Saturday, June 25, 2016

Industry body FICCI seeks stringent laws to deal with labour unrest, says it's No 1 risk to Indian economy

By Our Representative
The Federation of Indian Chamber of Commerce and Industry's (FICCI's) annual study, “India Risk Survey 2016”, has ranked strikes, closures and unrest as the most important risk affecting the Indian economy, even as ironically declaring at one place that “industrial strikes and lockouts showed a waning trend this year."
Claiming to have reached the conclusion on the basis of a survey of industry experts and government decision-makers, the survey encompasses 12 key risks that pose threats to the entire economic ecosystem of the country, the report says, strikes, closures and unrest was rated as the highest risk in all four zones – North, East, South and West.
Yet, ironically, the report says, in the first four months of 2015 there were 40 strikes and lockouts, as against 53 and 121 strikes and lockouts respectively during the same period in 2014 and for 2013.
“In terms of the number of workers joining the strikes”, the report says, “It has come down from a high of 1.81 million organised sector workers in 2003 to one million in 2014.”
Providing more data, the report says, “The provisional figures for the first four months of 2015 indicate that less than 100,000 workers were affected as a result of strikes and lockouts. For the same period, the mandays lost due to strikes and lockouts stand at 445,986, as compared to 1,129,425 in 2014.”
Calling “civic and labour unrest” an India-wide phenomenon, affecting “all sectors in varying degrees”, the report significantly suggests that it should be considered a crime punishable under the IPC.
It emphasizes: “A handicap in dealing with various forms of social strife is the nonexistence of a unified set of laws. At present, the laws to deal with communal incidences, caste agitations, and other forms of violent demonstrations are covered under various sections of the Indian Penal Code (IPC).”
Seeking a “single and cohesive set of laws will help define the incidents and fix accountability at multiple levels, including the police”, the report says, “Most labour problems are a result of disputes over wages, working conditions or union representation.”
Calling India’s labour laws as “most stringent and complex in the world, complicating the regulatory environment for businesses”, the report says, “There are close to 44 central labour laws and above 100 state labour laws in the country, most of which are archaic in reference to a globalised economic perspective.”
Especially objecting to laws such as the Payment of Wages Act, 1936 and the Minimum Wages Act, 1948 and the the Industrial Disputes Act of 1947, the report says, the latter particularly “requires prior government permission to lay-off workers or close businesses employing more than 100 people.”
“Due to this”, the report underlines, “Businesses have found ways to circumvent these rules through contract workers, which is another point of conflict in the labour-employer ties.”
Insisting that social unrest is particularly affecting the Indian economy, the report says, “The defining event in this category has been the ongoing Jat agitation, demanding OBC reservation for the community in education and government jobs. The agitation during February 2016 alone caused economic losses worth Rs 34,000 crore.”
“Prior to the Jats, the Patels in Gujarat and Kapus in Andhra Pradesh had raised similar demands. Recent developments show that the issue of reservation is far from over. Along with the reservation agitations and resulting violence, social strife remains the most potent risk to business operations”, the report says.

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