Government must provide social security to implement flexible labour laws: Uday Kotak

Uday Kotak, who took over as the new President of Industry body Confederation of Indian Industries (CII) this week, says private investment in the country has been lagging in the last several years due to a variety of reasons. We need to try and see the reasons which will spur investment back, because only investment can create sustainable jobs in the country.

New Delhi: There is a need to reform labour laws to attract investment in the country but States must simultaneously improve social security of migrant workers, said Uday Kotak, Managing Director of Kotak Mahindra Bank, in response to a question by ETV Bharat.

Several states like Uttar Pradesh, Madhya Pradesh, Gujarat, Rajasthan, Punjab and Maharashtra last month amended their labour laws to increase the statutory limit on the maximum number of working hours permitted in a week, and also suspended several other labour welfare provisions.

Ostensibly, it was done to attract the foreign investors that have been looking to relocate their manufacturing facilities outside China due to sour relationship between some western countries and the Chinese government.

Uday Kotak, who took over as the new President of Industry body Confederation of Indian Industries (CII) this week, says private investment in the country has been lagging in the last several years due to a variety of reasons.

“We need to try and see the reasons which will spur investment back, because only investment can create sustainable jobs in the country, therefore there has to be an emphasis on reforms,” Uday Kotak said in his first press conference after taking charge of the CII.

Due to lockdown measures, he addressed the media queries through a video link.

Flexible labour laws, that give freedom to employers to hire and fire the staff easily, have come under heavy criticism as some States implemented them at a time when millions of migrant labourers were forced to walk for several hundreds of kilometres to reach the safety of their native places following a nationwide lockdown announced by Prime Minister Narendra Modi in March this year.

Prime Minister Modi announced a complete nationwide lockdown from March 25 to slowdown the community spread of highly infectious novel coronavirus (SarsCoV-2) that has killed more than 6,000 people in the country and over 3,90,000 people worldwide in less than last 6 months.

However, the closure of industry and businesses deprived hundreds of millions of migrant workers of their livelihood, making their sustenance in cities virtually impossible. These developments, coupled with the lack of any social safety provisions, forced them to walk back home as all the modes of public transportation were suspended due to the lockdown.

This unprecedented human tragedy shook the conscience of the nation and highlighted the lack of a social safety net for its hard-working but most vulnerable section of the society.

“As we go towards a more open economy on labour there has to be a social security safety-net and States need to have that in place simultaneously,” Mr Kotak noted.

“Therefore it is two sides of the same coin in many ways. We need change to get investment back, but we need to create a social security network in due course for ensuring that there is a fairness to the workers as well,” added Mr Kotak.

Workers have a right to go back home

The newly appointed CII President said no one should try to prevent migrant workers from going back to their native places.

“If it is the wish of migrant labourers to go back. It's completely up to him and no one has a right to stop them, we at CII respect that,” he said.

The banker said industry will have to win back the confidence of migrant workers to ensure their return as they have faced neglect in the cities and metros for several years.

“It is due to years of neglect in many urban cities and metros. We have created slums. We have created a very poor quality of life that is due to a very short term policy orientation by some businesses, and hire and fire policies,” Mr Kotak noted.

Industry needs to do better this time: CII

Uday Kotak said the problem of shortage of workers in some industries is due to the quality and conditions that were earlier created by some businesses.

He said the existing system will have to undergo a fundamental change and provide migrant workers reasonable facilities in cities to make it worthwhile for them to ensure their return.

“If we are looking to restart India then we need to do it better this time both in urban and rural India,” he added.

(Article by Krishnanand Tripathi)