India committed to labour reforms without compromising working class, says Labour Minister Bandaru Dattatreya

Union Labour Minister Bandaru Dattatreya has said that the NDA Government is committed to labour reforms, but these reforms will not be initiated or introduced at the expense of the interests of the nation's working class.

India's outdated labour laws strictly limit hiring and firing, while an onerous 'inspector raj' deluges employers with paperwork, discouraging them from expanding and adding staff.

"The government led by Narendra Modi is committed to labour reforms but not at the cost of working class," said Dattatreya at a meeting with major trade unions here.

Just eight percent of Indian workers have formal jobs with any security and benefits, such as provident Ffnd, while the vast majority work in the informal sector, experts say.

The change would benefit chiefly firms that employ just a few people. In 2009, 84 percent of India's manufacturing workers were employed by firms with fewer than 50 staff, research by the Asian Development Bank shows.

"Our aim is national interest. We are not at all narrow-minded. We don't want to bulldoze anybody. Our interest is national interest. We are looking forward and we are not looking backward," Dattatreya added.

Even though the World Bank says India has one of the world's most rigid labour markets, fears of a trade union backlash and partisan politics have deterred governments from reform.

Business leaders have high hopes for Prime Minister Narendra Modi, an advocate of smaller government and private enterprise, to change that.