Cabinet Okays Exit Option For Industry

The Union Cabinet Friday approved the amendments to the Industrial Disputes Act 1947 which would allow companies employing up to 1,000 workers to close down or retrench staff without seeking prior government permission. This has paved the way for finance minister Yashwant Sinha to announce labour reforms on February 28.

Under the existing Chapter 5B of the IDA, industrial establishments employing 100 or more workers are required to obtain prior approval from the government for effecting lay-off, retrenchment or closure. The 2001-02 Budget had sought to liberalise this provision by making it applicable only to units employing 1,000 or more workers.

After the Cabinet meeting, a government spokesperson said, "The cabinet has approved the introduction of the amendment to the Industrial Disputes Act 1947 in the Budget session of Parliament.