India: Rajasthan’s labour reforms – a taste of things to come?

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Boosted by the clear mandate delivered by the 2014 Indian general election held between April and May this year, the Bharatiya Janata Party (BJP) government of Narendra Modi is promising to revive India’s ailing economy by accelerating job creation and restoring investor confidence.

To help reach that goal Modi has revealed plans to increase foreign direct investment in certain labour-intensive manufacturing sectors, as well as public investment in infrastructure.

During his election campaign, Modi also discussed his plans to encourage “asset creation” and to allow companies to operate in a “cleaner” environment.

However, unions are deeply concerned by the example being set by BJP in the northern state of Rajasthan where a raft of labour law reforms – designed to make the state of 69 million people more “employer-friendly” – have just been approved.

The reforms, put forward by BJP member and Rajasthan’s Chief Minister Vasundhara Raje Scindia without consultation with the unions, have been unanimously slammed by national centres as “disastrous” for working people.

During his own tenure as the Chief Minister of Gujarat between 2001 and 2014, Modi’s drive for greater flexibility in the labour market, particularly in the form of Special Economic Zones, came under great criticism from worker representatives.

The Rajasthan reforms amend three crucial labour laws – the Factories Act, the Contract Labour Act and the Industrial Disputes Act.

And just last week, new proposals were made to amend two more pieces of legislation, affecting apprentices and the state’s 1,200 boiler operators.

But the amendment that will have the biggest impact on Rajasthan’s workers is that made to the Industrial Disputes Act.

Until now, only businesses employing up to 100 workers have not needed permission from the federal government to lay off workers or shut up shop.

The amendments raise this ceiling to 300 workers.

“More than 75 per cent of the workforce in this country work for businesses employing less than 300 workers, so what’s in store for the Indian working class?” asks Amarjit Kaur, National Secretary of the All India Trade Union Congress (AITUC).

 

Union wipe-out

The changes also make it tougher to register labour unions as the existing 15 per cent membership requirement for the registration of a trade union has now been raised to 30 per cent.

“It looks like the government wants to wipe out unionisation to give more power to the employers,” says Tapan Sen, General Secretary of the Centre of Indian Trade Unions (CITU).

“Employers want to stop workers from getting unionised, and even if workers are members, they look for ways to get those union members thrown out or union busted.”

Even Saji Narayanan, national president of Bharatiya Mazdoor Sangh (BMS), a union with links to BJP, is unhappy about the developments in Rajasthan.

“How can the government proceed with such anti-labour initiatives without holding a tripartite meeting and taking the workers and the unions into confidence?” he asks.

Employers’ associations however, who tend to see labour laws as an obstacle to job creation, have welcomed the reforms.

They are also pushing for tougher measures on strikes, and are demanding an end to another essential provision of the Industrial Act where employers must give 21 days’ notice before making any changes to working conditions – a measure the employers say leads to inefficient and inflexible production.

However, it is worth remembering that of India’s 460 million-strong labourforce, around 86 per cent is active in the informal economy – and the vast majority of these workers are not covered by any real legal protection.

To this end, India’s biggest eleven national trade union centres – including the All India Trade Union Congress (AITUC), Centre of Indian Trade Unions (CITU), Hind Mazdoor Sabha (HMS) and the Self-Employed Women’s Association (SEWA) – have issued a joint letter calling on the government to meet “the most basic bottom line needs of working people.”