PM seeks review of labour laws

Prime Minister Manmohan Singh today called for a comprehensive review of India's labour laws on the grounds that some of these had outlived their utility and were impeding investment and economic growth.

"The physical barriers to growth and employment-creation, like infrastructure bottlenecks, are easier to deal with. The barriers that are more difficult to remove are the policies that have outlived their original purpose. Many of these are the legacies of the past that no longer have much relevance today. Indeed, some of them have become counter-productive and may well be hurting the very people they were meant to benefit," Singh said in his address to the 40th Indian Labour Conference.

Without identifying the laws that needed to be revamped, the prime minister said some were affecting India's traditional strengths like textiles.

This is the first time that the prime minister has called for a comprehensive review of all laws governing the working class. Till recently, the government had restricted itself to suggesting amendments to any specific legislation like the Industrial Disputes Act. Last month, speaking at the India Economic Summit, Singh had referred to the need for flexibility in labour laws.

"I sincerely believe that if we make the business of doing business in India less intimidating, less cumbersome, less bureaucratic, there will, in fact, be more investment and more employment, more investment in labour-using technologies and industries. A more flexible and transparent regime of laws, including labour laws, will, in fact, contribute to increased employment," Singh said.

He cited instances of multiple and parallel legislation creating "a vast paraphernalia of regulation". He said workmen, wages, employees and factories were defined differently in different laws pertaining to the same sector.

He said India, which was a force to reckon with in the textiles industry, might be unable to take advantage of the abolition of quotas due to a lack of flexibility in its labour laws. Singh tried to argue in favour of reforms saying that it would invigorate growth which would benefit all sections of society.

"We need new laws for new times. Laws which provide safety standards, which cater for the basic needs of workers, which take care of their welfare, which are flexible enough to create rather than destroy jobs, which increase the overall well-being of our people and particularly, the working people," he said.