Distrust of employers is bred into Indian policy

News Excerpt:

Jan Vishwas Bill 1.0 recognised the distrust issue of employers regarding regulatory burdens in labour laws but couldn’t do enough. A Jan Vishwas 2.0 aiming to accelerate job creation is needed.

Excessive regulations in the context of employer-related labour laws:

  • The Factories Act 1948, read with 58 rules, contains more than 8,682 imprisonment clauses. 
  • Other simpler laws: 
    • The Legal Metrology Act, 2009, read with 29 rules, has 391 imprisonment clauses; 
    • Electricity Act, 2003, read with 35 rules, has 558; 
    • Motor Vehicles Act, 1988, read with nine rules, has 134. 
    • Overall, there are 25,000+ employer jail provisions, of which 5,000+ arise from central legislation.
  • The regulatory burden, including thousands of compliances and filings:
    • Leads to corruption as civil servants and political leaders misuse the loopholes in the labour laws for personal gain.
    • Punish the high-productivity enterprises that pay high wages by combining technology, capital, and skills and promote informal enterprises.

Role of Jan Vishwas Bill in tackling the employer distrust regarding labour laws:

  • Jan Vishwas Bill 1.0 tackled the issue with:
    • Innovation- Single law amending many laws
    • Judgement- Keeping “good” jail provisions that deter or deliver consequences for bad behaviour while eliminating “bad” jail provisions that discourage good behaviour.
    • Stamina: constructing the list of 113 “bad” jail provisions eliminated for employers by asking each central ministry to reflect on their criminal provisions and voluntarily surrender the bad ones.
  • But only about 4% of the 678 Central Acts that matter to employers were touched.
    • Consequently, only 2% of 5,239 jail provisions in central legislation were removed by Jan Vishwas.

About Jan Vishwas (Amendment of Provisions) Act, 2023:

  • It aims to decriminalise around 180 offences across 42 laws governing environment, agriculture, media, industry and trade, publication, and other domains that create barriers to the ease of doing business in the country. 
  • It converts several fines to penalties, meaning that court prosecution is not necessary to administer punishments. 
  • It also removes imprisonment as a punishment for many offences.

Way Forward:

  • There is a need for Jan Vishwas 2.0 to implement a new strategy for filtering decriminalization that shifts from retail (ministry’s volunteering) to wholesale (a positive list).
  • A government committee should identify criteria where jail for employers is merited, like harm to others, theft from employees, etc. 
    • Subsequently, every central ministry must remove all the 5,000+ jail provisions that do not meet the committee’s criteria.
  • A fertile habitat for job creation hardly implies zero compliance, filings or jail provisions.
  • Excessive regulatory burden hurts productive and compliant employers which can be reduced through civil service reform.
  • A new wholesale strategy for amendments to the Jan Vishwas Bill will deliver lower corruption, higher wages and productive enterprises.

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