Changing labour laws is continuous process

Govt must implement Labour Codes immediately, unions must support them, industry must respect them, and all must agree to work to improve them on an ongoing basis

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Why is wage growth in India not higher than what it is? Whether a worker in an organised-sector industrial establishment or an informal-sector labourer, wages are barely growing enough to keep pace with inflation. Unfortunately, few researchers have tried to unpack this issue, and the widespread consensus is that poor skilling is responsible for this. And poor skilling, it is widely believed, is due to inadequate basic education and the bad delivery of skilling services. While all of these may be true, they surely cannot be the only issue. First, not all states have poor-quality basic education. Kerala, Tamil Nadu, and Himachal Pradesh are some well-known examples but not the only ones. Moreover, even in other states across India there are many schools, both in the private and public domain, where basic education is fairly good. Further, if a person has good basic education, a few months would be adequate for learning most manufacturing-sector skills. In other words, skilling and education are a constraint but not the critical ones. There is something else that is holding Indian manufacturing back.

Labour laws are another challenge, and two broad categories of criticism are levelled against them. The first points fingers at the laws and Indian industry not providing workers adequate benefits, safety, security, or support. The second is about the archaic nature of labour laws, inflexible unions, and obstructive labour departments, and that it is better for industry to remain in the informal sector or hire temporary workers.