In what is seen to be the first of several moves to make his Make in India campaign a reality, Prime Minister Narendra Modi last week launched the Pandit Deendayal Upadhyay Shramev Jayate Karyakram, a mouthful of an initiative that introduces a series of changes to current labour laws.
Shramev Jayate, according to Modi, is meant to ensure that employers treat labourers (“shram yogis”) with compassion. Three of the five initiatives tie in with each other to bring an end to the “inspector raj”.
Governments, he said, must trust their people, which is why he would allow companies to self-certify that they were complying with labour laws. Instead of annual inspections through the year, companies registered with the scheme would instead be inspected at random, through a computerised system. As a part of the self-certification process, the online Shram Suvidha Portal will be developed a single destination for companies to file compliance reports with 16 different labour laws.
The scheme seems revolutionary on the face of it. Businesses have often complained about all-powerful inspectors who invariably need to be bribed for businesses to start, function or shut down.
A dud
The idea, however, is over a decade old and is not even well-received.
Several states in India, including Gujarat, Maharashtra, Punjab, Haryana and Rajasthan, have had versions of this scheme for years. Companies that register under the scheme will not be subjected to frequent inspections as long as they certify on stamp paper that they are in compliance with the labour laws applicable in that state, and will continue to uphold them. These companies will then have completely randomised inspections.
However, companies are not taking the bait. Maharashtra, which has had self-certification since 2006, had only five takers as of 2010. The scheme is not likely to have improved beyond that.
The schemes, as they have been implemented in various states, did not work for two reasons, said KR Shyam Sundar, a professor at the Xavier Labour Research Institute in Jamshedpur.
“Employers shy away from the scheme because they have to make a declaration on stamp paper saying that they will abide by all laws in the scheme,” he said.
If companies are caught violating the scheme, they will then suffer from heavier than usual penal action and will be deregistered from the scheme.
“Typically 10-12 laws are covered under this scheme" in each state, he added. “Companies argue that given the complexity of labour laws, any union can write to govt saying a clause has not been implemented. If the laws are complex and absurd, then you cannot expect them to give legal declarations saying that they are fully compliant.”
Another concern is how feasible the scheme will be for those without the infrastructure to manage it.
“Do small industries in rural and semi-rural areas have that kind of facility?” asked BP Pant, an advisor with the Federation of Indian Chambers of Commerce and Industry. “Can they work through the internet? The government will have to take pains to develop the technology and their skills and manpower. This will have to take place along with other measures.”
A matter of trust
Even those companies that do register under the scheme do not consistently file their paperwork.
“That is the greyest part of the story,” said Ramabhushan Rao, Joint Secretary at the Andhra Pradesh labour ministry.
Andhra Pradesh, like several other states, has enacted relaxed norms for software companies and for special economic zones. One of the provisions of these norms is self-certification.
“Except for major industries, most companies do not utilise the relaxation,” continued Rao. “A substantial number of companies have not even submitted self-certification.”
“Labour law is rampantly violated,” said Gautam Mody, general secretary of the New Trade Union Initiative. “We are at a stage where neither certification nor self-certification work. There isn’t a shred of labour legislation that works.”
Gautam Mody that of the prime minister's suggestion that citizens should be trusted, "Would he also say that unions should be certified to assess whether companies violate laws? Would an organisation like the NTUI be able to say that minimum wages are not paid in a company? It is an extremely patriarchal, undemocratic formation that trusts only those who have means, assets and control capital.”
Given the prime minister’s championing of the scheme, more companies might eventually sign up for the scheme as interpreted by state governments. All this might ultimately be a case of a successful public relations campaign.
We welcome your comments at
letters@scroll.in.
Shramev Jayate, according to Modi, is meant to ensure that employers treat labourers (“shram yogis”) with compassion. Three of the five initiatives tie in with each other to bring an end to the “inspector raj”.
Governments, he said, must trust their people, which is why he would allow companies to self-certify that they were complying with labour laws. Instead of annual inspections through the year, companies registered with the scheme would instead be inspected at random, through a computerised system. As a part of the self-certification process, the online Shram Suvidha Portal will be developed a single destination for companies to file compliance reports with 16 different labour laws.
The scheme seems revolutionary on the face of it. Businesses have often complained about all-powerful inspectors who invariably need to be bribed for businesses to start, function or shut down.
A dud
The idea, however, is over a decade old and is not even well-received.
Several states in India, including Gujarat, Maharashtra, Punjab, Haryana and Rajasthan, have had versions of this scheme for years. Companies that register under the scheme will not be subjected to frequent inspections as long as they certify on stamp paper that they are in compliance with the labour laws applicable in that state, and will continue to uphold them. These companies will then have completely randomised inspections.
However, companies are not taking the bait. Maharashtra, which has had self-certification since 2006, had only five takers as of 2010. The scheme is not likely to have improved beyond that.
The schemes, as they have been implemented in various states, did not work for two reasons, said KR Shyam Sundar, a professor at the Xavier Labour Research Institute in Jamshedpur.
“Employers shy away from the scheme because they have to make a declaration on stamp paper saying that they will abide by all laws in the scheme,” he said.
If companies are caught violating the scheme, they will then suffer from heavier than usual penal action and will be deregistered from the scheme.
“Typically 10-12 laws are covered under this scheme" in each state, he added. “Companies argue that given the complexity of labour laws, any union can write to govt saying a clause has not been implemented. If the laws are complex and absurd, then you cannot expect them to give legal declarations saying that they are fully compliant.”
Another concern is how feasible the scheme will be for those without the infrastructure to manage it.
“Do small industries in rural and semi-rural areas have that kind of facility?” asked BP Pant, an advisor with the Federation of Indian Chambers of Commerce and Industry. “Can they work through the internet? The government will have to take pains to develop the technology and their skills and manpower. This will have to take place along with other measures.”
A matter of trust
Even those companies that do register under the scheme do not consistently file their paperwork.
“That is the greyest part of the story,” said Ramabhushan Rao, Joint Secretary at the Andhra Pradesh labour ministry.
Andhra Pradesh, like several other states, has enacted relaxed norms for software companies and for special economic zones. One of the provisions of these norms is self-certification.
“Except for major industries, most companies do not utilise the relaxation,” continued Rao. “A substantial number of companies have not even submitted self-certification.”
“Labour law is rampantly violated,” said Gautam Mody, general secretary of the New Trade Union Initiative. “We are at a stage where neither certification nor self-certification work. There isn’t a shred of labour legislation that works.”
Gautam Mody that of the prime minister's suggestion that citizens should be trusted, "Would he also say that unions should be certified to assess whether companies violate laws? Would an organisation like the NTUI be able to say that minimum wages are not paid in a company? It is an extremely patriarchal, undemocratic formation that trusts only those who have means, assets and control capital.”
Given the prime minister’s championing of the scheme, more companies might eventually sign up for the scheme as interpreted by state governments. All this might ultimately be a case of a successful public relations campaign.
