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Narendra Modi plans to free up India’s giant labour force
Socialist employment restrictions will be swept away.
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India is attempting a major overhaul of its labour laws that have held back expansion of businesses such as garment manufacturing.
PHOTO: REUTERS
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Look at Indian data and strange patterns start to emerge. Why, for example, do over 95 per cent of industrial firms employ fewer than 10 workers, and many others exactly 99? Why are garment factories two-thirds of the size, on average, of rivals in Bangladesh? And why is 42 per cent of the manufacturing workforce contract labour, hired to perform specific, limited tasks?
Answers to such puzzles are often found in the country’s Byzantine labour laws. For decades they have seemed unreformable because of the potential for political backlash. But on Nov 21, Mr Narendra Modi, the Prime Minister, announced the biggest overhaul since India’s independence from Britain in 1947.
