Make labour reforms a state subject, Modi tells Centre

Gujarat Chief Minister Narendra Modi has demanded that labour reforms should be made a state subject to augment employment generation.

In an exclusive interview to Business Standard, Modi said, "We have officially communicated to the Centre that fast-growing states like Gujarat should be allowed to undertake labour reforms as per our requirement ".

"The ground realities are different in Gujarat and should not be compared to, say, West Bengal," Modi said while explaining the rationale behind his demand.

Over the past few years, Gujarat has witnessed rapid growth of labour intensive industries such as textiles, apparels, gems and jewllery as well as information technology.

Taking all these aspects into consideration, the Centre should allow states such as Gujarat to formulate labour laws as per their requirement, Modi added.

The state has not been able to enforce Industrial Park Act as the Centre has not given a go-ahead due to certain provisions pertaining to labour laws. An official note written to Centre by the state government states, "The Government of Gujarat initiated an exercise for formulating two acts, viz, "Special Economic Zone Act" and the "Industrial Park Act.

These two proposed ordinances, along with provisions for labour laws, by amending the Industrial Disputes Act, were submitted to the Government of India for Presidential Assent. Special Economic Zones Act along with the amendment to the Industrial Disputes Act for the benefit of Special Economic Zones was approved by the Government of India. However, the Government of India did not agree to incorporate the labour law reforms in Industrial Park Ordinance."

With prime focus of the upcoming investors' summit in 2009 and new industrial policy being employment generation, the state government is focusing more on labour law reforms.

This becomes even more significant as the new industrial policy envisages sector specific focus. "Apparel, electronics and gems and jewellery industries are labour intensive and the cost of production of these products manufactured by these sectors are strongly dictated by cost of labour in terms of its productivity, utility etc.

With the increase in the market for apparels internationally and trend for sourcing such products from countries such as India, creation of enabling labour reform provisions which would benefit the labour force and also industrial establishments should be seriously explored by the government of India," says the letter.

On the other hand, the Centre has insisted that the proposal should be resubmitted after consensus is reached in the discussion to be held with all central trade unions active in Gujarat.