“India's labour market is over regulated. India's rigid labour laws are hurting India's growth... Flexible labour laws will help both organised and unorganised sector,” Basu said at an World Bank event.
He said there was a need for flexibility in labour market even as there exist regulatory framework.
“If we will create legal environment, there would be much demand for these workers...so we need regulatory framework but we need greater flexibility in labour market. But we don't want completely free labour market,” he said.
Labour reforms have been pending in India for long. Amendments to various labour laws have been awaiting Parliamentary approval. India has plethora of labour laws dealing with trade unions, provident funds, industrial disputes and industrial establishments.
India's economic growth rate has fallen to a nine-year low of 6.5 per cent in 2011-12. In the first (April-June) quarter of the current fiscal, the growth has slowed to 5.5 per cent.
As per the estimates of the Reserve Bank the economy is likely to grow by 5.8 per cent in 2012-13.
Basu was earlier the Chief Economic Advisor in the Ministry of Finance, before being chosen as the chief economist by the World Bank.
Basu further said manufacturing jobs are gradually moving from developed countries to developing economies.
“With new technology and new innovation, jobs move around the world...This is to remind industrial countries to not to indulge in protectionism. It is bad for rich country, it is bad for poor countries,” he said.
We have tonnes of Labor laws that is not sync with times and there are multitude of interpretations from the definition of term "worker" to " industry " in ID Act by supreme Court. All we need a concise one Labor Laws guide for all Acts imbibing all changes and recent judgments in the laws. Some sections in each Act should appropriately deleted. Can the ministry of Labour work on these lines and make an unambigous Labour laws that can be implemented with ease.
these days the labour wages are not equal , onsome of the places its high n other where its very low.
Labour laws are in fact very lax in India.Go to Germany and check.India is NOT going to default on world bank loans.We will just refuse to pay.
Insteade it is the labour law which has been the only safe-guard available to employees of rapacious business houses. And it is employees (and citizens) who constitute India and not business houses. If the labour law is relaxed, bonded labour will be back in full swing, as it is already in IT sector where labour law is relaxed for most firms.