Rajasthan News

Rajasthan has implemented key labour reforms

by RajasthanDirect
Feb 03, 2015

Rajasthan has implemented key labour reforms. The chief minister of Rajasthan ‘Vasundhara Raje Scindia’ who won the state election a year ago, plans to generate 1.5, million jobs by 2018. She told reporters last year that the changes would create a habitat for job creation

Last November it became the first state to alter the archaic laws that have led more than 98 per cent of businesses to deliberately avoid expanding beyond nine employees. Small entrepreneurs say the rigid regulations which subject factories to arbitrary inspections and allegedly favour trade unions make it nearly impossible to fire workers or close a business..

Under the reforms, companies in Rajasthan can lay off up to 300 workers without government permission, up from the 100-employee threshold. Trade union representation can be introduced only with at least 30 percent of a company’s workers, up from 15 percent. And a strict factories law will now apply only to sites that employ 20 or more workers, instead of the previous 10.

“These laws were a big pain for the industry. Small businesses were saddled with the heavy burden of compliance and reporting and multiple inspections. A big disincentive to hire more, said Chandrajit Banerjee, director general of the Confederation of Indian Industry. “Existing businesses will not hesitate to scale up. New labour-intensive investments will also come, which would be very critical.

The changes in Rajasthan have been supported by Prime Minister Narendra Modi, who has promised to turn Asia’s third-largest economy into a China-style hub for global manufacturing. But the changes have been criticised by labour unions, which argue that these erode workers’ rights.

“Industrial development is the need of the hour, but at what cost? Ritesh Sharma, a labour rights lawyer, told the Washington Post.

News Src:- http://www.allgov.com/india/news/top-stories/rajasthan-sets-the-pace-on-labour-reforms-150202?news=855551

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