Sitharaman stresses Modi 2.0 to go ahead with labour reforms

Finance Minister Nirmala Sitharaman Friday gave a clear indication that the Modi 2.0 government would go ahead with labor reforms to improve the ease of doing business by standardizing and streamlining multiple labor laws into a set of four labor codes. During the past five years, the government tried to push labor reforms, but trade unions continuously opposed certain amendments in labor laws. The government wants to concise 44 labor laws into four broad codes on wages, social security, industrial safety and welfare, and industrial relations.

Presenting her maiden Budget, Sitharaman said in Lok Sabha, "The government is proposing to streamline multiple labor laws into a set of four labor codes. This will ensure that the process of registration and filing of returns will get standardized and streamlined. With various labor-related definitions getting standardized, it is expected that there shall be fewer disputes." Earlier this week, the Union Cabinet approved the Code on Wages Bill which seeks to subsume existing laws related to workers' remuneration and enable the Centre to fix minimum wages for the entire country.

The government intends to push the bill for passage in the ongoing session of Parliament. The previous Modi government had introduced the wages code bill in the Lok Sabha on August 10, 2017. The bill was referred to the Parliamentary Standing Committee which submitted its report on December 18, 2018. The bill, however, lapsed after the 16th Lok Sabha was dissolved in May. The Code on Wages Bill will replace the Payment of Wages Act, 1936, Minimum Wages Act, 1948, Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.

The bill provides that the central government will fix minimum wages for certain sectors, including railways and mines, while the states would be free to set minimum wages for another category of employment. The code also provides for setting up of a national minimum wage. The central government can set a separate minimum wage for different regions or states. The draft law also says that the minimum wage would be revised every five years. The other three codes on social security, industrial safety and welfare, and industrial relations are at the pre-legislative stage.