Limiting monetisable time and country's prosperity...: Economic Survey 2024 on extended working hours in India

The Economic Survey 2024, tabled by Finance Minister Nirmala Sitharaman in Parliament on Monday, July 22, revealed that many countries offer more flexibility in office working hours and allow for more overtime compared to India. This is limiting the monetisable time for Indian workers and affecting their families and the country’s prosperity, the survey noted. Currently, working hours are limited to 10.5 hours in India, which is one of the lowest limits on working hours.

The survey compares the working hours of India with countries such as Bangladesh and Vietnam, with 11 and 12 hours, respectively. Countries such as China, Denmark, Indonesia, Norway, South Korea, Sweden and Switzerland do not have a limit on working hours.

The topic assumes significance as many business leaders, including Infosys founder NR Narayana Murthy, have recently advocated for a 70-hour workweek to improve productivity. Murthy's views triggered debates on work-life balance, while Ola CEO Bhavish Aggarwal too had endorsed a 70-hour workweek.

The survey also states that India has stricter overtime wage regulations that impact the growth of the manufacturing sector as production activities move to countries with lower overtime costs. Currently, India has a higher overtime wage premium compared to its peers and other advanced economies.

The Economic Survey further underscores that the present labour regulations have an unintentional adverse impact on the general workforce, especially women. Even though the regulations are designed to safeguard women and implement rigorous standards for all employees, they inadvertently restrict employment opportunities for women and impact overall job creation.

The survey also states that India has prescribed a higher floor space per worker in a factory compared to other economies. According to Malaysia's standard, as stated in the survey, an Indian factory with 1,000 square metres (sqm) of usable floor space can accommodate 82 more workers.

The Economic Survey 2024 has highlighted the need for labour laws to be reviewed and re-evaluated incentives for employers, with a focus on achieving better output for economic growth and prosperity in the manufacturing sector. Implementing more flexible labour laws would lead to substantial economic potential, promote gender inclusivity, and attract industrial investment.