From UPSC perspective, the following things are important :
Prelims level : Nothing much
Mains level : Labour regulations - informal sector
A huge fire has engulfed a residential-cum-production unit in a congested part of Delhi, killing over 40 people. It has exposed the precarity of the every-day life of workers in this country.
- Numerous industrial clusters have mushroomed in the bylanes of residential localities and slums in our big cities.
- Corruption – This is because of a handful of erring officials of civic agencies.
- Regulations – also, the non-existent regulation of labour conditions in micro-, small- and medium-sized industrial and commercial establishments is a reason.
- Migrants – In these smaller establishments, the workers are mostly migrants, and tend to work long hours for meagre wages. They are crowded into living quarters inside the production unit itself.
- Labour laws – the limited coverage of labour laws indicates the lack of state regulation of several kinds of work relations and workplaces.
Out of reach laws
- Neglected sections – key labour laws in India ignore a large section of workers who are denied the rights and benefits due to less regular work contracts, length of employment, nature of the establishment, size of the workforce, etc.
- Only a minuscule section of organised workers have actually been granted rights.
- Ease of doing business – the dominant discourse on the “ease of business” projects India’s labour laws going against the development of the free market.
- Labour regulations – The image of protection by the law to organised workers of large industrial establishments is used to project India’s labour laws as cumbersome and “anti-labour”.
- Industrial relations – Any regulation or interventionist approaches to industrial relations have become a thing of the past.
- Employers’ concerns – Employers’ claims about the lack of labour market flexibility in India are unsustainable.
- Labour market flexibility in India – The high levels of employment of contract labour in all kinds of industrial and commercial establishments, steady growth of the informal sector, high labour turnover, the pattern of extended overtime by a majority of workers, the growing presence of apprentices and “fixed-term” workers in industrial enterprises, the pattern of deskilling or high-skilled workers entering lower-skill segment jobs, the presence of a weak trade union movement which is unable to prevent retrenchment show extreme flexibility to employers.
- Informal sector – deregulation of a large number of work relations is evident in the watering down of the provisions of labour inspection, the growing paradigm of self-certification by employers of their compliance with labour laws, and the tweaking of many statutory labour laws on occupational safety standards, work hours, minimum wage, compensation, industrial disputes, etc. by successive governments.
The retreat of the state
- The enhanced power of employer – exemptions to smaller industrial and commercial establishments from furnishing proof of compliance with statutory labour laws, amendments diluting the authority of the labour inspectorate, have enhanced the power of employers across the board.
- “Private power” of employers – to unilaterally fix wages, extract overtime, manage leaves, determine compensation, etc. has increased with the withdrawal of the state from the regulation of labour-capital relations.
- State’s retreat – from an Anaj Mandi in North Delhi to a real-estate construction site in Mumbai to a garment factory in Tamil Nadu, to a brick kiln in Bihar, the lack of state is visible.
- Challenges with liberal policies – self-certification system, weakening of the labour inspectorate, dilution of labour laws do not balance against the intense exploitation of labour by employers.
- To stay competitive, employers are consistently pushing down labour costs by circumventing labour rights.