State Intervention and Labour Market in India: Issues and Options

Mukherjee, Dipa (2005): State Intervention and Labour Market in India: Issues and Options. Forthcoming in: State, Labour and Development: An Indian Perspective, (ed) K K Bagchi, (forthcoming), Serials Publications, New Delhi

Abstract

State interventions into Labour policies in India are directed towards ensuring both job security and income security. In this paper we look at likely impact of such policies. The laws are found to serve the organised workers primarily while large masses of unorganised workers are without any security. To escape legislations, employers have substituted labour by capital, hired casual workers, and set up ancillary units. Consequently, output elasticity of employment has consistently declined and there is marked casualisation of workforce. Legislations have thus institutionalised and perpetuated labour market dualism. Reforms herein are necessary but should be implemented in a careful and phased manner to avoid deteriorating conditions in both the sectors in the name of uniformity. Linking retrenchment with Area Regeneration Programmes; upgrading employability quotient through training; allowing employers to transfer workers between units; providing easy credit and technical consultancy; and cooperative formation would help the workers.

• Item Type: MPRA Paper
• Institution: Dept of Economics, Narasinha Dutt College
• Language: English
• Keywords: Labour; State Intervention; Unorganised Workers; Employment Policy
• Subjects: J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J38 - Public Policy; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J21 - Labor Force and Employment, Size, and Structure; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J23 - Labor Demand; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage Differentials