Condition of Labour Force under Modi Govt.

Special Election Issue

Like all the other sectors, Modi’s “pro-corporate” and “anti-people” labour policies have forced the working class of India to embark on more than 18 country-wide general and sectoral strikes since the BJP came to power in 2014. Soon after coming into power, Modi government dedicates itself to work for achieving high rating in World Bank’s “Ease of Doing Business” and thereby loosened the labour laws so that they could not create any hindrance for the big corporates in looting the huge labour from the country. As a result the minimum rights gained by the working class through relentless struggles was sought to be dismantled.

In August 2014, the Vasundhara Raje-led Rajasthan state cabinet amended four labour laws—the Industrial Disputes Act, 1947, the Factories Act, 1948, the Contract Labour (Regulation and Abolition) Act, 1970 and the Apprentices Act, 1961. The first amendment of the Industrial Disputes Act allowed industry to lay off 300 employees (which was 100 previously) without prior government permission. Data shows 86% of industries employ less than 300 workers and will now be free to exploit workers using this provision. The modifications also make it tougher to register labour unions — instead of 15% of workers, now 30% of workers in a factory need to join hands to form a union. The Contract Labour Act was revised to led the principal employer employ 49 contract worker without a license. According to the Business Standard, “The amendments in the Factories Act propose to increase the threshold limit of employment for factories operating without power from 20 to 40 and from 10 to 20 for factories operating with power. Complaints against the employer about violation of this Act would not receive cognizance by a court without prior written permission from the state government. A provision for compounding of offences has been added.”Rajasthan paved the way for other states such as Haryana, Madhya Pradesh, Maharashtra and Uttar Pradesh, to introduce similar amendments which diluted the rights of workers and relaxed rules for employers.

In 2015, the reforms in Gujrat Labour law provided the scope of out of court settlement of disputes between workers and management. This change ensured that the workers will be alienated from their basic right to reach the court of law. In the same year, the Madhya Pradesh government followed the same footprints of labour exploitation and made reforms in existing law. In 2017, the Contract Labour Maharashtra (Amendment) Act mentioned – “Large number of small and medium-scale establishments will be out of the purview of the Act. Larger establishments will also employ four to five sets of 40 contract workers to avoid coming under this law. This means employers will avoid providing statutory benefits, including provident fund, the minimum wage and leave to contract workers in smaller units.”  The year 2016 witnessed 180 million Indian workers who went on strike against the government’s economic reforms. A 12-point charter of demands was put by Centre Trade Unions against stringent labour laws, disinvestments in central and state-owned enterprises and opening up sectors ranging from railways to insurance and defence to foreign direct investments (FDI).

Modi’s Bharatiya Janata Party (BJP) had promised to create nearly 10 million jobs every year. Despite these tall claims, the employment scenario in the country is so dismal. In 2017, two crore people were looking for jobs, whereas only 20 lakh jobs were created. Pakoda vending is being peddled as job creation. In the background of severe economic crisis featured by massive sickness and closure of industries, resulting huge job losses, no concrete measures are seen in the budget proposals in recent years for boosting quality employment across the sectors. The government fails to ensure Rs. 18,000 as a floor minimum wage as accepted by them in the 7th Central Pay Commission recommendation. The 2018 budget further reiterated its ongoing exercise for privatization of the public sector units which would further aggravate the already prevailing inequality. In the BJP government’s Budget Statement 2018-19, it claims that the BJP government created 70 lakh jobs in the organised sector. This is based on provident fund data which does not tell us about the continuity of employment, or even on continuity of PF payments by employers. In contrast the same study also confirms that only 5 lakh workers were newly registered under Employment State Insurance. In current times, the leaked report of National Sample Survey Office’s (NSSO’s) Periodic Labor Force Survey (PLFS) states that unemployment is at an all-time high in the last 45 years.

In such a situation, Modi government has expedite the process of fixed term employment (FTE) “for ease of doing business”. Under FTP, employers get the right to hire workers for specific projects that are seasonal in nature. No doubt this will further encourage contractualization and it goes against the spirit of the existing Contract Labour (Regulation & Abolition) Act. An activist commented  “Fixed term employment will lead to further pressure on the economy as jobs will be precarious, incomes and purchasing power will drop leading to the economic slowdown and a dip in manufacturing.”

The Code on Wages Bill, which was introduced in the Lok Sabha in August 2017, amalgamated four labour laws. It promoted deduction of wages based on reasons ranging from performance to participating in strikes, and allowed employers to alter hours that constitute a normal working day. The bill’s definition of overtime was also a point of contention, as was a provision stating that “audited accounts of companies shall not normally be questioned.” There exist separate definitions of “employees” and “workers” in the bill, which could give employers leeway to discriminate against either of the categories. One of the main points of contention in the bill was that it allowed government to use an arbitrary process to fix minimum wage. For long, trade unions have demanded that the national minimum wage be fixed in accordance with the formula that the 15th ILC declared in 1957. This formula considered factors such as minimum food requirement, clothing, rent for housing, as well as expenditure for fuel and lighting, among others. There were attempts to combine 15 laws related to social security and welfare, including the Employee Provident Fund, or EPF, maternity benefit and pensions.

The government has undertaken to contribute the employers’ share (12% of annual income) of Employees’ Provident Fund (EPF) for every new worker for three years. It significantly reduces the payroll cost for companies to expand their workforce. The proposal to pay the employer’s contribution of EPF for all new workers will amount to a significant transfer of wealth from taxpayers to corporates. Given that the support is only for the first three years, it is unclear if the jobs will remain viable when the subsidy is repealed.

The government has also reduced women employees’ contribution to EPF from 12% to 8% in order to increase their take-home pay. It’s also important to note the 4% reduction of women workers’ contribution to EPF is not being compensated. This effectively decreases long-term savings to improve ‘take home’ wage. This also undermines the retirement benefits of women workers’ increasing their dependence on men in their old age. Higher ‘take home pay’ could even encourage employers to lower women wages. Further, the draft code (mentioned earlier) introduced by the government also had detailed clauses regarding maternity benefits for women workers. It said, “[Employer] is also bound not to employ pregnant woman in arduous work, provide nursing break to woman, provide paid leave for (extended) period in case of illness arising out of confinement.” This is being introduced despite the Economic Survey’s admission that India has amongst the lowest women’s participation rates in the workforce and some of the widest pay disparity between men and women workers.

In 2019, a big ticket announcement in the Interim Budget has been Pradhan Mantri Shram-Yogi Maandhan – a voluntary pension scheme for unorganized workers. A monthly contribution of Rs 100 for those who join the scheme at the age of 29 and Rs 55 for those joining at 18 will be matched by the government and the total sum added to their pension account. This seems to be a variation of the Atal Pension Yojana launched by NDA in 2015 which has failed miserably till now. No clarity has been provided on what is the minimum period of contribution to receive the pension; nor has anything been mentioned regarding what happens if there is break in contribution to the pension fund – a situation which is extremely likely for workers in the unorganized sector considering unavailability of regular employment. Data shows that after working lifelong in construction sites, quarries, factories, etc. doing manual labor, the life expectancy goes down significantly below the national average of 68.8 years. This would result in the pension fund accumulating huge sums of money like that of Employees Provident Fund Organization which would provide easy capital to corporates in the equity markets. This hard earned money would eventually be unclaimed by the workers but would be a win-win situation for corporations through the back door.

The labour reform and policies of the government institutionalize the plunder of the poorest to make the richest richer. Further, the government has adopted divisive communal and casteist conspiracies against the democratic struggles of the working class. But the participation of working class of all sectors in the two day strike in January, 2019 sends a powerful rebuff to the pro imperialist anti worker policies of the Modi Govt. and its attacks on working class rights.

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