The range of measures Prime Minister Narendra Modi passionately spelt out at the Pandit Deendayal Upadhyay Shramev Jayate programme on labour reforms reads like a road map to his Independence Day invitation to multinational corporations to ‘Make in India.’ The most significant of them all is the move to simplify the cumbrous current inspection processes, including by allowing enterprises the convenience of self-certification of documents. The random inspection process that is to be set in motion is expected at one stroke to cut through administrative red tape involving some 1,800 labour inspectors. Indeed, the removal of arcane procedural hurdles could curb rampant corruption and improve overall efficiency. But this is a bold policy shift for a country where a culture of industrial safety is woefully lacking. The system of inspections should be effective and should ensure that the protection of thousands of human lives is not compromised in any manner. The 2007 Minneapolis bridge collapse in the United States, the fires at Bangladesh’s garment units and the December 1984 gas leakage in Bhopal were all linked to a greater or lesser degree to the lack of proper inspections.
The digitisation of data on thousands of firms to facilitate a single-window system of compliance with various labour and social security laws is a laudable initiative. In particular, the friendly provident fund facility to unfreeze a whopping Rs. 27,000 crore of hard-earned savings and the portability of PFaccount numbers across employers is a reform long overdue. These conveniences are consistent with the welcome increase in the Employees’ Pension Scheme (EPS-95) up to Rs.1,000 — from the earlier Rs.300 — announced in the Union Budget. It is another matter that the Bharatiya Janata Party had canvassed for an enhancement of the pension to Rs.3,000 prior to the last Lok Sabha election. Evidently, the politically sensitive nature of these labour reform measures — even within the BJP-affiliated trade union bodies — was not lost on Mr. Modi. Only a few months ago, the Bharatiya Mazdoor Sangh opposed the Rajasthan Government’s amendments to the Contract Labour Act that sought to create flexibility for employers. Thus, Mr. Modi’s announcements were carefully couched in a conciliatory and accommodating tone that the new measures would be no less beneficial to workers. If protracted delays of the past to obtain clearances hurt productivity, they also caused an adverse impact on the interests of the workforce. Mr. Modi’s plan to draft a band of technology ambassadors to showcase the quality of existing vocational training programmes in India is well-conceived. There is no gainsaying the need for more such institutions.
