Labour Market Reforms in India- Some Issues

Abstract

It is argued that but for restrictive labour laws that create inflexibility in the labour market,the Indian economy would have experienced a higher growth of employment. On the other hand, thisview is vehemently contested by trade unions and many other economists. This paper shows that theIndian labour market is quite flexible despite so-called restrictive labour laws. However, at the sametime, Indian labour laws are so numerous, complex and even ambiguous that they promote litigation rather than the resolution of problems related to industrial relations. A comprehensive view onlabour market reforms is required, one that addresses the needs of both employers and workers. The author recommends simplifying and rationalizing the complex and ambiguous extant pieces of labour legislation into a simple code that allows for labour adjustment with adequate social and in come security for the workers.