in turning laws in books to laws in action. The private and unorganized sector does not comply to all the rules and regulations strictly. Why skilled labor is moving out of India? Why is brain drain occurring?. As they are paid more and ensues better living and working conditions. laws in India are too much complicated. Harassment of juveniles, bonded labors, migrant workers has posed severe threats to the economic growth. Despite enactment of child labour ( Prohibition and Abolition) Act still child labors are being exploited . Sachar committee recommended legislation for inclusion of workers on boards, however, this had not been implemented. Sex discrimination too occurs at work place.
If India wants to raise its bar of economic and inclusive development. Loopholes in turning the enactments to action must be plucked out sincerely and let the employers back employees in realizing their worth in the organization as this will help create a bond between the employer and employee which maintains the stability and credibility at the top. Laws may be flexible and employee friendly to help in retaining them for long and securing the money involved in their training.International labor conventions need to be adhered to in the era of liberalization and globalization in order to head for inclusive economic development.

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