Labour Regulations Need to Be Eased to Improve Generation of Jobs: Economic Survey

The economic survey called for easing of labour regulations in the country to boost generation of jobs. Chief Economic Advisor (CEA) V Anantha Nageswaran noted in the economic survey that several regulations in the country are still stringent compared to developed economies.

Talking about labour regulations in the country, the survey said that it has adverse consequences on workforce. "Current labour regulations have unintended adverse repercussions for both the general workforce and women specifically," it said.

Highlighting an example of stringent regulations, the survey pointed out the difference between overtime premium rates across the world. As per the data quoted in the document, India's overtime premium rates stood at 100 per cent which is significantly higher than the rates in United States (50 per cent) , France (25 per cent) and Germany (0 per cent).

The economic survey said strict labour regulations across several states impedes employment opportunities for women. It noted, "The 10 most populous states collectively impose 139 prohibitions on women from participating in factory processes such as electroplating, petroleum generation, manufacturing of products such as pesticides, glass, rechargeable batteries etc."

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Another hurdle highlighted by the CEA in the report is the working hours limit. As per the Economic Survey, India does not provide flexibility in organising working hours. "Many countries offer more flexibility in organising work hours and allow for more overtime compared to India. This is limiting the monetisable time for Indian workers and affecting their families and the country’s prosperity," the report noted.

While China, Denmark, Indonesia, Norway and South Korea don't have any regulated limit, India puts the cap at 10.5 hours.

To streamline labour regulations in the country, the government introduced four labour codes in 2019 and 2020 which amalgamated 29 central laws. However, the economic survey highlighted that several states have still not adopted the labour codes.

The survey said, "The new Labour Codes marginally improve some of the observations above. In some cases, limits have been moved from the Law to Rules to be made by states. However, the Codes are yet to be fully operationalised and many states are found to be reintroducing the older restrictions under the new laws."