With some ground work done for increasing the share of manufacturing in the economy, the government has now once again picked up the thread on stalled reforms by consolidating 29 Central labour laws into four labour codes.
The challenge, going ahead, will be to demonstrate political conviction by communicating the importance of this reform, ensure stakeholders come on board, and states take it forward.
A BIG missing piece in India’s manufacturing story for long has been a complete overhaul of labour laws. In its second term, the NDA government boosted the sector through its production-linked incentives (PLIs), expanded the MSME definition to help them grow, and pushed for self-reliance in supply chains. With some ground work done for increasing the share of manufacturing in the economy, the government has now once again picked up the thread on stalled reforms by consolidating 29 Central labour laws into four labour codes.
The government tried doing it 5-6 years ago after an absolute majority in the 2019 Lok Sabha elections. It managed to enact the labour laws in 2019 and 2020, but dithered on their implementation. With the need to create more jobs in mind, it has now gone ahead to notify all the four codes, including the Industrial Relations Code that gives employers the flexibility to hire workers for shorter terms to meet seasonal demands. While this has been resisted by trade unions in the past, the government has walked the extra mile on employee welfare by allowing for gratuity benefits in the Social Security Code after just one year of service instead of five years now.
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