There was  a good profile of India’s labour laws in Mint last week. Apart from some absurd regulations, what stood out was the fact that while on paper India’s labour laws are strict, implementation is lax, and that provides flexibility to employers. What that also means (strict rules, lax availability) is increased power and rent seeking capability of the government, since they can choose when they want to throw the rule book at you (and if they choose to, it can hit you very hard).

On a similar note, the Chief Justice of India has slammed the incumbent government for “unilaterally blocking” the appointment of lawyer Gopal Subramanium to the Supreme Court. Here again, it is within the capacity of the government to “unilaterally” block the appointment of a Supreme Court judge – there is nothing to bind the decision of the judicial college on the government. It just so happened that in the past the government would usually not reject the recommendations of the college.

A good place to start reforms (though will to reform these might be weak) would be to get rid of these discretionary measures. If it is prudent that the government and the Supreme Court consult over appointment of new judges, put that down in writing. If it is “known” that labour laws are not going to be enforced, change the laws so that the letter of it is something that is easy to enforce.

One of the reasons we are seeing some friction on these counts is that perhaps for the first time we have an “outsider” government. It is likely that more such frictions will come to the fore in the coming days. From this perspective, it would be prudent of the government to change the laws as necessary so that the letter is in line with the spirit.