The Law Of Lopsided Growth



Don’t strike! The government proposes to change the labour laws to make it tougher for workers to organise and agitate. Photo: Tehelka Archives
Don’t strike! The government proposes to change the labour laws to make it tougher for workers to organise and agitate. Photo: Tehelka Archives

Last December, in his address to a group of business leaders Prime Minister Narendra Modi made a candid declaration of what he believes sets his regime apart from all the previous governments. “Government is generally trapped in an ABCD culture. A means Avoid, B is for Bypass, C for confuse and D for Delay,” he said. “Our effort is to move from this culture to ROAD, where R stands for Responsibility, O for Ownership, A for Accountability and D for Discipline.”

When Modi said this, his government was already well on its way to make the “system” more investment friendly. And there is a certain crystal-clear consistency to how it has gone about the task. There was never an iota of doubt over the BJP’s intent to make India an attractive destination for foreign investment and iron out the rough spots for Indian big business as well. A key component of Modi ’s strategy to fulfil the ruling party’s intent involves changing the overarching legal framework that governs industry, including laws that impinge on the relationship between the management and workers.

Even as the regime tries to move double- quick on its chosen ROAD, there has been no dearth of critics who question the very assumptions behind the NaMo ‘model of development’. Most of them point out that the fundamental flaw of what the financial press calls Modinomics lies in considering Gross Domestic Product (GDP) as the sole — or even the primary — indicator of development.

The critics also argue that tinkering with the legal framework with the single- minded goal of facilitating investment would do away with the existing, though inadequate, social security measures, which might ramp up the growth figures but it would be growth of a lopsided kind that would deny most of the population the right to a share in the benefits of development.

However, there is another crucial trait that sets this regime apart from every government that preceded it: a deepseated intolerance of opinions contrary to its own. That is why, regardless of widespread opposition from civil society, anti-displacement movements, workers’ organisations and sections of the political opposition, the party that came to power a year ago with a rousing electoral mandate — 31 percent of the voters across the country affirmed their faith in Modi’s promise of “acche din aane wale hain (good days ahead)” — has gone ahead with changing the laws that have hitherto defined the way business is done in India and how the establishment deals with disputes between managements and workers as well as questions of ecology versus growth.

One of the first major decisions of the new regime was to appoint a committee under the chairmanship of former cabinet secretary TSR Subramanian to assess how far the implementation of some crucial environmental laws had fulfilled the objectives for which they had been enacted. Formed on 29 August 2014, the committee was asked to review the Environment Protection Act (1986), the Forest Conservation Act (1980), the Wildlife Protection Act (1972), the Water (Prevention and Control of Pollution) Act (1974) and the Air (Prevention and Control of Pollution) Act (1981).

A key recommendation of the committee was that the authority to approve development projects should be taken away from the Ministry of Environment, Forest and Climate Change (MoEGCC). It proposed that a new body called the National Environment Management Authority (NEMA) should be set up to take such decisions.

The ambition of making the economy more investment friendly has forced the government to doggedly pursue amendments to the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (2013), the law that had replaced the British Raj vintage Land Acquisition Act of 1894. Key provisions of the new law brought in by the UPA-2 regime after sustained campaigns by grassroots movements and civil society groups had earned the ire of the captains of industry, who have ever since been crying hoarse over how these were making it difficult for them to take over land for their projects.

Interestingly, these were the very provisions that made the 2013 law different from the colonial-era Act and promised to protect the right of project-affected people — mostly Adivasis and Dalits, who comprised a disproportionate 60 percent of Indian citizens displaced by development projects since 1947 until 2004 — to refuse consent to their land being acquired, besides making approvals for projects contingent upon an official assessment of its potential social impact.

Another long-time sore point with big business has been what the industrialists and the financial press often calls “archaic” labour laws that stand in the way of their freedom to hire and fire at will and force them to deal with strikes as well as litigations filed by workers or the unions asserting their demands. Industrial bodies such as FICCI and CII have been demanding the overhaul of labour laws, arguing that the existence of 44 central laws and hundreds of state labour laws adds to the complexity of doing business. A FICCI report claims that “the outdated and inflexible nature of the labour laws” hampers job-creation in the organised sector.

The champions of industry also argue that the industrial-labour law framework was designed in accordance with an economy where manufacturing formed the bulk of industry — a situation that they claim has changed with services now forming a greater part. Moreover, umpteen studies by the Labour Commission and various parliamentary working groups in the past couple of decades have suggested that the laws be changed to suit “the changing needs of the economy”.


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