Lakshmana Venkat Kuchi
Education, agriculture, labour, one after another, the Modi Government has begun ticking all the reforms boxes with a view to prepare the ground for hassle free growth once the economy begins to revive.
Although it is becoming increasingly clear that Covid-19 pandemic is here to stay, for a longer duration than was earlier anticipated, we as a Nation can hardly waste time. In fact, with several sectors of the economy slowing opening after remaining closed for nearly two months, it is the most apt time to assess and reassess the policy changes needed in different sectors with the overall big picture in mind.
For sure, growth will be a casualty in the current fiscal, as is already being forecast by the rating agencies and global consultancy firms. India could suffer negative growth for the current fiscal is the estimation at this stage, though there may appear some green shoots. Agriculture for one, could be the one sector that will come to the aid of a beleaguered Nation hit hard by the ongoing Covid-19 pandemic.
Although there is opposition to the policy changes being carried out by the Modi Government, on a closer examination, some of the criticism seems misplaced. For example, in the agriculture sector, the legislation relating to farm produce and its trade may end up beneficial to the farming community. And if as the Government keeps assuring, if the minimum support price is factored into the pricing mechanism that the agriculture produce market would evolve the very reason for the farmers stir gets knocked out. But, on this score, perhaps the Government needs to walk the talk and come out with steps that can assure the farming community.
On Friday, the farmers stir across the country received tepid response, though it was strong in the north Indian States of Punjab, Haryana, and parts of Uttar Pradesh where the established APMC system is a known devil for the farmers. On this, the Government could do well with a more intense awareness programme, and if there are genuine grievances it should strive to remove all these misgivings.
Afterall, it is the farming community that has bucked the downward trend, shown by all the other sectors of the Government, barring the pharma and medical and sections of services sector.
In quick succession came key labour reform Bills that were passed in the Rajya Sabha that will give more operational freedom to entrepreneurs and enterprises with up to 300 workers, when it came to hiring and firing.
Labour sector reforms are something that the industry has been crying hoarse for quite some time, and the Government appears to have decided to take its chances, in the interests of spurring higher economic growth, post Covid.
What makes the passage of the key labour Bills somewhat controversial is that they were passed without Parliamentary scrutiny, with the Opposition boycotting the session. The three labour Bills on industrial relations, social security and occupational safety were passed by voice vote in the absence of the Opposition in the Rajya Sabha.
Over 29 labour laws have been merged into four codes. The Occupational Safety, Health and Working Conditions Code, 2020, will consolidate and amend the laws regulating occupational safety, health and working conditions of persons employed in an establishment and related matters. The Industrial Relations Code, 2020, seeks to consolidate and amend laws relating to trade unions, conditions of employment in industrial establishments or undertaking, investigation and settlement of industrial disputes. The Code on Social Security, 2020, will amend and consolidate laws relating to social security with the goal to extend social security to all employees and workers either in the organised sector or the unorganised sector.
The Parliament has already passed the fourth code - the Code on Wages (2019) last year. With the three Bills now ready to receive the assent of the President, the labour reforms box has also been ticked by the Government.
The Government believes that the changes brought about will add to the ease of doing business, which has been cited as one of the problem areas by entrepreneurs, domestic and foreign. But in this endeavour to ease doing business, the workers fear their interests were sacrificed without even consulting them.
The changes in labour laws and business environment is pretty much in consonance with changes many State Governments have brought in, for creating an environment more conducive for business, both services and manufacturing.
The Government maintains that the interests of the workers will be safeguarded and they would be provided universal social security with the expansion of the ambit of Employees' Provident Fund Organisation and Employees' State Corporation of India.
Multiple regulations and cumbersome processes often curbed the intentions of entrepreneurs, who now may be more inclined to venture out into self-employment and job creation activities. Which is why the stress now is on simple labour laws, one license and one registration for entrepreneurs.
Like many other policy changes and reforms, look good at first instance. But when it comes to implementation, it remains to be seen as to how much the Government will drive the officials to make things as easy, as it is being thought to be made.
If an entire range of policies, programmes and processes are made easily accessible, through digitisation with adequate safeguards, it will greatly hasten the ease of doing business. Provided, the entrepreneurial class is also honest and complies with all the rules and regulations.
Ultimately it all boils down to implementation, monitoring and incentivising the performer and weeding out the dishonest and disrupting elements, so that the entrepreneurs are left free of mental stress and concentrate instead on their core activity – of entrepreneurship, that is business through manufacturing and selling of services or products.
As things stand today, entrepreneurs must maintain multiple registrations, licenses to run a business under the present laws. Filing different labour returns is another mandatory requirement.
So, the new code of labour laws, ease and release the entrepreneurs from this rigour and instead the processes have been made simple. To that extent, they can heave a sigh of relief. But on the other hand, the new changes make it compulsory for the managements of small units also to issue appointment letters, digitisation of salaries and free annual medical check-up.
Trade unions and Opposition parties, have, however expressed the worry that the new labour regime could be misused by the management, which now have the freedom to fire if they employ less than 300 people.
The changes in labour laws that trade unions fear will keep the workers on tenterhooks and, it is not such a good thing after all.
Lakshmana Venkat Kuchi is a senior journalist tracking social, economic, and political changes across the country. He was associated with the Press Trust of India, The Hindu, Sunday Observer and Hindustan Times. He can be reached on [email protected]
and Twitter handle @kvlakshman