PM Modi’s focus is on labour reforms as jobs gain spotlight before 2019 elections


Prime Minister Narendra Modi has dropped one of the most contentious elements of his proposed labour reforms, paving the way for his long-awaited industrial relations legislation to be introduced to India’s parliament by April 6.

Labour minister Santosh Kumar Gangwar said in an interview on Tuesday the administration had abandoned the plan that would have allowed companies with as many as 300 workers to lay off staff without seeking the government’s permission, and would keep the current limit of 100.

The changes are part of a process to streamline 44 different labour laws into four codes as the government pushes forward with its efforts to formalise the $2.3 trillion economy.

Modi’s administration will introduce an industrial relations bill in the parliament session that ends on April 6, according to a person with knowledge of the matter who asked not to be identified. The bill, which seeks to ensure better packages for fired staff and longer notice periods by unions before announcing strikes, will be pushed as soon as it is cleared by the cabinet, the official said.

The government’s move to overhaul labor laws, even in a diluted form, is a step in the right direction, said Madan Sabnavis, chief economist at Care Ratings Ltd. “Land and labour are two major reforms which the government has not taken because both are very controversial.”

India has no reliable data to assess how many jobs were created in the one of the world’s fastest growing large economies.

Still, the labour ministry’s figures released March 12 show India added 136,000 workers across eight sectors between July to October 2017, while the latest private surveys reflect a bleak picture. In the week ended February 25, India’s jobless rate rose to 6.1 percent compared to 5 percent in January, the highest monthly rate in the past 15 months, data from the Centre for Monitoring Indian Economy showed.

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