Labour reforms to put India among top 10 in ease of doing biz: Report

Under the labour reforms, the Centre plans to subsume 44 central laws into four broad codes on wages; industrial relations; OSH and social security

The government aims to catapult India to among the top 10 countries in World Bank's ease of doing business rankings with the comprehensive labour reforms which are likely to be completed after Parliament approves three draft codes in the ongoing session, a senior official said on Tuesday.

Under the labour reforms, the Centre plans to subsume 44 central laws into four broad codes on wages; industrial relations; occupational safety, health and working conditions (OSH) and social security.

The Wage Code Bill 2019 was passed by Parliament last year, while the other three codes were introduced in the Lok Sabha on Saturday. These bill are listed for consideration and passage in the Lower House on Tuesday.

"The ultimate goal of the government is to see India figure in top 10 nations in ease of doing business index of World Bank with completion of long-pending labour reforms," a senior labour ministry official told PTI.

As per the 'Doing Business' 2020 report, India had jumped 14 places to the 63rd position in the ease of doing business rankings. India has improved its rank by 79 positions in five years (2014-19).

"Labour laws would act as catalyst after the reform process is completed with passage of remaining three codes in Parliament during the ongoing session. They would be help in attracting investments and generate employment in the country," the official added.

"At present, it is cumbersome to be an entrepreneur due to this vicious web of labour laws which make compliance practically difficult. It is easy to seek employment rather doing own business and becoming a job creator," the official noted.

The codes provide for 'one labour return, one licence and one registration' to smoothen compliance.

At present, an entrepreneur has to maintain eight registrations and four licences to run a business under the existing labour laws. Besides, they have to file eight labour returns, including to the EPFO, ESIC and Chief Labour Commissioner.

The government is also contemplating to digitise the entire process of labour law compliance, which will ease the process for entrepreneurs.

Under these codes, the maximum punishment for offences has been reduced to three years from seven years earlier.

Besides, the workers would benefit by getting 50 per cent of penalty imposed by courts on employers. That would be in addition to the compensation awarded by the court to them.

Employees who meet with an accident or get injured while going to or coming from the workplace would also get compensation. At present, only workers who get injured during duty hours at the workplace are eligible to seek compensation.

The OSH Code also provides for full-fledged survey for migrant workers for which the Centre would have to source data from various agencies and states.

Once the code is approved, the survey would have force of law and no state/agency/organisation would be able to deny data sharing.

The Code on Social Security proposes to set up a social security fund for gig and platform workers.

There are around 50 crore workers in the country, including 10 crore who are employed in the organised sector.

The codes also provide for issue of appointment letters to workers, digitising payment of wages and their free annual medical checkup.

The official said these laws are "game-changing" and a win-win situation for employers, employees and the government with business growth, more jobs and timely compliance of labour laws.

The government is taking many initiatives to improve ease of doing business in the country but at the same time ensuring that workers' rights are not compromised, the official added.