Context:
Recent labor laws reforms in India look forward to the better proportioning of economic growth and their provision for a healthy workforce protection. These changes have resulted in the formation of a ” virtuous cycle of job creation.” In support, it helps develop sustainable employment and ensures growth besides inclusive growth: Economic Survey 2024-25.
Compliance Simplification And Increasing flexibility
This Survey highlights how deregulation and relief from compliance burdens can reduce business costs and enhance employment opportunities.
- Ancient Labour Laws
- The outdated Labour Laws, including the Factories Act, 1948, are choking regulations that extend to what kind of material to use for toilet paper and even dictate designs for toilet rooms. Such excessive micromanagements discourage efficiency in conducting business.
- New Labour Codes
- The new labour codes seek to make compliance easier, thereby increasing the flexibility of labour with the intent not to lose any protection given to workers while increasing the chances for job generation.
Overtime and Worker Welfare
- Overtime Hours
- India is compared on its overtime provisions against other countries in the Survey.
- The Factories Act, 1948 in India has limited overtime to a mere 75 hours per quarter, while other countries have set higher overtime hours such as Germany (351 hours) or Malaysia (312 hours).
- In a move to increase workers’ earnings, seven Indian states increased overtime hours to a maximum of 144 hours per quarter as part of labor law amendments.
Women’s Employment and Gender Inclusivity
- Labour Reforms for Women
- The new labour codes will address the following barriers to women’s employment.
- Safety protocols for the employment of women in night shifts.
- Expanding 26 weeks of maternity leave for gig and informal workers.
- Mandating crèche facilities in workplaces employing more than 50 employees.
- Providing for equal pay for equal work without any form of gender discrimination in recruitment.
- Women should be allowed to work in all sectors, including hazardous roles, with adequate safeguards.
Employment Growth and Economic Recovery
The Survey reports strong post-pandemic recovery in India’s labour market and increased formalisation of the economy, showing positive trends in creating jobs and economic inclusion.
Wages and Employment Trends
- Wage Trends: Real wages of both salaried and self-employed workers have declined from levels in 2017-18:
- Male self-employed wages went down by 9.1%.
- Female self-employed wages decreased by 3.2%.
- Male salaried employees wages dropped by 6.4%.
- Female salaried employees’ wages dropped by 12.5%.
- Male casual workers increased to 19.2%.
- Female casual workers increase by 24%.
