MP’s measured approach to labour reforms

SANDEEP KUMAR looks at the changes the Shivraj Singh Chouhan-led BJP government has made and the impact they have had on MP's economy

In more than 13 years in office, Madhya Pradesh Chief Minister Shivraj Singh Chouhan has rarely met any trade union leader or delegation including those of the Bhartiya Mazdoor Sangh (BMS), the labour wing of the Rashtriya Swayamsevak Sangh (RSS). This tells us how seriously he has taken labour issues in the state," said labour expert Mohan Karpe, an advocate.

In the past two years the labour court of Indore has not given even two judgments. At this speed how can you expect quick proceedings, he asked. In 2015, the MP government amended as many as 15 labour laws. The move was seen as proindustry. The state was inviting global investors to invest in Madhya Pradesh. Some key amendments included easing retrenchment norms, three months’ compensation to retrenched workers, raising overtime hours, and night shift for women.

According to new rules, companies employing up to 300 workers, against the provision for up to 100 workers earlier, were allowed to retrench workers or shut shop without government approval. However, the new rules made it mandatory for the employer to pay a higher compensation, three months’ notice and at least three months’ salary in the event of retrenchment. Earlier, either of the two was allowed, and employees were paid 15 days’ wages for every year worked.

A senior BMS leader said, “Although the chief minister portrays himself as a

'son of a farmer', the truth is changes in the labour laws favour industry rather than the workers.”

Sultan Singh Shekhawat, chairperson of the MP RuralUrban Unorganized Worker Board, has a different view. He said, “New factories coming up in Madhya Pradesh have been asked to hire unskilled labourers locally. They also have been asked to hire almost 80 per cent of technical staff within the state. Don’t you see this as an advantage to local workers?”

Almost 30 million in the state are working as agricultural labourers, industrial workers, construction workers, etc. Chouhan played a masterstroke by bringing in the Jankalyan (Sambal) Yojana, which gave benefits to organised labourers, small farmers and other people from the organised sector. The scheme includes electricity at ~200 a month, inclusion in education and the public distribution scheme, etc.

Chouhan and the BJP believe this scheme can bring them a fortune because more than 22 million people are registered under it. This has been an untouched constituency until now.

“While welfare is being packaged as an electoral draw, there is no evidence that on their own strength, amendments in labour laws have succeeded in attracting big investment or creating jobs. Nor have these amendments singularly resulted in enhancing exploitation of labour,” said an impact assessment study by Sanjay Upadhyaya and Pankaj Kumar of the V V Giri Centre of Labour.

There is another aspect to this. Evidence shows when a predominantly agrarian economy wants to shift to a manufacturing one, it needs to absorb two kinds of surplus: The surplus generated through farming and excess labour. It is still unclear how the state proposes to address this.

Although Chouhan claims to generate around 170,000 jobs through investment initiatives in the near future, it is not clear what kind of jobs will be created, what skills these jobs require, and whether the workforce in the state possesses those skills.