The liberalisation of India's labour laws within the National Manufacturing Policy 2011: where business power and social policy collide

Abstract

Following formal economic liberalisation in 1991, business, in particular big business, has gained increasing access to and influence over policy decision-making in India. Industry has been an outspoken critic of national labour laws and has lobbied extensively for greater labour market flexibility. While business has not been successful in influencing “official” labour reform at the national level, it was able to influence labour policy within the National Manufacturing Policy 2011, which curtailed labour protections and implemented “hire and fire” policies. Utilising qualitative data from 40 face-to-face interviews with policy stakeholders in New Delhi, India, this paper aims to explore how business was able to influence labour reform within this policy as well as underscore the wider social welfare implications that may follow. It will be argued that the ability of business to dictate labour reform, while strong, is somewhat variable as competing factors serve to constrain business influence. Furthermore, the extent to which labour laws are hindering manufacturing investment is widely debatable. Nevertheless, curtailment of labour protections, as afforded in this policy, will have a widespread and damaging impact on workers. While the policy promises to empower rural youth, provide gainful employment, and enable growth to become more sustainable and inclusive for its citizens, it is questionable whether these goals can be achieved alongside the curtailment of labour protections.