Labour Reforms can Boost Business Environment in India

The changes introduced in labour laws and policies to generate employment, safeguard workers’ rights and interest, and protect them from being exploited by their employers are known as labour reforms. The Indian labour laws are so ancient, rigid and complex that they could not match the current business environment.

Labour reforms are important in India because of the changes introduced in laws and policies framed by the government to protect labour’s rights and their interest and save them from getting exploited by employers. The Industrial Dispute Act 1947 and the Minimum Wages Act 1948 are some examples of labour reforms.

During the colonial period, the labourers were treated as slaves. After gaining independence in 1947 and post the creation of the constitution in 1950, labourers received their fundamental rights. Since then, the laws have been tweaked by governments to achieve the above-mentioned objectives.

The central government has proposed the replacement of 29 labour laws with only four codes to simplify and modernise labour regulation.

The major codes in the labour reforms are as follows: 

1. Code on Wages

2. Industrial Relations Code

3. Social Security Code 

4. Occupational SafetyHealth and Working Conditions Code

With time passing by, the quality of labour and their needs are changing and so are the laws for them. Now, all the laws protecting the rights and interests of the labours which were not easy to remember or understand have been categorised into four simple codes.

Labour Market Reforms

In the past few years, the policy interventions used by the government which have spread widely are reforms of labour legislation. These are used to fix the negative impacts of the economic and financial crisis globally. 

• The developed economies have felt these labour market reforms in the period of rising unemployment rates rapidly and with limited public resources as a useful instrument to harbour employment in the unemployed era.

• The need to protect the labourers from the effects of decreasing Labour demand due to the fluctuations in international trade has been focused more by the developing countries.

Unemployment 

Many new labour reforms in India have been done in past years, the main problem that needs to be addressed is the implementation and jurisdiction of laws. The Labour reforms in India are playing a major role in creating hindrance in creating employment opportunities in the organised sector industries because of the rigidness and complexity of these reforms. 10 million youngsters who become labour resources every year had to work in unorganised sectors because of the less employment in the organised sectors.

The unemployment can only be cured if the labour reforms become flexible, India gets more Industries that need a huge number of labours i.e. labour-intensive industries, and also labour friendly industries which help Labours to enhance their lives and give them a proper wage.

How do Labour Reforms Influence the Business Environment?

The reforms which have been done to save employees’ rights and interest has influenced the Indian market in both negative and positive ways. Many laws were announced in the market for the welfare of both the employees and the Industries. The economic reforms of India contributed to the development of the economy and created it a high growth economic country. But India still has to go a long way and that will be done by the second generation of their reforms which are the Labour reforms.

It was the first half of the 20th century when most of the Labour laws and reforms were enacted to stop the labour exploitation in manufacturing industries. That was a different time and now the time is different because of Information and Communication technology. China is known as the factory of the world because of its cheap manufacturing by their kinds of laws.

These reforms were criticised because of lack of knowledge, labour looked at it as a “hire and fire” policy and got scared of getting fired just by a clap only. The companies which have employees of 100 or more need the approval of the Government of India to lay off the employees and since the government does not permit to lay off any employee generally but it gives the permission rarely only. It is not a reform related to hire and fire but it is just what the current world needs and the modern economy and business environment.

Conclusion 

The labour reforms are basically a set of laws and policies , and these Labour reforms are done to save rights and interests of labourers. Government always tries to simplify and also modernise the laws and policies of labour reforms. The labour reforms also have influenced the business environment of the country in some ways. It helped India to develop its economy. The rigidity and complexity are the only downFalls of these reforms. Unemployment can be cured by making laws a little flexible.