A slew of labour reforms were introduced by Prime Minister Narendra Modi on 16 October 2014 at the Pandit Deendayal Upadhyay Shramev Jayate Karyakram organized by the Union Labour Ministry. The entire programme consisted of a day-long conference held at Vigyan Bhawan in New Delhi. The conference was attended by the labour, health, employment, and vocational training ministers apart from other administrative officials of the various Indian states. PM Mr. Modi chose the inaugural speech as an apt platform to introduce these crucial labour reforms to the country. The launch of the PDU Shramev Jayate scheme was of prime importance to the economy since it sought to improve services in labour and industries, said the PM.
Complementing Make in India
On 25 September, just prior to his visit to the US, PM Modi launched his government's flagship "Make in India" campaign. The campaign is designed to transform India into a manufacturing hub and attract investors from across the globe to set shops here. While Asia has certainly become the center of manufacturing and services for businesses and enterprises worldwide, India still lags behind in terms of the contribution of manufacturing to the national GDP. The NDA government highlighted 25 key sectors where foreign investors may earn rich return on investments made in India. The introduction of Pandit Deendayal Upadhyay Shramev Jayate Karyakram was the NDA government's attempt to introduce labour reforms that shall complement the Make in India campaign allowing for more international businesses to set up units in the country.
Why does India need labour reforms?
Even at the launch of the Make in India campaign, some of the most renowned entrepreneurs and a number of head honchos had mentioned the need for key labour reforms to improve the ease of doing business in the country. India's ranking in the World Bank's 2013 Ease of Doing Business Rankings was 140. Ranked very low among the 189 economies rated does not bode well for the nation which has been trying to establish itself as the outsourcing hub offering both manufacturing and services to other nations. While India's natural resources and availability of labour is abundant most of the investors seem to be put off by red tape, and unfriendly labour policies. The introduction of labour reforms had become an important factor that would determine the success of Make in India.
|Name of the Project
|Project Start Date
|Purpose of Project
||To Introduce Labour Reforms
|Object of Project
||To complement 'Make in India' Campaign
||Shram Suvidha Portal Launched, Wage
Ceiling of Labourers Raised to
INR 15000 Per Month, etc.
The Pandit Deendayal Upadhyay Shramev Jayate Karyakram was named after the nationalist leader and philosopher Deendayal Upadhyaya who has been PM Modi's long time role model and hero. On the occasion of the launch, the Prime Minister said, "Shramev Jayate (labour is triumphant) has the same power as Satyamev Jayate (truth is triumphant) in the development of our nation."Labour problems in the country have remained persistent since they are always viewed from the industrialist's point of view and not the shramik's (labourer) point of view. The Shramev Jayate scheme intends to eradicate these concerns and thus shall implement labour-centric reforms that shall boost the entire system, he said.
Ending the 'Inspector Raj'
A Unified Labour Portal, now known as the Shram Suvidha portal was launched by the Prime Minister as a platform to facilitate the implementation of a transparent system for information and database management. Shram Suvidha shall be universally accessible putting an end to arbitrary methods used for labour inspections and shall herald a free and fair Labour Inspection Scheme. Referring to this "labour raj" as a menace that has tormented the Indian industries and has held the economy at ransom, the PM said, "Inspector Raj...we heard this since our childhood and we thought it is for policemen, only but then we realized it's a lot more."
Units for labour inspection, prior to the introduction of the reforms, were chosen at the will and pleasure of the local labour inspectors. Inspection criteria have hitherto remained arbitrary and this makes way for corrupt practices with inspectors harassing owners and employers for any arbitrary violation noted. The interests of the labourers remained unprotected due to the corruption that infested the system.
The reforms implemented by the scheme will now bring about a complete change in the way these labour inspections are conducted. The criteria, having been formulated objectively, will be uniformly implemented. The inspection of units will be centrally generated independent of the inspectors' whims and the inspectors will also be required to upload the results on the portal within 72 hours. This shall make record keeping transparent and the selection of labour units for inspection shall be random.
The new regulations for inspection were sent out as text messages to about 1800 labour inspectors and an official communication was despatched following the launch.
Benefit to labourers
A host of benefits for the labourers was also announced by PM Modi. The wage ceiling of labourers across the country was also raised from INR 6500 per month to INR 15000 per month. A minimum pension scheme was also introduced by the PM to assure all labourers of a minimum pension (INR 1000) following superannuation. Key changes have also been made to the PF accounts of labourers across the nation. The process of associating all PF accounts to a Universal Account Number (UAN) has been introduced. Labourers working in the organized sector will not need to apply for transfer of PF when they change employers. This also means that PF account details can be viewed from anywhere in the country. About 6-7 lakh labour-intensive units across the nation have also been issued a unique Labour Identification Number, or LIN for easy administration.
In an attempt to improve employability and skill development for labour, the government has promised to promote the Industrial Training Institutes (ITIs).
The labour reforms introduced by the government of India received mixed responses. Industries and businesses in India have been seeking forceful reforms in the archaic labour laws of the country for a long time. The introduction of this scheme has been viewed as the first step to enacting these long overdue changes in the system. There has been some criticism, though, that the scheme is hardly adequate to clean up the system. The government remains positive about the scheme. At the launch, the PM emphatically said, "The shram yogis who emerge from this scheme will become rashtra yogis. This is a scheme that will help Make in India succeed".