13 highlights
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Indian labour laws needed serious reform. But the ordinances being promulgated by state governments are, under the pretext of reform, unleashing a whole-scale assault on labour.
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Indian labour laws had the unique distinction of representing the state’s war on both capital and labour. They were irrelevant to 90 per cent of India’s labour force. At best, and very rarely, they protected a small section of it.
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The work of KR Shyam Sundar showed in great detail that these laws were, in his phrase, “not even a paper tiger.”
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It is a myth that India’s labour laws increased Indian labour’s bargaining power.
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These laws were excessively complex. Some laws created rigidities that had nothing to do with labour protection. They disincentivised industry investment in human capital.
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The first is an assault on constitutionalism. Previous governments have abused the ordinance route. But the brazen use of ordinance to suspend such important provisions of the law, when Parliament is already deliberating on the matter, shows contempt for democracy.
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Allowing the states to override central legislation, without justification, will create future problems for federalism.
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Second, we are seeing a systematic assault on whatever little bargaining power labour has left. We inflict needless duress, indignity and the spectre of poverty on millions of workers by refusing to provide adequate social support. We artificially create a mass army of reserve labour, barely on the brink of subsistence, so they have no option but to work on any terms that are offered.
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But here is the dirty secret for why governments and employers hate the MGNREGA. Its real effect is that it puts a floor under labour, and marginally improves its bargaining position.
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The third is an ideological assault on Indian labour. The narrative build-up has been that India’s inability to attract companies leaving China has largely to do with labour. Indian labour’s capacity to supposedly obstruct the onward march of Indian capitalism pales in comparison with the state and Indian capital’s capacity to inflict damage on the Indian economy.
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The fourth is the cultivation of an authoritarianism: The more we can punish our own people the more salvation there will be for us. The ease with which we applaud 12-hour working days, the machismo with which we applaud the gutting of grievance redressal, suggests a deeper pathology that might have nothing to do with economics.
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We need to reclaim the word reform. “Reform” should be used only when a particular measure actually achieves a desired objective. Gutting environmental laws is not “reform.”
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The Industrial Relations Code was a good beginning by the Modi government. The ordinances are a travesty.