Our Advisory Board member, Manish Sabharwal writes about the recent trade union strike that disrupted life in various parts of India. He says "The issues cited for the national trade union strike confirmed the suspicion that trade unions are a geriatric ward run by old people, for old people and by old people...Labour unions must recognize that a voice does not equal a veto, they represent less than 10% of India’s workers, and job preservation is not a form of job creation".
He goes on to say that "Labour reform hardly equals hire and fire; the recent draft labour code on wages that consolidates four labour laws into one is a great document that not only clarifies many issues which currently breed litigation and inspector corruption, but hands over minimum wage setting to state governments after years of back-seat driving by the central government. This devolution is important; trade unions must recognize that decentralization is not a passing shower, but climate change....
A high impact central reform would be giving all non-hazardous enterprises an option to comply under the Factories Act or Shops and Establishments Act....Job creation depends on many things, but could the divergent destiny of employment in services and manufacturing have been influenced by the higher responsiveness of states? Action must shift to states because there is no such thing as India’s labour market; per capita incomes vary 10 times between our richest and poorest states (the same number is four for China, three for the euro zone and two for the US)....The Trade Union Act can be amended to make them representative; the politicization of trade unions and the criminalization of politics is a toxic combination...Delhi has too much power in labour markets; devolution is crucial for Make in India.".
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