Cosmetic Surgery

interests of existing workers are protected at the expense of potential workers. Competition requires free entry and free exit. The Industrial Disputes Act prevents free exit, not only for labour, but also for management and ownership.

The more important issue is an exit policy for companies. An exit policy for labour is a secondary issue. Within the Ramanujam Committee, representatives of employers and employees failed to agree on this diagnosis and the present bipartite panel has also avoided the issue. With labour on the concurrent list, this means that the responsibility for making labour markets more flexible will devolve on states and this has already begun to happen in Kerala, Tamil Nadu and Rajasthan.

 

In contrast to industrial relations, the bipartite panel managed to hammer out some consensus on trade unions. The major problems here relate to multiplicity, registration, inter-union rivalries and involvement of outsiders. In modified form, the bipartite panel has accepted the committee's recommendations on registration. But it is by no means obvious that unregistered unions will not have industrial relations rights. There is nothing significant on inter-union disputes (referral to the national trade union centre or an independent authority) or involvement of outsiders (there is a list of non-employees who can be members) either. Multiplicity cannot be reduced unless one accepts minimum criteria for recognition and on this, as is to be expected, consensus has eluded the panel. The bipartite panel's recommendations are thus nothing more than cosmetic.

Stated differently, if one expects labour market reform, one will increasingly have to look to states. The Centre's role is at best limited. For example, Andhra Pradesh, Orissa, West Bengal and Kerala have introduced secret ballots for trade union recognition. Maharashtra has a code on inter-union rivalry. In 1994, West Bengal cancelled the registration of several unions for non-submission of returns. As states begin to compete for investments, they will realise that fiscal incentives without flexible labour markets and infrastructure will not suffice. Such competition is healthy and is the only way of bringing about labour market reform.