<div><em><strong>Sutanu Guru</strong> Looks at some challenges before the Modi regime as it gets ready to reform and revamp outdated labour laws</em></div><div> </div><div>To borrow dialectically from Marx, a specter is haunting the Modi regime; the specter of a nationwide strike planned by all major trade unions on September 2. The strike has been called to protest against proposed changes in labour laws to make them more investor friendly. The Modi regime has adopted a classic divide and rule approach to ward off the specter. It has couched labour law reforms in a language that should warm the cockles of any worker or even labour activist. During a meeting of a Group of Ministers tasked to handle this politically sensitive issue, some major “pro labor” decisions were taken and announced.</div><div> </div><div>The most significant decision is the proposal to make a national minimum wage mandatory across all categories. Till July 2015, the central government had the minimum wage fixed at Rs 137 per day. In July, that was raised to Rs 160 per day which works out to Rs 4,160 per month. This wage level is not mandatory; it is merely a government advisory. Even a school kid knows that this is a ridiculously low amount. But all that will change now. The Group of Ministers have decided that labor laws will be amended so that the minimum wage for a skilled worker in a “developed” state will be Rs 20,000 per month. All states in India have been divided into three categories: developed, developing and underdeveloped. For developing states, the minimum wage will be fixed at Rs 17,000 per month for skilled workers while the same will be Rs 14,200 per month for under developed states. Generous floor levels have been fixed for even semi-skilled and unskilled workers. For example, the minimum wage for an unskilled worker in an under developed state will be fixed at Rs 7100 per month. What’s more, the proposed new law while making it mandatory for states to implement this will allow them to fix even higher minimum wages if they wish to do so.</div><div> </div><div>There is little doubt that this will have a lasting and transformational impact. When the NREGA Scheme started being implemented in 2006, there were many skeptics. But a few years down the road, it became clear that the floor set by the minimum wages fixed f0r NREGA schemes became the norm for landless labor in rural areas. This has played a big role in reducing poverty levels in rural areas. Similarly, f these changes are passed into law, there is little doubt that there will be a huge impact on urban wage levels across the board. What’s more significant is that the new law will apply even to all categories of “contract” workers. Anyone familiar with India Inc. and the factories run by them knows this: over the last decade and half, companies have stopped hiring workers and have hived off the task to “private contractors”. These contractors pay their workers far less than what the companies directly pay their workers. This has been the root cause of persistent industrial unrest in industrial clusters ranging from Gurgaon to Pune to Coimbatore. A minimum wage for such contract workers will indeed stop this unethical and often inhuman practice adopted by many companies.</div><div> </div><div>Many more decisions have been taken, including provident fund benefits for people employed in flagship schemes like Sarva Shiksha Abhiyaan and National Rural Health Mission. Soon after the decisions were announced, it looked as if the divide and rule approach of the Modi regime seem to be working. The Bhartiya Mazdoor Sangh, the largest trade union in India and an affiliate of the welcomed the new steps and provided sufficient hints that it may not join the September 2 strike as planned earlier. Of course, left leaning unions like the Center of Indian Trade Unions are still not mollified and seem hell bent on the strike. But the strike will lose its potency if the BMS doesn’t participate.</div><div> </div><div>That is the politics for the moment. In the longer run, the Modi government will face two challenges. The first is to pass the law. Going by the track record of the monsoon session, the Congress and some other parties will make all possible attempts to scuttle the Parliament. Even if the Modi government does manage to pass a law, the bigger challenge will be implementation. In India, it has always been easier to pass laws than to implement or enforce them. But of course, over the long term, this new law could be genuinely transformational. </div><div> </div>
