Reform labour laws to create more jobs

The findings of the recent survey of job trends across states by the labour bureau should serve as an eye-opener for all concerned. States like Gujarat and Himachal Pradesh, which have introduced labour reforms, have lesser unemployment than Kerala and West Bengal, which have been following pro-labour policies. In other words, labour reforms create jobs, not destroy them. Yet, the United Progressive Alliance government is wary of introducing reforms in the labour sector for fear that it would antagonise the working class and the vote-banks it represents. As a result, antiquated labour laws that prevent investment act as a dampener for job creation.

West Bengal is a case in point. It was one of the most industrialised states in the country in the Fifties and Sixties but with the advent of militant trade-unionism in the early Seventies, the state witnessed a massive flight of capital. The shifting of the Tata Nano plant from West Bengal to Gujarat highlighted the anti-investment policies the state continues to pursue. Militant trade-unionism is nowhere as pronounced as in Kerala, which despite its high literacy, three international airports and congenial climate fails to attract investment. The murder of an executive at the Manesar plant of Maruti Udyog, is the latest instance of how uncontrolled trade unions can cause irreparable damage to industrial relations.

Yet, the UPA government has not summoned up courage to introduce the national manufacturing plan, which the Union Cabinet had cleared nine months ago. It is nobody’s case that labour should be allowed to be exploited by vested interests. At the same time, an industrialist, who invests money in a project, should have the freedom to choose his staff and get work done by them and in the event of failure should have the ability to lay off staff and, if necessary, close down the factory. To put it differently, the labour laws need reforms so that they meet modern-day demands and create more jobs.