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RIS
The announced implementation of the four Labour Codes by the Government of India last week is a bold and timely move, given the political opposition to the Indian Parliament passing the Codes in 2019 and 2020. Now that the long wait for their implementation is over, the question to ask is whether there will be a formal Labour Concord in place among the three stakeholders—the industry/employer, labour unions/workers and government. The Concord is necessary since it will uphold the essential elements of the labour codes, namely, trust, fairness and flexibility in their modus operandi.
Implementing the proposals for an experimental period of, say, three years would be help iron out the rough edges
Already a number of commentaries have appeared on the Labour Codes and we do not want to elaborate here the key aspects of the Codes and how they differ from the plethora of labour-related laws hitherto in existence. It is well known that some of the commentaries strike positive notes about the codes while others express their strong concerns. Is there no ground for striking a balance between the extreme views on the subject?
Is it irrational to consider the efficacy of the Codes on the basis of a Concord among the representatives of the stakeholders signed and sealed for an experimental period of say three years? Will such an approach heighten the good reputation of Indian labour unions and associations of being reasonable and flexible compared to the labour unions in the UK and Europe and the US?
Skill improvement on the job is a part of human resource development programmes that form part of industry’s core aspect for driving productivity and growth
If the proposal of implementation for an experimental period is accepted, Indian labour’s approach will set international standards for other countries to follow. Importantly, it would be a win-win situation for labour, industry/trade as much as it would be for both -- the treasury and the opposition that facilitate it. It is, however, important to note that labour codes without the support of sound industrial (including ease of business), trade and fiscal reforms cannot be as efficacious as required.
Higher productivity, as is well known, is as important as raising the investment rate for realising higher growth
Ideally, it is best to place the documents relating to the suite of refoms in fiscal, industrial and trade domains together with the Budget for 2026-27 for a meaningful discussion among the legislators. The discussion would then provide an opportunity to gain a common ground for acceptance at the political level. Such an initiative would likely foster an environment of further discussions among analysts and media, leading to the unveiling of reforms.
Ideally, these documents will need to highlight the need for sustaining high growth with fairness and justice for all segments, and for appreciating the links between the proposed reforms and productivity. Higher productivity, as is well known, is as important as raising the investment rate for realising higher growth. This is the right time to ensure that such an approach is rendered possible in the light of the positive technological shifts if not shocks, coupled with the growing awareness of new modes of digital thinking.
This is as exemplified by the recent interest in machine learning and artificial intelligence among the growing youth population that is tech-savvy and is willing to upgrade skills, when opportunities are thrown open to it. Skill improvement on the job is a part of human resource development programmes that form part of industry’s core aspect for driving productivity and growth.
Given the limited time available between now and the date of presentation of the Budget, it would be difficult to formulate and present reforms in other areas such as those relating to economic governance (essentially administrative reforms) and legal reforms.
This is the right time to ensure that such an approach is rendered possible in the light of the positive technological shifts if not shocks, coupled with the growing awareness of new modes of digital thinking
Those who worked in both academic and policy making bodies know how difficult it would be to convince the bureaucracy and technocracy to work out the needed governance mechanisms aimed at quick disposal of cases in a fair and just manner, and to bring about radical shifts in the existing legal system. But it would not be far-fetched to consider at least placing what may be called Notes for Reflection in these two areas at the time of the Budget presentation. That would be an important step to set the ball rolling in the right direction.
These initiatives would constitute the major agenda items for discussion and for passing of reform measures in the budget and post budget sessions so that India will be a trend setter for developed countries that are presently beset by structural impediments, institutional rigidities and confusion about the policies to be set to address the geo-political environment that has contributed to low growth, and high inequities.
