START-UP INDIA AND STAND UP INDIA!

– An
initiative through the project MAKE IN INDIA,
envisioned through the lens of Labour Reforms.

NAME: Priyanshi Gandhi

PROGRAM: BBA-LLB (2016-21)
MODULE: Labour Law-1
MODULE LEADER: Prof. Subarna Ghosh

KNOWING THE MAKE IN INDIA PROJECT-

THE IDEA OF IT ALL: The year 2014 was a recasting year for India which is strongly
believed due to The Indian General Elections being held but another important event that
happened the same year was the dispatching of the ‘Mangalyaan’ to the Mars. The cost of the
project was 4.5 billion, which was estimated due to the resources being availed at low costs
and at a better availability. Building the Mars Rover not only was an achievement but also the
quintessence of the idea of the Make In India Project.

THE IDEA OF MAKE IN INDIA: The project make in India has been mainly focusing on
the manufacturing sector of the economy, as it is believed to be an important contributor
towards the countries development. The manufacturing sector of the economy has been
through a lot of phases that can be broadly categorized as-
 1950’s – 1960’s: The phase of establishing the sector.
 1965’s – 1980’s: The licensed phase, where a manufacturer was bound by regulations
regarding establishments of manufacturing units.
 1990’s: The liberalization phase, where the new economic policies were introduced
and the Indian market was opened up and entered the international competition.

The manufacturing sector not only does provide goods at a better and cheaper costs but also
reduces foreign dependence due to decreased imports within the economy, providing people
with opportunities to employment. To refine and boost the manufacturing sector of the
economy, the government introduced the project ‘Make In India’. It aimed at tectonic
transformation of the manufacturing sector of the Indian economy through-
 high productivity levels,
 rapid rate of growth of productivity in relation to global and national frontier
 a strong ability of the dynamic sector to attract resources,
 alignment of the dynamic sector with country’s underlying resources, and
 tradability of the sector, that is, possibility of exports and imports, positive terms of
trade.
Make in India was then launched by The Prime Minister, Mr. Narendra Modi on 25th
September, 2014. The campaign focuses on job creation and skill enhancement in 25 sectors
of the economy. These sectors are automobiles, chemicals, IT, pharmaceuticals, textiles,
ports, aviation, leather, tourism and hospitality, wellness, railways, design manufacturing,
renewable energy, mining, biotechnology and electronics (Business Standard, 2014). The
campaign expects to attract capital as well as technological investment in India (Business
Standard, 2014).

UNDERSTANDING THE LABOUR LAWS IN INDIA-

In order to comprehend the labour laws in India, a major point that has to be understood lies
in the difference between the employees who are workmen and the ones who aren’t. The
people working under managerial or administrative categories do fall under the definition of
employees not characterised as ‘workmen’ whereas the employees employed in manual
labour, skilled and unskilled work are characterised as ‘workmen’. The employees are bound
by contracts whereas the ‘workmen’ aren’t but receive a greater deal of legal protection under
the Indian Labour and Industrial Laws.

Labour laws conjointly referred to as employment laws are the body of laws that deals with
the legal rights of, and restrictions on, working individuals and the organization. It arbitrates
relationship among employers, workers and trade unions. In easy terms, labour laws may be
delineated as ‘the rights and obligations for the employees, employers and union members at
the workplace.’ the requirement for introducing labour laws arises because of demands raised
by employees for better working conditions on the one hand and demands by the employer to
limit the powers (authority) workers get in a company and to keep low labour value on the
opposite hand. The International Labour Organization (ILO) was the primary agency that was
set-up to cope with labour issues.

The Constitution of introduced industrial laws to supply legal basis to the laws for
employment and labour in India. Labour legislation was shaped when the Independence of
India with an objective to handle varied issues associated with working conditions, industrial
safety, hygiene and welfare, wages, trade unionism, Social Security, etc. The Indian labour
market is generally divided into 3 categories:
  organized sector
 urban informal (i.e., unorganized) sector and
 rural labour (i.e., labour engaged principally in agriculture).

The prevailing list of constitution mentions labour welfare laws, labor union, industrial and
labour disputes and Factories Act as necessary statutes of the constitution for the labour.
These laws were conjointly enacted to fulfill special needs of specific industries and business
established like mines, plantation, factories, retailers and institutions to name a few.
throughout the time of national emergency within the year 1975, the ministry introduced few
anti-inflationary acts like Payment of Bonus Act, 19751, Equal Remuneration Ordinance,
19752 for restructuring labour laws within the country.

NEED FOR A CHANGE-

In today’s time, the service sector contributes around fifty-five per cent to the nation’s GDP
compared to the manufacturing sector that contributes around sixteen per cent (FICCI,
2014)3. As a result, there's a necessity to deal with these rising needs of the service sector also
because the technology-driven manufacturing sector (FICCI, 2014).4 This has urged the
government to think about reforms in labour laws. Thus, there's a necessity for reforms
within the direction of creating Indian labour market versatile and competitive in
international market. the government with the assistance of different consultants is setting up
efforts to shift Indian labour market from being exponent to competitive and open.

The Make in India project, aimed at resuscitating the domestic investments, improving
efficiency of businesses by easing the ways of doing business and most importantly attracting
foreign investors within the economy. It was difficult for the government to realize these
results due to the age-old existing labour laws within the nation. For instance, the foreign

1
Payment of bonus Act,1975
2
Equal remuneration Ordinance Act, 1975

3
Kinjal Shukla, Maitryi Purohit, Shubhra P. Gaur “studying make in india through the lens of labour reforms”
42(1) 1–19 (2015)

4
Ibid
investors found it difficult entering the Indian market as they showcased as not friendly and
inflexible as compared to other economies like China. Issues which came up were skill and
education of workers, need for reforms in labour laws, customs and trade regulations and
access to land. Thus, such issues and stringent labour laws in India roused the need to bring
reforms in the labour laws of India.

REVAMPING THE FACTORIES ACT, 1948

The main reason for amendments in the factories act is to keep up its pace with the emerging
global scenario. When the act was formed i.e., in 1948 the Indian economy was going
through many crucial changes like, the economy was closed from international competitors,
both the manufacturing and the service sector struggled to keep pace with the market. But as
the economy opened up (after 1991) it showcased a major transition in its economy, the
manufacturing sector now faced a major amount of foreign competition, the consumers
started having a choice between competitors as opposed to earlier and they started facing
competition with emergence of foreign companies within the economy.

With the economy opening up not only did the manufacturing sector faced competition but
rather, the way the workers were protected, treated or employed also differed. The factories
act was formulated in the year 1948, it could not keep pace with the current economy which
was a major reason for its amendments.

The Factories amendment Bill, 2014 was written after considering suggestions and opinions
from trade unions, Organizations, and people. The suggestions were collected by conducting
a press conference. The committee has considered views of the main trade unions of India,
that is, CITU, AITUC, BMS and HMS in a meeting held on 4th December, 2014 (Ministry of
Labour and Employment, 2014).5 The amendments clearly focused on-

 Improving workers safety

 Technologies improved for better and transparent inspection

5
Supra note 3 at 4
  Provision of overtime
 Issues regarding penalties
 Rights of women regarding night shifts
 Issues regarding benefits of workers and paid leaves.

 IMPROVING WORKERS SAFETY

The provision for health and safety measures take care of the health and safety standards
prescribed below Factories Act, 1948.6 it is obligatory for the factories to follow these
measures. However, Factories modification Bill suggests certain reforms beneath the act.
These reforms projected that a separate committee comprising a chairman and 2 members
shall be brought about to look at the health and safety measures within the industrial
plant. This committee is required to follow the rules mentioned for the regulator beneath
the Occupational Safety and Health Board of India (OSHBI).7 These tips clearly mention
the role of a regulator in catering to the health and safety of staff at the workplace. The
regulator is needed to frame the rules concerning the final operating conditions for the
staff employed within the factory. Also, the formulation of regulative content and follow,
standard setting, monitoring and information management, follow-up and feedback,
licensing of competent persons and examination scheme to confirm safety of the
workplace falls below the compass of responsibilities of the regulator. Besides this,
schedule I (roles and responsibilities of the regulator) and schedule II (power of the
regulator to create changes through regulations) mention varied necessary duties that a
regulator must perform to produce safe workplace to the employees. The act mentions
that the regulator can follow the standards mentioned below the act for the hazardous
method, dangerous operations, and measures for basic health and safety (Ministry of
Labour and Employment, 2015).

 IMPROVING THECHNOLOGIES FOR INSPECTION-

Another necessary provision for the security of employees is the inspection and
compliance scheme. As an amendment to the law, the government has mentioned the
qualifications needed for acting as an inspector for the industrial plant. The roles and
responsibilities of the Chief Inspector office (CIF) are mentioned within the draft. the
government has proclaimed to form the labour inspections and compliance scheme clear
6
The Factories Act, 1948
7
Id at 5
 with an aim to push occupational safety. to create the process transparent, a processed
system is launched whereby risk-based criteria are preferred over arbitrary inspections
based on discretion. The necessary review list is written that covers all the intense matters
that shall be considered under the method of review. Labour inspector has to transfer
these reports of review within seventy-two hours. From the date of its launch until Jan
2015, the processed system has generated twenty-one, 552 inspections out of which
18,149 inspections are conducted and therefore the reports of a similar are already
uploaded on the portal.

 PROVISION OF OVERTIME-
One of the most important changes that are proposed under Factories Act is an increase
within the total range of operating hours for overtime. The Factories amendment Bill
provides that the entire range of hours a employee ought to work together with overtime
shall not exceed sixty in any week and seventy five in any quarter. However, the
enunciating amendment suggests a rise within the overtime from seventy five to one
hundred hours per quarter (Ministry of Labour and Employment, 2015).

 ISSUES REGARDING PENALTIES-

This amendment has come back as a section of general modification in Factories Act. The
fine and penalty amount for the breach of the act within the Factories Act, 19488 was kept
constant; presently, the projected amendment has augmented all the amounts by six-fold
and have price-indexed it. the government, by price-indexing all the amounts, has created
future amendments simpler (Ministry of Labour and Employment, 2015b).

 RIGHTS OF WOMEN REGARDING NIGHT SHIFTS-

The government aimed at encouraging an inclusive workforce by proposing amendments
regarding employment of women for night shifts and by setting up guidelines for an
employer to be followed while employing a woman for a night shift. That include, proper
protection of dignity and honour, protection from sexual harassment at workplace and
also providing them with transportation after their shift’s ended. The proposed

8
The factories Act, 1948
 amendments also involved provisions regarding maternal leaves wherein the amount of
leaves was increased from 12 weeks to 16 weeks before the child birth and also after the
birth as prescribed by the doctor.

 ISSUES REGARDING BENEFIT OF WORKERS AND PAID LEAVES-

The current act states that a worker has to obligatory work for 240 days in order to
receive the benefits of paid leaves. The amendment tries to bring it down from 240 days
to 90 days. Hence, a worker who has worked for 90 days can avail the benefits of paid
leaves.

The factories amendment bill, 2016 was then introduced on 10 August, 2016. The act
regulates health, safety and welfare of the workers. The amendments introduced are-
 Power to make rules on various matters: The Act permits the state
government to prescribe rules on a range of matters, including double employment,
details of adult workers to be included in the factory’s register, conditions related to
exemptions to certain workers, etc. The Bill gives such rule making powers to the
central government as well.9
 
 Powers to make rules for exemptions to workers: Under the Act,
the state government may make rules to (i) define persons who hold management or
confidential positions; and (ii) exempt certain types of adult workers (e.g. those
engaged for urgent repairs) from fixed working hours, periods of rest, etc. The Bill
gives such rule making powers to both, the central and state governments.10 
 
 Under the Act, such rules will not apply for more than five years. The Bill modifies
this provision to state that the five-year limitation will not apply to rules made after
the enactment of this Bill.11
 

9
The Factories Act,1948 available at https://www.prsindia.org/billtrack/the-factories-amendment-bill-2016-
4368 (last visited on 20 March,2019)
10
Ibid
11
Ibid
  Overtime hours of work in a quarter: The Act permits the state
government to make rules related to the regulation of overtime hours of work.
However, the total number of hours of overtime must not exceed 50 hours for a
quarter.  The Bill raises this limit to 100 hours.  Rules in this regard may be
prescribed by the central government as well.12
 
 Overtime hours if factory has higher workload: The Act enables
the state government to permit adult workers in a factory to work overtime hours if
the factory has an exceptional work load. Further the total number of hours of
overtime work in a quarter must not exceed 75.  The Bill permits the central or state
government to raise this limit to 115.13

 Overtime in public interest: The Bill introduces a provision which

permits the central or state government to extend the 115-hour limit to 125 hours. It
may do so because of (i) excessive work load in the factory and (ii) public interest.14

The Maternity Benefit Amendment Act, 201715 introduced the following provisions-

 Increases the duration of the maternity leave from 12 to 26 weeks which can be
availed prior to 8 weeks from the date of expected delivery (earlier it was 6 weeks
prior).16
 From third child onwards, maternity leave to be for 12 weeks which can be
availed 6 weeks prior.17

AMENDMENT UNDER LABOUR LAWS ACT, 2011

12
Id at 8
13
Ibid
14
Ibid
15
The Maternity Benefit Amendment Act, 2017
16
The Maternity Benefit Amendment Act,2017 available at
http://www.mondaq.com/india/x/627720/employee+rights+labour+relations/Labour+Law+Amendments+201
62017 (last updated on 11 September 2017)
17
Ibid
The Labour Law amendment Act, 201118 is an attempt to expand the horizon of the Labour
Law amendment and Miscellaneous Provision Act, 198819 (principal act). The Labour Law
amendment Act, 2011 projected exemption from furnishing returns and maintaining registers
by certain institution. These certain institutions, which might avail this exemption, are clearly
outlined within the act. The Principal Act defines ‘small establishments’ as any place that
employs between ten and nineteen individuals on any day of the preceding twelve months. A
‘very small establishment’ could be a place that employs 9 or less than 9 individuals.
However, the Bill seeks to amend the definition of ‘small establishment’ to cover institutions
that use 10–40 individuals. The Principal Act states that these ‘small establishments’ and
‘very small establishments’ aren't required to furnish returns and maintain records below
certain laws like the Payment of Wages Act, 193620; the Weekly Holidays Act, 194221; the
Minimum Wages Act, 194822; the Factories Act, 194823; and also, the Plantations Labour Act,
195124. Instead, they're required to furnish returns and maintain registers in a fixed format.
However, the amendment Act suggests to incorporate seven additional legislations like the
Motor Transport workers Act, 196125; the Payment of Bonus Act, 196526; the Beedi and cigar
workers (Conditions of Employment) Act, 196627; the Inter-State Migrant Workmen
(RegulaConstruction Workers of Employment and Conditions of Service) Act, 1979; the
Dock workers (Safety, Health and Welfare) Act, 1986; the child Labour (Prohibition and
Regulation) Act, 198628; and also the Building and other Construction workers (Regulation of
Employment and Conditions of Service) Act, 199629. These institutions are needed to solely
maintain common types of returns or registers per the Act. Additionally, to those records, the
Principal Act mentions that it's obligatory for the leader to file returns and maintain records
during a specified format. they need to issue wage slip, amount of labor done slips and
returns associated with accidents. However, the amendment Act facilitates computerized

18
The labour Law Amendment Act, 2011
19
Miscellaneous Provisions Act, 1988
20
Payment Of Wages Act, 1936
21
Weekly Holidays Act, 1942
22
Minimum Wages Act, 1948
23
The Factories Act, 1948
24
Plantation Labour Act, 1951
25
Motor Transport Workers Act, 1961
26
Payment Of Bonus Act, 1975
27
The beedi and cigar Workers Act,1966
28
The child Labour Prohibition Act,1986
29
Building and Construction Workers Act, 1996
maintenance of those records. The employer has to give printouts of those records as and
when demanded by the inspector throughout inspections.

LABOUR REFORMS AND MAKE IN INDIA-

The project Make in India was formulated to bring about a transformation in the structural
and functional fundamentals of the economy. It was profound by the idea that transformation
of structural fundamentals of the economy was necessary to boost the economy. Investment
in the country-oriented business’s turns out to ensure a greater result in the long term. Such a
process is a long one, and the pay-offs are not spontaneous. Such transformation may end up
in some of the below listed changes-
 Changes in the output derived from different sectors
 Changes in the level of employment in the different sectors
 Changes in the rural and urban level of output of employment.

India has tailored to globalization in an exceedingly better approach than others. India has
traditionally been an agricultural economy with abundance in unskilled labour force; as per
the comparative-cost advantage theory by economic expert, the expansion of India would
consist the agricultural sector; as per the structural amendment definition, amendment in
sectoral employment would cause structural transformation. As noted, the sectoral movement
of employment would occur as per the skill set encompassed by the labour force, that is, a
farmer will more simply remodel herself into a production employee in a garment
manufactory than a BPO. It was also noted that in the amount between 1960 and 2012,
agriculture’s share of employment fell only by 22.5 percentage points (from 71.5 to 49 per
cent) and manufacturing’s share rose a marginal ten.2 percentage points (from nine.8 to
twenty per cent) (Central intelligence, 2012)30. Structural amendment contributed positively
in Indian growth story once the Nineteen Nineties, particularly once the relaxation of Indian
economy. However, the largest part of the positive growth was the service sector and not the
manufacturing sector. The manufacturing sector really shrunk during this time and created a
negative contribution throughout 2000–2004. data technology (IT) and business process
outsourcing services (BPO) on which India’s recent growth has relied are not any doubt
high–productivity activities with convergence dynamics which will be even stronger than in

30
Supra note 3 at 4
manufacturing. However, these are extremely skill–intensive sectors, unable to soak up the
overwhelming majority of the Indian work force that is still poorly educated.

CONCLUSION-

While India has had a favorable growth story due to structural changes, the expansion
couldn't be complete due to many impairments. India ranks 183rd in handling construction
permits as per Ease on Doing Business Index; and 178th in implementing contracts
(Confederation of Indian business and KPMG, 2014); these two are usually the options that
outline basic capabilities of any economy. whereas varied summits and ample tax advantages
given by the government have leveraged Indian growth, the general growth or the property
growth may only be achieved if basic capabilities, like education, infrastructure and
governance, are accomplished within the economy as a full.

The major focus of make in India campaign revolves around job creation and skill
improvement. The reforms in these acts if enforced considering its advantages to all or any
the stakeholders will result into a lot of job creation and availableness of skilled pool of
labour. The amendments in Factories Act with respect to transgenders and ladies have
multiplied the scope of job creation for each. Moreover, the Factories Act, 1948 (Draft) has
highlighted the importance of message, that is, an employer shall act as a counsellor for the
workers; such guidance rounds can facilitate recognizing issues of stress and its impact on
overall productivity. the government has initiated this reinvention by introducing
amendments in certain labour laws. One such positive step is within the direction of
developing skilled labour within the market by inclusion of provision within the
apprenticeship amendment Act within which the authority has been transferred from the
hands of state to the employer. It becomes employer’s duty to develop needed skills in their
apprentice. the government will encourage ‘skill enhancement’ by incentivizing these
employers. the government will incentivize employers by introducing awards or rewards for
the employers who mentor their apprentice as per the requirements of their staff. A
committee/supervisor shall be appointed to supervise the same. The planned amendments in
the Factories Act, 1948 (Draft) describes a provision on the rights of the workers. the
provision covers bound aspects like the employee ought to be trained below the industrial
plant premise for the health and safety measures. The employer shall be held accountable to
conduct mentoring sessions for the employees (Ministry of Labour and Employment, 2015b).
Such practices if enforced would end in skill improvement and higher performance.
However, if we glance into the present trends in job creation, the employment survey
conducted by the Ministry of Labour indicates decline within the first quarter of the fiscal
year 2015–2016. As per the survey, there has been a decline of net 43,000 jobs in numerous
sectors (refer Appendix 6 for sector-wise knowledge on job creation) within the first quarter
of the fiscal year 2014–2015. the first quarter of the fiscal year 2015–2016 showed a decrease
of 17,000 jobs within the textile sector; 18,000 jobs in automobile industry; 5,000 jobs within
the IT/BPO sector; 6,000 jobs in loom jobs; 3,000 jobs in gems and jewellery; and 2,000 jobs
within the transport sector. The facts are quite stunning because the employment of the
leading sectors in previous year, that is, textile and IT/BPO sectors, has visaged a lucid
decline within the current year. These figures might act as shells to labour unions that are
criticizing labour reforms projected by the NDA government. The survey additional disclosed
that the main reason behind the decline within the variety of jobs is that the fall within the
number of temporary employees and not permanent employees. whereas on the one hand
permanent employment has noticed a rise of 30,000 jobs, on the other hand, contract
employment has noticed a decline of 73,000 jobs within the first quarter of the fiscal year
2015–201631.
At a glance, the Make in India scheme introduced by the government looks business friendly
and easy dwelling within the economy. But the government has to create awareness among
the citizens about the long-term results of the schemes or how it focuses on attracting foreign
investors within the economy. Major focus has to be put on letting the people know about
how these schemes would help and develop the Indian economy. Considering the statistics
stated earlier it can be noted that the Make in India project will prosper the development of
business’s through diversification and expansion in India as well as attract foreign investment
within the country. While these amendments have been made It remains to be seen if Indian
growth story is that of endogenous growth, with employer, worker and government working
along to act as workforce; or is it another fragmented story of employer–employee divide.
The challenge lies in effective implementation of well - intended plans.

31
Id at 12