Business-friendly policy at labour’s expense

News that India jumped 13 points to rank second only to China in the Global Retail Development Index brought cheers to the business world and policymakers. India is slowly progressing in the World Bank’s ease of doing business ranking. The World Bank, recognising the importance of decentralisation and competitive federalism, in 2015 initiated the exercise of ranking the States in India.

Not surprisingly, this has caught the attention of the chief ministers who are in a race to scale up their ranking. Not to be outdone, the think-tank of the Government last year set up an official initiative for ease of doing business in States on the labour front. This has led to competitive reforms of labour laws. There are other exercises too to measure business friendliness. These ranking exercises are watched keenly by policymakers and industry. There is no consideration for labour welfare or rights.

The ease of doing business exercises implicitly or explicitly argue for deregulation and reward countries/States that streamline, relax or deregulate labour regulatory policies and governance. A flood of these exercises has pushed trade unions on the backfoot in the corridors of lobbying, policymaking, and in the labour market. Also philosophically, ‘flexibility’, a pro-market ideological term, is seen to aid growth, which is opposed by trade unions; this is taken to amount to ‘rigidity’ which is perceived rightly or wrongly as ‘anti-growth’! So in a basic sense, trade unions are on the ‘wrong side’. There is no countervailing narrative on labour rights to tell the policymakers. The ratification of ILO conventions (international labour treaties) is a marker of labour rights, though the yawning gaps between ratification and field realities cannot be ignored.

The International Trade Union Confederation (ITUC) has been collecting data on violations of trade union and collective bargaining rights for more than three decades. The exercise is contextualised in Decent Work and Core ILO Standards. These rights codified are fundamental to achieving core and other labour standards and violations amount to a fundamental weakening of the collective power of the working class and dilution of democratic rights.

The Global Rights Index (GRI) seeks to capture the degree of respect accorded to labour rights by government and industry, and ranks 141 countries against 97 internationally recognised indicators. Suffice it to say that the GRI is subject to rigour and hence is as credible as others. The countries are rated from 1 to 5+ and labour rights violations are higher as we move up — 1 being the best rating and 5 the worst.

The GRI should interest India because even as it’s working on the ease of doing business index, its labour rights violations record is worsening. India, along with Cambodia, Iran and Turkey, joined the ‘rogues gallery’ of ten worst countries for labour rights this year. It has been shown that countries with a good record of ease of doing business fare worse on the human rights front (for example, Saudi Arabia and Qatar). The drive for flexibility and incessant lobbying by pro-market institutions are forcing hapless governments to adopt measures to provide flexibility to business, which invariably weakens labour rights. It is not surprising that the conventional democratic space for trade unions is narrowing and a sense of insecurity is enveloping the working class.

According to the Global Slavery Index (by Walk Free Foundation), India accounts for almost 40 per cent of modern forms of forced labour, which simply means that persons are trapped in a job with no scope for free movement out of it. According to Child Rights and You, the law allowing children to work in family occupations after school hours increases their potential risk of being employed on a full-time basis with little or no education. India has ratified important and relevant conventions of the UN and ILO, and is committed to ensuring basic labour rights. The Constitution also provides for the same. Simply put, ease of doing business measures are possibly inversely related to decent work and labour rights.

The writer is a professor at XLRI, Jamshedpur

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