Tackling India’s labour practices is central to new Prime Minister Narendra Modi’s efforts to revive economic growth and bolster tax revenue. Employment laws for companies that have more than about 100 staff are stricter than all but two of the 34 countries in the Organisation for Economic Cooperation and Development, resulting in a disorganised economy composed mostly of small businesses where employees have few rights.
“There’s so much overlap that, as it’s often said, a company in India can’t comply with 100 labour laws without breaking 20.”
India’s 44 federal labour acts — the oldest of which dates to 1923, when the British ruled the subcontinent — and more than 150 state laws, govern how workers can be hired and fired, their safety and compensation. There are laws on how many times a factory must be painted, how the toilets must be tiled and even the correct place for an employee to spit!
The government introduced bills this month designed to ease some of those rules, including improving workers’ safety, allowing more overtime, increasing penalties for flouting regulations and permitting more women to work night shifts. It also encouraged the training of more apprentices to improve the prospects for those joining the workforce.
