State govt mulls amendments in labour laws for Make in Maharashtra

To reduce cumbersome procedures and overcome the Achilles heel in the state's ease of doing business, the state government is planning to cut down on inspector raj by improving labour laws. The labour reforms — which is the fulcrum for the Devendra Fadnavis' government's Make in Maharashtra initiative to boost investment and employment creation in the state — will also see online compliances being introduced.

A recent assessment of the implementation of business reforms by the states — conducted by the Centre's Department of Industrial Policy and Promotion (DIPP) — rated Maharashtra at No. 8, below states like Jharkhand, Chhattisgarh, Rajasthan and Madhya Pradesh, largely due to poor reforms in the labour sector. The World Bank and KPMG were associated with the survey. This new initiative by the Maharashtra government is aimed at overcoming these hurdles and attracting greater investment through a better regulatory environment. India ranks 142 out of 189 economies in the World Bank's Doing Business 2015 report — the second worst-performing economy in South Asia.

However, the workers' unions are angry at the move, pointing out that these laws were the culmination of working class struggles and were not doles from the government. Labour minister Prakash Mehta said the state would soon establish a committee of stakeholders like labour leaders, representatives of industries and public representatives, to review laws related to different classes of workers like mathadis (head-load workers), security guards and industrial, powerloom, construction, unorganized sector and domestic workers. It will also look into various labour and industrial dispute legislations and suggest changes.

The government has also set up a committee under labour commissioner HK Jawale to suggest amendments. These templates will be placed before the stakeholders committee. "These laws are old...need to be brought in sync with the time," explained Mehta. He added that they had reduced the number of permissions required from around 80 to 30 at present, and had also made some available through online platforms. "We are planning to give out all these compliances online," said Mehta, adding that this would result in industries and establishments getting them fast compared to the time-consuming procedures earlier.

These services will also be covered under the sunshine Maharashtra Right to Public Services Act, 2015. However, Ashok Dhawale — member of the CPI-M's central secretariat — said these proposed changes were meant to "increase the profit margins of the capitalists against the interest of the workers". "The thrust of the labour reforms is to usher in a hire-and-fire system prevalent in the west," said Dhawale, adding that stronger labour laws would benefit the workers, increase their disposable income and boost domestic demand and the economy. "We have made significant amendments to labour laws. For instance, some licenses like those under the shop and establishment acts are to be given in seven days, failing which they are deemed to have been granted. We have also amended the Factories Act, 1948, to allow women to work in night shifts. The criteria for factories and units bound by this legislation has also been relaxed and mandatory clearances for units to allow workers to work overtime have been done away with… shops will also be allowed to stay open all 365 days," said a senior labour department official. "We are working on a process to bring licensing and compliances on the online platform," he added, stating that it was likely to be kicked off in another two months.

"Of the 285 objective-type questions relating to procedural reforms in the DIPP assessment, around 80 are pertained to labour. Of the 130 questions which had to be answered in negative by the state, around 60 are pertained to labour. These questions were about systems being taken online and lack of this by the labour department led to a series of questions being marked in the negative," explained a senior industries department official.
The state government has brought down the number of permissions required for industries to 37 from 76 and has committed to lower it to a further 25 for a better regulatory environment. The official said for this, the labour and energy department needed to prune the list of permissions needed from their end.

Since January 2015, the state government has received 18 FDI proposals from industrial groups from across the globe. This proposed investment worth Rs 59,107 crore has the potential to create 1,23,340 jobs. This includes Taiwanese contract manufacturer Foxconn, Coca Cola, Schindler and ThyssenKrupp. It plans to eventually attract investments worth Rs 5 lakh crore which would give employment to 10 lakh people.