Home >Opinion >Online-views >Opinion | Labour reform is important to support economic growth

For industrial growth, and ease of doing business in India, labour reforms is a must, and should be considered as a top priority for governments in the centre as well as in states.

India has improved its ease of doing business rankings. India’s rank in the World Bank’s Ease of Doing Business 2019 survey climbed 23 places to 77 among 190 countries surveyed. Still, attention must be paid to implementation of reforms on the ground for better industrial growth.

The proposed amalgamation of 40-odd labour acts into four labour codes was a bold step announced by the current government. And diligent efforts have been made by the labour ministry in the proposed code on occupational safety, health and working condition.

The code is expected to effect fair periodic inspections, mandatory registration of workplaces, and surprise checks in companies among other provisions to ensure better working condition and safety of workers at the workplace.

While it is important to make some of the inspections manually, a road map of digital inspection should be instituted for better transparency. While random inspections would be mandatory and is a welcome move, there is need for facilitators who will be required to help organizations on inspection requirements and how to improve the working conditions in case of deficits pointed out by authorities.

The merger of the Contract Labour Act in this safety code is a welcome move. The organized staffing industry is facing execution problems in manpower supply projects due to delay in getting licences. With the proposed changes in the code, the licence procurement for executing contract staffing projects will be easier.

It will bring ease of doing business for employers and promote organized employment for the job seekers through the prior obtained licensed staffing companies. The flexi-staffing industry has been asking for the regulation of the sector for long, and the changes being considered will be beneficial.

However, keeping in mind the changing world of work, it is essential to clarify some terms in the proposed code. The term “contractor" needs clarity to differentiate between job order contracts, and manpower supply contracts. At a time when freelancing and gig economy are new buzzwords across sectors, the ministry must adopt the words to clearly differentiate the role of contract staffing companies from contractors who drive project execution.

Labour reform is a tedious process but once implemented, it will be beneficial for industries and ultimately help in job creation. As a country with sizable youth population, we should strive to create a conducive atmosphere for industries for better employment generation. The labour reforms including the code on occupational safety will reduce hassles and paper works for industries, and in a way improve productivity.

The reforms will give the required push for simpler labour laws, and help in economic growth. It needs to come into force faster for a developing economy like ours.

Suchita Dutta is the executive director at Indian Staffing Federation.

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