"Reform of the labour law is vital for the revival of manufacturing sector in India, without which the "Make in India"campaign is doomed to fail."Discuss critically.
Labour laws in India have been stringent from years. India’s labour laws are restrictive in nature and hurt investments in the manufacturing sector by industrialists. No doubt, Indian labour force has remained much more disciplined and cooperative in the post-reforms period leading to a decrease in the number of strikes and lockouts, but certain provisions like Chapter VB of the Industrial Disputes Act (1947), which has rigid provisions such as compulsory and prior government approval in the case of layoffs, retrenchment and closure of industrial establishments employing more than 100 workers; the Contract Labour (Regulation and Abolition) Act (1970) states that if the job content or nature of work of employees needs to be changed, 21 days’ notice must be given and further, the Trade Union Act (1926) provides for the creation of trade unions where even outsiders can be office-bearers.
This hurts investor faith and restricts economic growth. Also, rigid labour laws discourage firms from introducing new technology, requiring some workers to be retrenched, etc.
‘Make in India’ campaign is related to manufacturing sector industries, which require quantity as well quality of labours. So, expecting big changes in productivity and job creation requires maintaining a comprehensive environment with proper industrial and labour code law, for the success of Make in India campaign without which, the campaign may doom to fail.