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Reforming the Labor Laws in India

They are only sources of harassment in the present regime of inspectors. .
             There is a separate inspector for all labor legislations and visits of inspectors are not synchronized across all labor enactments. Also no maximum period is prescribed for which records and registers must be maintained. Compliance is thus impossible and visits of inspectors result in bribery and rent-seeking. This system is not distributionally neutral as it tends to hurt the small-scale sector much more than it hurts large-scale industry. That apart, returns under various labor laws are not standardized and inspectors insist on maintenance of manual records and registers.
             One can think of several changes in the Factories Act. We list here only the prominent ones:.
              All frivolous provisions of the Act should be scraped.
              There should be a common format for computerization of required records.
              There should be a single inspector for a given area.
              Some inspections for site and building and site plans or testing equipment should be farmed out to recognized private agencies.
              With the opening up of insurance, some social security provisions should be farmed out. For example, the Employees" State Insurance Act hasn't worked at all well.
             The Contract Labor (Regulation and Abolition) Act .
             It is now widely accepted that contract labor is an extremely flexible source of labor supply and also permits outsourcing. To this extent, contract labor should be allowed to flourish. .
             Even though this Act was supposed to prohibit contract labor, it never effectively did so. For instance, Section 10 provided the government the discretion of prohibiting contract labor only in select areas. Similarly, the Act emphasized regulation rather than complete abolition of contract labor. In this respect, this Act was harmless.
             But a few court judgments changed all that. In 1960 and again in 1972, the Supreme Court ruled that if work performed by contract labor was essential to the main activity of the industry, contract labor should be abolished.


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