“Labor is prior to and independent of, capital. Capital is only the fruit of labour, and could never have existed if labour had not first existed. Labor is the superior of capital, and deserves much higher consideration”.
Abraham Lincoln


India is considered as the most sensitive and protective country regarding the protection of rights of its labors. Constitution of India itself provides that protecting rights of laborers is the prime duty of state and center combined and hence inserted in the concurrent list which needs central approval ultimately. India is also a pioneer signatory of the International Labor organization convention, ratified around a hundred years back. But recently amid Corona virus-induced lockdown many states like- Uttar Pradesh, Madhya Pradesh, Rajasthan, and Gujarat came with extensive change in labor laws some by way of the ordinance while others by executive manner.

Key highlights of Reform

▪️ Dysfunction of laws related to dispute settlement, occupational safety, basic health, and working conditions of workers.
▪️ Annulment of laws of Trade unions, contract workers, Migrants, etc… however laws related to bonded labor, deployment of women and children haven’t nullified.
▪️ Some States proposed increment of working hours from 8 to 12 hours as overtime as per the will of employees.
▪️ The provisions of “Right of workers” which include health and sanitation, better working environment, availability of safe drinking water, ventilation, creches, holidays and rest intervals, first aid kit etc….has been abated.
▪️ Factory registration now will be done in a day and renewals of registration per year are not necessary.
▪️ Industries will be totally exempted from any kind of vigilance and monitoring activities.

Major Issues

The official justification for such action is that “To encourage investment and employment”. It will stimulate the ease of doing business and investment in the industrial sector and hence boost the economy at large in such stressful situations. No doubt that recent worldwide lockdown has brought the worst phase in world economy in fact, worst than the great depression of 1929. The most horrible thing is that its repercussions are indomitable.
But the question here is that is such labor reform an appropriate action to re-rail the after-lockdown Indian economy ???


As suggested by many veteran Economist that “Industrial slowdown is largely due to a slump in demand”. So, demand increment is the requisite condition for economic and industrial development, not labor reform as it has nothing to do with it.

▪️ Besides, failing in its prime objective it will also increase exploitation of laborers by violating their fundamental right and human right at large.
▪️ In the wake of the COVID -19 outbreak the most affected section of the society are millions of poor, marginalized, and unemployed migrant workers, and their migration, job security, livelihood, and retrenchment will be the biggest challenge of India after Corona.
▪️ This kind of “More give and Less take” reform will lower the income of workers as, employees were allowed to keep workers in service at their convenience, which will lower the demand also and hence no industrial boost at large.


Being a democratic country it is a constitutional as well as the ethical obligation of the state to prioritize its reform process in favor of needy and marginalized during such harshest situation. It should be the need of the hour to protect rights and means of livelihood of those who are going to be the most vulnerable and affected by the hit of the outbreak.

It is interesting that while India is busy in suspending labor laws many European countries are trying to minimize the outcome by providing subsidies to workers and the poor. Allowing more intensive exploitation of workers is unlikely to open gates of investment. It will only bring stress and unrest in the society because it is putting a clear-cut stamp over-exploitation of workers, infringement of their rights ( human as well as fundamental), and putting their liberty, dignity and security in danger.

Way Forward

Some measures that can work as an analgesic in such dismaying situation are –
▪️ Introducing new factory reform by abolishing archaic policies, providing better security and protection to workers and laborers.
▪️ Providing Universal Basic Income supplemented by subsidy to control hunger and homelessness.
▪️ Ensuring basic amenities like health and sanitation etc…to ensure slow but effective industrial development in the country.
▪️ Focusing more on policy and institutional reform instead of labor reform will definitely buttress investment opportunities.

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