Takshashila Scholar Hemal Shah’s research cited in The Business Standard on a piece on labour reforms.
“In the face of such polarity, a 2013 study by Hemal Shah, a Scholar at the Takshashila Foundation titled -Towards greater labour market flexibility: Issues and Options – provides for good reading about using a workable approach to find a common meeting ground among labour representatives, government and employers. Shah’s valid contention is that policy makers for long have suggested drastic measures to make labour markets more flexible, and these have been met with staunch resistance from those that have a vested interest in keeping them rigid, leading to a prolonged impasse. If a breakthrough is to be achieved, a middle ground must be found and low hanging fruits picked so as to accomplish at least marginal progress.
While not a “laundry list”, Shah suggests a number of policy considerations to break the stalemate once and for all. Among them are moving legislation from Concurrent to State List to ensure that “labour laws and regulatory practices are made compatible with economic and social structures prevailing in the States”. This she says would give the states flexibility to experiment with legislation and compete with other states spurring positive outcomes. Segregation and unbundling of the layoff, retrenchment and closure provisions in the Industrial Dispute Act and an increase in compensation/ severance packages to reduce long dispute settlements are among other prescriptions stipulated. Shah also calls for the recognition of unions comprising of similar industry units to reduce multiplicity and unnecessary trade unionism rather than stopping engagement with them altogether.
“It is time we start a nuanced discussion on how to develop the labour market: to think about small reforms, which are compatible with the current political economy, and include the informal sector in the reforms dialogue” she adds, concluding that 60 years of reforms concentration only in the formal sector has not yielded any meaningful results which calls for an approach that works on small tweaks rather than fails on big promises.”
Hemal shah worked on a research report On Labour Law Reforms in India under the Takshashila Scholars Programme.