Towards States Induced Third Generation Reforms…

By, thefocus_admin - May 12, 2020 04:32:25

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Except Gujarat, Uttar Pradesh, Madhya Pradesh, Rajasthan are considered as the industrially under-developed states, and therefore, their pro-active labour law changes and far-sighted measures to pave its way for industrialisation gives hope of economic boost in the coming months…

Shreya Rohit

COVID-19 has posed various threats and challenges to human lives and the governments too. Along with securing the health of the citizens, India faces a significant problem of job losses and alongside creating new job opportunities. It’s undoubtedly a mammoth task. Meanwhile, millions of labourers are flocking back from to Uttar Pradesh, Madhya Pradesh and Bihar from Maharashtra, Gujarat, Kerala and Karnataka, while facing uncertainty with their jobs.

Uttar Pradesh Chief Minister Yogi Aadityanath has found the way to handle this difficult situation and seems to have become trend-setter on another governance practice. To cope up with the economic setbacks, Yogi government has decided to encourage and incentivise economic activity in Uttar Pradesh and has brought significant labour law reforms. As a timely action, Madhya Pradesh, Gujarat, Rajasthan, Punjab, Kerala has also followed and has brought critical changes in the labour laws in the states. Although Yogi government has sought mixed reactions and opinions from all quarters for this bold decision, the industrial fraternity is appreciating the move.

It is anticipated that about one crore migrant workers and labourers would be returning to UP, during the COVID lockdown. Yogi has made this move to not only bring livelihood to these workers but also retain them in their home state as an asset. As it is, many companies have hinted at withdrawing their businesses from China. This global milieu creates an excellent opportunity for India as it can bet for these companies to invest in India.

This is an opportune use by UP government, and it is getting ready to roll out the red carpet for companies coming to India from China, to facilitate them with all that is required and to industrialise Uttar Pradesh with the help of cheap workforce. UP government has passed the “Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020” to exempt all establishments, factories, and businesses from the purview of all but four labour laws, for three years. Labour Law is a concurrent list item, both the union and state governments have the power to consider and legislate on the items listed in the Concurrent List. Therefore, States can do law-making on the matter and only needs ratification from Union Cabinet.

And that’s precisely why doing a critical analysis of the new reforms is apt..

• Uttar Pradesh

Except for The Building and Other Constructions Workers’ (Regulation of Employment and Conditions of Service) Act, 1996, The Employees’ Compensation Act, 1923, The Bonded Labour System (Abolition) Act, 1976, and Section 5 of The Payment of Wages Act, 1936, and the provisions relating to the welfare of Children and Women in the laws, all other legislations have been suspended for 3 years.

• Madhya Pradesh

Companies with 100 workers to hire according to their requirements.
No registration required for contractors having less than 50 workers.
Henceforth, no filling 61 registers and 13 returns. Only one register and one return to be filled.
No factory inspection to be conducted for the next three months. Factories with a maximum of fifty workers will no longer have regular inspections. The inspection, if held, will be done should there be a written complaint or with prior consent from the Commissioner of Labour.
Third-party inspections allowed.
Registration and licenses to be mandatorily issued within a day.
Renewal of a factory license to be done once in 10 years.
Working hours raised to 12 hours from 8 hours per day. Overtime working up to 72 hours allowed. Flexibility in changing work shifts.
Shops and establishments allowed to work from 6 AM till midnight.

• Gujarat

Except for The Minimum Wages Act, 1948, the Industrial Safety Rules and The Employees’ Compensation Act, 1923, no other labour laws shall be made applicable to the new establishments.
Benefits to be available for 1200 days.
All approvals to be given online within 15 days.
Thirty-three thousand hectares set aside for new establishments. Land to be allocated in 7 days.

• Rajasthan

Working hours raised to 12 hours from 8 hours per day.
No restrictions on retrenchment and lay-offs on employees in establishments having more than 300 employees.
Condition to form trade union becomes stringent, would require 30% of the total workers as its members from the past 15%.

• Karnataka

New establishments would be able to purchase land directly from farmers. Earlier, the government would acquire land and then handover to the industries. This process usually took about three years.

• Punjab & Himachal Pradesh

Both the States have raised working hours from 8 hours to 12 hours per day, and 72 hours per week.

• Maharashtra

All the shops and factories to submit consolidated annual returns instead of multiple returns.

• Kerala

If the investor agrees to complete formalities within a year, the state government will facilitate new industrial licence within a week after the application is filed.

Apart from these significant changes which States have initiated, Union government is pondering over Agriculture reforms to cut down on archaic regulations, raise farm-gate prices, unify domestic markets as well as integrate the farm economy into global value chains, considering the sector’s importance for livelihoods. Approximately 16.5% of India’s gross domestic product (GDP) comes from agriculture, and nearly half the population in the country depends on an agro-based income.