His cheeks are sunken and his neck is in a brace. But age has not blunted the thinking of a man reputed to be one of Jaipur's shrewdest businessmen.
When asked whether the amendments in labour law would help industry, he chose to speak elliptically, offering the example of his own carpet-making unit.
There was a time when it housed 80 looms in an industrial shed, he said, where workers put in eight-hour shifts. He was constantly harassed by labour inspectors, who threatened to prosecute him, and for good reason: many of his workers were children.
“Only tender fingers can tie the knots,” he said, by way of explanation. A carpet has “a hundred knots per square inch”.
While the inspectors could be “managed with bribes”, soon the foreigners who bought his carpets began to ask uncomfortable questions.
So what did he do?
He gave the looms to his workers, who took them home. Now they weave carpets at home and bring them to the factory for the final round of finishing. Earlier, he paid them daily wages. Now he pays them a piece rate. According to him, the workers are pleased with the arrangement because they can use the additional labour of their families to produce more carpets.
It’s not just the carpet industry. Most other industries have found ways to get around current labour regulations, he said. In the process, they discovered better business models. For instance, hiring contract workers not only minimised the interface with the government and brought flexibility, it also reduced costs. Why would they turn back the wheel and go back to hiring permanent workers, he asked. His view was unequivocal: the recent change in the state’s labour laws would have nominal impact at best.
A signal to industry
The old industrialist might not be off the mark. As this story sought to explain, by any measurable yardstick, Rajasthan labour law amendments appear to achieve little on the ground.
It isn’t that the government is unaware of this. A government official admitted that changes in the labour laws cannot compensate for the lack of good infrastructure for industry.
This begs the question: Why then did the government push ahead with the legal changes?
“We want to give a message to industry that we are here to support you,” he explained. The amendments might not be transformational in terms of direct impact on industry and employment, he said, but could have an indirect impact on the state’s economy by improving business sentiment.
Shorn of the hoopla, the change in Rajasthan's labour laws boils down to “a signal”.
“By amending the laws," said KL Jain of the Rajasthan Chamber of Commerce and Industry, “the government has signalled that it is interested in the growth of the manufacturing sector and would do anything to promote it. It has shown that it wants to make Rajasthan an industry-friendly state.”
But this is precisely what angers trade unionists.
“If you want to promote industry, give it subsidies,” said Shyam Sunder Sharma of the Bhartiya Mazdoor Sangh. “Why take away the legal rights of workers?”
But as reported earlier in this series, the legal rights of workers were poorly enforced in the past and the amendments merely formalise trends already underway in the industrial landscape: easy retrenchment and widespread contractualisation of labour, among others.
“What was being done covertly will now be done overtly,” said Sharma. In his view, the damaging aspect of the amendments was in the way they had taken away the possibility of redressal for violations that impinge on the welfare of workers.
“The labour laws were among the first legislations of independent India,” said Ravindra Shukla of the Centre of Indian Trade Unions. “By reversing their provisions, you are turning back the clock on worker safety.”
But doesn't the antiquity of the labour laws make it imperative to amend them to keep up with the times?
“The government can by all means review, update and streamline the Factories Act,” said Shukla. “But why change the definition of a factory to exempt thousands of units from any safety regulation?"
The amendments indeed amounted to a signal, he said. “They signal that the balance of power in the state has shifted even further away from labour and towards capital.”
Beyond ideology
There may be another way to look at the question of labour law reforms beyond frozen ideological categories. As Rajasthan’s industrial landscape shows, the regulatory framework is a behemoth that is no longer serving the purposes of either labour or capital. The framework needs to be thought afresh. As Pranab Bardhan, professor at the department of economics, University of California, Berkeley, argued in the Indian Express, “the whole gamut of Indian labour laws requires a major overhaul.” Bardhan calls upon the Indian policy community to “think of imaginative overall reforms that may help both labour and capital.”
This is perhaps the soundest criticism of Rajasthan’s recent labour amendments: they were rushed through without any public consultation or policy deliberations. Chief minister Vasundhara Raje’s cabinet approved the amendments in the first week of June. By the end of July, the assembly passed them through a voice vote, with reportedly less than half the members of the assembly in attendance.
If the rest of the country were to unthinkingly emulate Rajasthan’s example, India might find itself saddled with a new set of laws no better than the old ones.
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When asked whether the amendments in labour law would help industry, he chose to speak elliptically, offering the example of his own carpet-making unit.
There was a time when it housed 80 looms in an industrial shed, he said, where workers put in eight-hour shifts. He was constantly harassed by labour inspectors, who threatened to prosecute him, and for good reason: many of his workers were children.
“Only tender fingers can tie the knots,” he said, by way of explanation. A carpet has “a hundred knots per square inch”.
While the inspectors could be “managed with bribes”, soon the foreigners who bought his carpets began to ask uncomfortable questions.
So what did he do?
He gave the looms to his workers, who took them home. Now they weave carpets at home and bring them to the factory for the final round of finishing. Earlier, he paid them daily wages. Now he pays them a piece rate. According to him, the workers are pleased with the arrangement because they can use the additional labour of their families to produce more carpets.
It’s not just the carpet industry. Most other industries have found ways to get around current labour regulations, he said. In the process, they discovered better business models. For instance, hiring contract workers not only minimised the interface with the government and brought flexibility, it also reduced costs. Why would they turn back the wheel and go back to hiring permanent workers, he asked. His view was unequivocal: the recent change in the state’s labour laws would have nominal impact at best.
A signal to industry
The old industrialist might not be off the mark. As this story sought to explain, by any measurable yardstick, Rajasthan labour law amendments appear to achieve little on the ground.
It isn’t that the government is unaware of this. A government official admitted that changes in the labour laws cannot compensate for the lack of good infrastructure for industry.
This begs the question: Why then did the government push ahead with the legal changes?
“We want to give a message to industry that we are here to support you,” he explained. The amendments might not be transformational in terms of direct impact on industry and employment, he said, but could have an indirect impact on the state’s economy by improving business sentiment.
Shorn of the hoopla, the change in Rajasthan's labour laws boils down to “a signal”.
“By amending the laws," said KL Jain of the Rajasthan Chamber of Commerce and Industry, “the government has signalled that it is interested in the growth of the manufacturing sector and would do anything to promote it. It has shown that it wants to make Rajasthan an industry-friendly state.”
But this is precisely what angers trade unionists.
“If you want to promote industry, give it subsidies,” said Shyam Sunder Sharma of the Bhartiya Mazdoor Sangh. “Why take away the legal rights of workers?”
But as reported earlier in this series, the legal rights of workers were poorly enforced in the past and the amendments merely formalise trends already underway in the industrial landscape: easy retrenchment and widespread contractualisation of labour, among others.
“What was being done covertly will now be done overtly,” said Sharma. In his view, the damaging aspect of the amendments was in the way they had taken away the possibility of redressal for violations that impinge on the welfare of workers.
“The labour laws were among the first legislations of independent India,” said Ravindra Shukla of the Centre of Indian Trade Unions. “By reversing their provisions, you are turning back the clock on worker safety.”
But doesn't the antiquity of the labour laws make it imperative to amend them to keep up with the times?
“The government can by all means review, update and streamline the Factories Act,” said Shukla. “But why change the definition of a factory to exempt thousands of units from any safety regulation?"
The amendments indeed amounted to a signal, he said. “They signal that the balance of power in the state has shifted even further away from labour and towards capital.”
Beyond ideology
There may be another way to look at the question of labour law reforms beyond frozen ideological categories. As Rajasthan’s industrial landscape shows, the regulatory framework is a behemoth that is no longer serving the purposes of either labour or capital. The framework needs to be thought afresh. As Pranab Bardhan, professor at the department of economics, University of California, Berkeley, argued in the Indian Express, “the whole gamut of Indian labour laws requires a major overhaul.” Bardhan calls upon the Indian policy community to “think of imaginative overall reforms that may help both labour and capital.”
This is perhaps the soundest criticism of Rajasthan’s recent labour amendments: they were rushed through without any public consultation or policy deliberations. Chief minister Vasundhara Raje’s cabinet approved the amendments in the first week of June. By the end of July, the assembly passed them through a voice vote, with reportedly less than half the members of the assembly in attendance.
If the rest of the country were to unthinkingly emulate Rajasthan’s example, India might find itself saddled with a new set of laws no better than the old ones.
