Modi’s Labour Reform

Sarajit Majumdar

Prime Minister Narendra Modi is hastening reforms for industrial growth that he promised industrialists during his recent Lok Sabha election campaign. He has introduced labour reform as he launched Pandit Din Dayal Upadhyay "Shramev Jayate" scheme. While launching the scheme Modi eulogised the value of labour and advised people to regard those who are toiling in industries as "shram yogis". He also maintained that while formulating labour policy, one should look at it from the point of view of workers and not industries. Media, especially electronic media, went abuzz with the declaration of the policies, as the "end of inspector raj".

The main features of "Shramev Jayate" introduced by Modi are specific policy issues such as introduction of "Shram Subidha" portal, portability of Employees' Provident Fund (EPF) through the Universal Account Number (UAN) assigned to the workers in organised sector  and Rashtriya Swastha Bima Yojna (National Health Insurance Scheme) for the workers in unorganised sectors.

Of these Rashtriya Swastha Bima Yojna is not a new idea. West Bengal government introduced the same plan through the Employees Sate Insurance Scheme quite some time back. And the portability of EPF payment facility is only an administrative facility extended to the workers across the country. It does not accrue any material benefit to the workers. It only saves the workers from administrative hassles of creating new EPF account in case they switch job, which is so rare though.

The crux of the reform lies in the introduction of "Shram Subidha" portal. This dedicated portal will control and regulate factory inspection procedure. Six lakhs manufacturing units—large, medium and small—will file online information regarding their compliance of 16 of the 44 labour laws in the country. This they can do by filling out one single form online and they will have the right to self certify their online data.

Modi acknowledges that the portal is aimed at improving business environment, by minimising inspector's bribe/rent seeking visits, which is a potential threat to the owners of manufacturing units. He hopes, the removal of inspection threat will clear the way for expansion of investment, foreign or domestic, to make his slogan "Make in India" a success.

But India cannot do away with factory inspection, since the country is committed to ILO's requirement of periodic factory inspection. Factory inspection is aimed at verifying safe working conditions and other legal commitments to workers. Yet to go back on this commitment Modi government is indirectly dodging it by minimising the role of factory inspectors. "Shram Subidha" allows inspection of only those units, whose names will appear in the system generated random list. Inspectors' human discretion to visit a factory is totally done away with.

It seems this "Shramev Jayate" schemes are aimless shots in the air. As such frequency of factory inspection in India is declining. K R Sundar in an Economic and Political Weekly (Oct 18, 2014) commentary shows that factory inspection has come down from 63 percent in 1986 to 18 percent in 2007. Also the number of fatal injuries, per lakh of working days in a year, due to accidents in factories has increased between 1980 and 2008 due to lack of inspection. Besides, Indian labour law does not apply to workers in Special Economic Zones. Therefore, "inspector raj" is already on the decline for some time. Also in the IT and ITeS sector there is no inspection, though labour exploitation is too high to evade inspection. The IT sectors are ridden with different problems. Employees there are not sure if they are workers or managers. They don't even know their rights and duties either. What about other sectors?

True, factory inspectors do harass the manufacturing units for bribe on the pretext of violation of labour law. But can the country really do without factory inspectors? Some facts do justify intensive factory inspection.

Experience with sponge iron and ferroalloy factories in West Bengal and Chattisgarh deserve attention. These small or medium scale factories are spreading air pollution both inside and outside the factories. Moreover, working conditions therein are extremely oppressive. Carbon dioxide and carbon monoxide emission is severe in these units. Workers work near the furnace without the protective gears and get polluted with emission. In 2004 two workers, who were sleeping at the back of a furnace in a ferroalloy factory in Raniganj area, were suffocated to death following carbon monoxide poisoning. But the unit is still functioning the same way. The workers therein handle molten metals with simple iron ladles without gloves. Wage rates are also very poor. Sponge iron firms, which emit carbon dioxide, are equally culpable. None of these factories installed pollution control device owing to prohibitive cost, as the owners say. Don't these facts attract inspection, albeit by honest ones?

Moreover, small and medium firms are constrained to go online, lacking interest in modern information technology and expertise. Even if they did go online, would sponge iron and ferroalloy factories furnish data on poor environment and labour standard therein? It is an emphatic no. The state administration reportedly not very long ago fined the erring firms lakhs of rupees. They paid the fine, but ran their business without installing pollution control devices exposing the workers to high risk of health hazards inside the factories, leave alone air pollution outside.

Large industrial units may furnish online information on compliance of labour law, as they are technology savvy. Even then could one trust their voluntary information, despite self certification? Did people know before the Bhopal Gas tragedy what Union Carbide was doing inside its laboratory? Had the inspection been done carbide victims might know the risk involved in the research with methyl isocyanides that leaked one night and wreaked havoc in Bhopal. One also did not know much about dehumanising working conditions in Maruti's Manesar plant until the labour trouble broke out. All this happened despite the existence of the "inspector raj". Such being the human experience despite inspection of factories, what do ordinary people gain by officially allowing the firms to get away with misinformation or disinforma-tion, facilitated by self certified online data? Certainly Modi is not really looking at labour policy from the point of view of workers. Instead he is seeking to be more lenient on industrialists. His head is filled more with growth phenomenon than working conditions in factories, though he pretends to favour "shram yogis".

Frontier
Vol. 47, No. 23, Dec 14 - 20, 2014