Make in India initiatives taking shape

Reform initiatives
The first set of initiatives, announced in October 2014, were the “unified labour and industrial portal” and “labour inspection scheme”. These are meant for objective criteria and a transparent process for labour inspection. These reforms have given a breather to industry, more so for SMEs, which are supposedly victims of arbitrary use of labour rules by labour inspectors.
The prime minister’s efforts to raise the monthly minimum wage ceiling from Rs6500 (US$105) to Rs15000 (US$240) and to ensure a retirement savings scheme (the EPF) for vulnerable groups and the pension system, though small, are laudable steps.
Further, to undo the malady in India’s labour market, some changes have recently been initiated in the three acts that largely govern India’s labour market - the Factories Act, Labour Laws Act and Apprenticeship Act. Amendments to some restrictive provisions of all these acts have been cleared by the Cabinet and are being tabled in Parliament.
Key changes proposed in the Apprenticeship Act include dropping the punitive clause that calls for the imprisonment of company directors who fail to implement the Act. The government is also going to do away with a proposed amendment to the Act that would mandate employers to absorb at least half of its apprentices in regular jobs.
In order to provide flexibility to managers and employers, the amendment to the Factories Act includes doubling the provision of overtime from 50 hours a quarter to 100 hours in some cases and from 75 hours to 125 hours in others involving work of public interest. This is seen by some as being anti-labour as it imposes greater working hours without ensuring their security and welfare. However, the penalty for violating the Act has been increased so as to deter exploitation.
Increasing working hours might also impact low worker productivity in India. Importantly, the number of days that an employee needs to work before becoming eligible for benefits like leave with pay has been reduced to 90 from 240, a pro-labour step.
The amendments to the Labour Laws Act meanwhile will allow companies to hire more employees without having to fulfil weighty labour law requirements. It is proposed that companies with 10-40 employees be exempt from provisions under labour laws that mandate them to furnish and file returns on various aspects.