The Hindu Business Line : Laboured idea

THE GOVERNMENT PROPOSAL to exempt certain classes of establishments, notably information technology enterprises, and certain common work routines from the purview of the contract labour law would make little sense from a tactical stand-point of giving a thrust to labour productivity. According to the Labour Ministry's latest Annual Report, only 8.5 lakh employees are engaged by labour contractors in the organised sector against some two crore employed on a regular basis. This suggests that there is already considerable `intermediation' in employment through labour and service contracts for a variety of direct and indirect tasks in a business.

Indeed, the present law has been conceived of as a response to what the state perceived as an unhealthy trend in employment — engaging contractors to supply labour. It is to deal with this situation that the law currently allows the Government to ban the engagement of contract labour for specific tasks through a notification. But notifications have, over the years, been few — fewer than 50 till 2002 — and have covered mainly public sector enterprises. In fact, the Government no longer gives out this piece of statistics in its annual report. Anecdotal evidence suggests that `contractualisation' of employment is gathering momentum with both private and public sector units embracing it in a big way. That being so, all that the Government needs to do is allow the natural process to take full effect. The Government's legislative initiative would seem to be a case of a solution in search of a problem.

On the other hand, if in the Government's perception, there is far too much of departmentalisation of labour than is good for the economy and that some legislative trigger is needed for a structural shift, then its timing is poor. For the move is bound to run into a wall of political resistance. Such an enactment would needlessly raise the hackles of the Left parties at a time when its equation with the latter has come under some strain in the wake of the Government's vote against Iran on the nuclear question. Even some of its own allies in the United Progressive Alliance would find it difficult to support the Government on a legislative measure that does nothing to enhance its standing among the working class. The legislative proposal is certain to be a non-starter.

That there are efficiency gains to be had in slicing business processes into component parts so that work and its supervision can be farmed out to those who are best equipped to deliver them most efficiently is not in doubt. The BPO wave sweeping the West, and which has put India in a position of advantage, is nothing but an example of `contractualisation' of labour tasks. Rather than resist it, India would be well-advised to embrace it. Given the circumstances, the Government would be better off focusing on securing through legislative means better terms of employment for contract labour rather than seek ways to abolish it.

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