Modi rolls out labour reforms

Prime Minister combines pro-worker promises with industry-friendly changes

October 16, 2014 02:19 pm | Updated November 16, 2021 07:36 pm IST - New Delhi

Prime Minister Narendra Modi on Thursday unveiled new measures for the youth, workers and employers to improve ease of business for enterprises while expanding government support to impart skill training for workers. Mr. Modi launched the Universal Account Number scheme (UAN) for all Provident Fund contributors which will allow portability of PF benefits and online tracking of PF benefits.

Inaugurating the Deen Dayal Upadhyaya Shramev Jayate Karyakram organised by the Ministry of labour and Employment (MoLE), Mr. Modi said the aim of the program was to emphasise the dignity of labour, especially that performed by blue-collared workers referring to them as “shram yogi”. To support the graduates from Industrial Training Institutes (ITIs) across the country, who undergo vocational training after completing class X, the government will reimburse 50 percent of the stipend paid to apprentices during first two years of their training.

“ITIs are shishu mandir of technical education. Those who may have knowledge other than that of books, that of skills, must be respected. The talented among the ITI graduates msut get new opportunities,” said Mr. Modi. There are 2.82 lakh apprentices undergoing training against 4.9 lakh seats. The program will aim to increase this to 24 lakhs apprentices, he said. The government in August had passed the Apprentices (Amendment) Bill 2014 in the Lok Sabha to amend the 1961 Act to freshly regulate the conditions of work of apprentices in a wider number of trades.

UAN scheme

Mr. Modi launched the UAN for PF contributors. “More than Rs 27,000 crores is lying unclaimed in PF accounts. If mobile phones work for those traveling inter-state, or across countries, why can PF accounts not work,” he said.

The PM launched an online portal that will allow employers to file returns online for compliance with 16 labour laws and a system under which lots drawn by computers will be used to conduct inspections. He announced that to end the Inspector Raj which was still continuing, the government had decided to bring in a system based on “responsibility and trust.”

“If a person driving can take care of own safety, why do we expect that person as an industrial employer will not take care of own and his or her workers as well own safety by maintenance of boilers, machinery etc.” said Mr Modi. “Ease of business is the greatest requirement for India's success. Ease of business will be a priority under Make in India. Labour's problems from labour's point of view too. Shram yogis will be rashtra yogis,” he said.

Applicability and timeline

With the MoLE introducing the schemes, they will at present apply only to employees and workers under central agencies and autonomous bodies. Since labour is a concurrent subject, these will apply in States only after they make similar changes to their rules and laws. Twenty States' representatives attended a consultation after the launch.

“Right now, the changes will be piloted in central agencies, PSUs while the discussion goes on with states. Haryana, Karnataka, Gujarat, Bihar expressed interest in shifting to a similar system and we expect changes in this financial year,” said a senior MoLE official. “A Central Analysis and Intelligence Unit will be set up to analyse data to decide which units to inspect. Labour department staff will need to be trained in new skills for use of computers. States' staff will have to do the same,” he added.

UAN for all 4.17 crore PF users are already prepared.

Lack of strength in Labour depts

Labour officials in States had a varied response. Several cited that labour departments were already functioning with minuscule strength, making it impossible to carry out inspections.

“There are 25 labour inspectors in all of Delhi State and over 1,000 units under each inspector. I do not even know how many units there are in my area, as 90 percent do not file returns. It is physically impossible to inspect each every year even if one tried,” said one district-level labour official. “Self certification may decrease arbitrary inspections and harassment by inspectors as well as false complaints made by unions and workers. But they may also lead to industries certifying without complying,” he said.

A Haryana government labour official said that in his district, 11 labour inspectors were responsible for inspecting over 1200 units. “Haryana already has a system based on self certification. Sometimes units themselves prefer our inspections as they can show it to their buyers, such as in large garment units,” he said.

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