Modi govt rams through anti-labour laws in the hope that this would boost investment and growth
Despite anti-labour and pro-corporate policies, which helped India improve its position in the ease of doing business index, business sentiment is low despite the ludicrous changes in labour laws
India is ranked 77 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of India improved to 77 in 2018 from 100 in 2017. Ease of doing business in India averaged 124.82 from 2008 until 2018, reaching an all time high of 139 in 2010 and a record low of 77 in 2018. In the background of better and easier provisions for doing business implemented by RSS controlled BJP government led by Narendra Modi during the last five years of his first term as the prime minister, could India make any meaningful progress towards improving India’s growth prospects? The answer definitely is in the negative as data speak.
Make in India, the Modi government’s flagship scheme seems to have been given a decent burial as it remained only on paper with not many takers. Also, unemployment rose to the highest level in 45 years.
According to a recent survey business sentiment in India fell to its lowest level since June 2016, as companies were worried over a slowing economy, government policies and water shortage. Predictions of softer activity growth underpin the downward revisions of profit outlook, subdued hiring plans and relatively muted capital expenditure. The net balance of private sector companies foreseeing output growth in the year ahead fell from 18 per cent in February to 15 per cent in June. India’s economic growth too slowed to a five-year low of 5.8 per cent during the period.
All these drawbacks and negative sentiments do not bother the Modi government. It is busy in the pay back mode leaving no stone unturned to reward the corporate houses which by all means ensured a brute majority for Modi’s second term.
The government committed to liberalisation, privatisation and globalisation did not think twice to make the Indian working class pawn so as to enable the business houses reap enhanced super profits. Modi and Co executed the ‘unkindest cut of all’ on the working class by taking steps to deduce the existing hard earned 44 labour laws into four labour codes — Code on Wages, Code on Occupational Safety, Health and Working Conditions, Code on Industrial Relations and Code on Social Security.
In its tearing hurry to honour its anti-working class commitments to the corporate honchos, the Modi government on July 23 introduced two of the codes namely the Code on Wages and the Code on Occupational Safety, Health and Working Conditions (OSHW) in the Lok Sabha.
The brute majority that the Modi government enjoys in the lower house helped it to pass the Code on Wages Bill, 2019 on July 27 with a claim that that the Code will universalise the provisions of minimum wages and timely payment of wages to all employees irrespective of the sector and wage ceiling.
The Code replaces the four laws, the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.
The Code to say the least is full of ambiguities, contrary to the tall claims made by the Union labour minister while moving the Code. The terms ‘worker’ and ‘employee’ and their definitions in the Code are confusing and will only help discriminate them.
Worker is defined as a person employed in an industry who does work including manual, unskilled, skilled, or technical work. Employee is defined as a person employed on wages who does work including skilled, semiskilled unskilled, technical, managerial, and administrative work. Unless the ambiguity is made to help the business houses, a clear, common and broad definition of employee/ worker has to be incorporated.
Further in the Code, provisions related to bonus payments are restricted and will not apply to establishments in which 20 or more persons are employed. Similarly, the central or state governments can fix factors by which minimum wages will be determined for different types of work including skills required, difficulty of work assigned, and geographical location.
The experience and length of service of worker/ employee in an organisation is not taken into account when fixing minimum wages. Also, the minimum rate of wages is being fixed on the basis of the number of working hours in a day. Neither the rate of minimum wages nor the minimum number of working hours is explicitly mentioned in the Code, and hence it gives arbitrary freedom to the government to fix the number of hours in a working day. Though the code ensures one day of rest out of the seven working days, the employer can compel the worker-employee to work on the rest day also by offering the overtime wages.
The Code on Occupational Safety, Health and Working Conditions (OSHW) Bill, 2019, also introduced on July 23 in the Lok Sabha and yet to be adopted has proposed one registration for an establishment. The proposed Bill seeks to consolidate 13 labour laws, including the Factories Act, the Contract Labour Act, the Interstate Migrant Workmen Act and specific laws covering beedi workers, cinema workers, construction workers, dock workers, plantation workers and motor transport workers, sales promotion employees and working journalists.
The Code on Wages Bill entertains practically none of the suggestions of a Parliamentary Standing Committee. The collective suggestions of various stakeholders and a Parliamentary Standing Committee, have been ignored in the proposed Labour Code on Wages Bill and the Code on Occupational Safety, Health and Working Conditions Bill.
The government has arbitrarily set aside the minimum wage arrived at after prolonged deliberations in the Indian Labour Conference. On July 10, the government announced the minimum wage to be Rs 178 per day, which is less than the wage being currently distributed in as many as 31 different locations across the country.
One significant suggestion of Parliamentary Standing Committee was with regard to definition of “worker” and “employee” on which there were disagreements between the industry bodies and the unions.
The unions were almost unanimously of the view that ‘employee’ is a much widely used term and allows a larger number of persons to access statutory benefits. The Standing Committee felt that the Code lacked consistency in its use of both ‘worker’ and ‘employee’ terms and underlined that since minimum wage is a matter of right for every working person, a common and comprehensive definition of the employee/ worker needs to be given in the Code.