India’s labour reforms promote inclusion as well as productivity

The codes are designed to work in the interests of our workforce while supporting economic growth

- S. MAHENDRA DEV is chairman, Economic Advisory Council to the Prime Minister (EAC-PM).

India’s demographic dividend requires turning our working-age population into a productive workforce.

For labour-intensive manufacturing and services to expand, it is essential that labour as a factor of production is composed of productive individuals who are equipped to take advantage of the opportunities offered by high economic growth. It is also imperative that labour is not disadvantaged by excessive regulation, which hinders the growth of labour-intensive manufacturing. The implementation of India’s four labour codes on wages, industrial relations, social security and occupational safety, health and working conditions represents a historic step towards protecting workers, increasing productivity and easing labour law compliance.

Over the last decade, the government has taken bold steps to encourage manufacturing, including its production-linked incentive scheme, ‘Make in India’ programme, National Logistics Policy, PM Gati Shakti and others. Thanks to its sustained infrastructure push, logistics costs have fallen. Also, trade agreements are increasing foreign market access and contributing to export diversification. Labour reforms are part of a holistic approach to policy reforms aimed at enhancing growth.