Several Indian states are now amending labor and land laws to attract investment in the post-COVID-19 era, especially targeting those companies that want to shift production from PRC or want to create a second line of supply chain.
Amending the Land Reforms Act of 1961, Karnataka government now allows firms to buy land directly from farmers. Previously, firms would get government allotted agricultural land.
The industries will still be required to seek permission from the revenue department. It will, however, be deemed approved if the deputy commissioner doesn’t raise red flags or clear the application within 30 days. Earlier, industries could get agricultural land allotted only through government agencies. The amendment was notified after the Karnataka governor approved the Karnataka Land Reforms (Amendment) Bill, 2020, that had been approved by the legislature in March. The April 27 gazette notification repeals the related Karnataka Land Reforms (Amendment) Ordinance 2019. On January 25, chief minister BS Yediyurappa had said the government would amend Section 109 of the Land Reforms Act to facilitate industry to purchase land directly from farmers.
“A three-year process now takes just about 30 days -- a major reform that we’ve been demanding for long. Tamil Nadu, Andhra Pradesh and Telangana have been allowing this for a while now. We are glad the CM understood our concerns. A lot of credit must go to the principal secretary of commerce and industries department and the industries minister,” CR Janardhan, president, FKCCI, said.
Recently, Uttar Pradesh government amended its labor law, exempting businesses from the purview of almost all labor laws for the next three years. Hire and fire is easy now.
The laws that are relaxed include those related to settling industrial disputes, occupational safety, health and working conditions of workers, and those related to trade unions, contract workers, and migrant labourers. However, Building and Other Construction Workers Act, 1996; Workmen Compensation Act, 1923; Bonded Labour System (Abolition) Act, 1976; and Section 5 of the Payment of Wages Act, 1936 (the right to receive timely wages), will remain intact for both the existing businesses and the new factories being set up in the state. The state government’s statement said that the decision is taken in the wake of losses incurred to businesses and economic activities.
Here is a brief snapshot of the changes in some states:
- Madhya Pradesh: Only one register and the return sufficient to take business license now instead of the requirement to fill 61 registers and 13 returns. Overtime allowed up to 72 hours and working shift increased to 12 hours from 8 hours. No inspection in firms employing less than 50 workers. In SMEs, inspection to take only with the permission of labor commissioner or in case of complaint.
- Uttar Pradesh: Labor laws relaxed for the next three years. No need to worry about inspection or enforcement, among others.
- Rajasthan: Increased working hours to 12 hours from 8 hours a day. Amended Industrial Disputes Act to increase the threshold for lay-offs and retrenchment to 300 from 100 earlier. Trade union recognition only after 30% membership (up from 15%).
- Maharashtra: Firms allowed to submit consolidated annual returns instead of multiple returns under various labor laws.
- Kerala: State government will facilitate new industrial licence application within a week if firms agree to complete formalities in a year.
- Punjab, Himachal Pradesh and Gujarat: Amended Factories Act to increase working time to 12 hours a day and 72 hours a week.
