Licence to exploit

Ignoring the rights of a section of Indians - mostly in the unorganised sector - that conspicuously lack any agency is easy to do

The cynical way to look at state ordinances relaxing labour laws for re-opened factories is that they recognise the reality of working conditions for the bulk of India’s workforce. Outside the large factories that hire unionised contractual labour, 72-hour work weeks and the absence of basic welfare and safety norms are hardly exceptions. If anything, these ordinances legally relieve business owners of constant harassment from the rent-seeking inspector and the costs of inducements to have them look the other way. But they also reflect the fundamental misunderstanding by the political class of what it takes to get the economy up and running and stoke investment. 

Ignoring the rights of a section of Indians — mostly in the unorganised (i e non-contractual) sector — that conspicuously lack any agency is easy to do. Since the bulk of factory workers are migrants, the political administration of the host state need not bother about their votes at election time — a point Karnataka Chief Minister B S Yediyurappa unwittingly underlined with his government’s appalling treatment of stranded migrants in Bengaluru. These Indian citizens may toil in, say, Pune, Bengaluru or Gurugram but they exercise their franchise in Bihar, UP, Bengal and Odisha. And if they’re labelled “infiltrators” — a term unfailingly applied to Bengali Muslim blue collar workers — then who cares about their exploitation anyway. 

Such routine and glaring exploitation of India’s workforce rarely gets factored into anybody’s politics (bar some desultory efforts by the waning Left movement). Few campaigns, including in the Left-ruled West Bengal and Kerala, have focused on the rights of migrant workers or enforcing the terms of the Migrant Workers’ Protection Law. 

The problem with this licence-to-exploit policy mode is that it hardly fits the grand vision of a prosperous, self-reliant India conjured by Prime Minister Narendra Modi in his fifth address to a locked down nation. But, in fact, this direction was already set by his government with “Start-Up India” in 2017, when the labour ministry advised states (several of whom agreed) to allow start-ups self-certification for six labour laws for at least five years. These laws include those that whi­te collar workers take for granted—provident fund, insurance, gratuity, and — notably — conditions for inter-state migrant workers. It’s a free pass, really, to skirt regulations. When the managements and owners of large powerful corporations from IL&FS to YES Bank show minimal concern for business ethics it is hard to expect small business owners to do the same. 

Yet there is something discomfiting in the notion that officially enabling manufacturers to circumvent workers’ rights can be posited as a means of improving ease of doing business metrics. Nor, on a practical level, is it likely to encourage a flood of investment dollars if only because competing nations with authoritarian regimes such as Vietnam and Bangladesh have an equally lax approach to worker rights. 

The real lesson is to fix the way regulation and regulatory and enforcement agencies function to improve the ease of compliance. As former bureaucrat K P Krishnan pointed out in a recent article, the conditions under the interstate migrant workmen Act are well meaning but so onerous that businessmen find them difficult and expensive to comply with and inspectors find them so tough to monitor that they tend to be observed in the breach. 

For instance, the law requires that migrant workers are paid wages similar to regular workmen — plus displacement allowance, journey allowance, pay during journey and so on, raising the cost of hiring them to unaffordable levels. This, in turn, incentivises contractors and business owners to understate statutory registrations, the consequences of which were visible in the large numbers of abandoned migrants in the big cities. 

Anyway, few states have moved to make the more meaningful labour reform of relaxing the restrictive hire-and-fire threshold from 100 — in place since 1980 — or deploying the useful solution of fixed-term contracts in a big way that would send even stronger signals. 

Weak worker rights as an investment incentive is just one element that investors consider. Productivity is the other and Indian labour compares poorly here. Securing authorisation for everything from water to electrical connections to building permits is such a hassle that a whole industry of middlemen exists just to facilitate these basic services. And then, living in India is no picnic either except for the very rich who can pay to exclude it behind gated communities — where they can rapidly forget about those torrid days when stranded migrants made their presence felt just beyond their walls.