The Hindu Business Line : Industry calls for changes in Factory Act, labour laws

THE industry has called for an urgent shift from a "persecution mind set" to a "guidance-oriented mindset" to free the domestic manufacturing sector from the clutches of the "Inspector Raj".

A FICCI Survey reveals that the Indian manufacturing sector continues to be throttled by the "Inspector Raj" with as many as 37 inspections annually by Government functionaries who are armed with sweeping powers of arrest, imprisonment, sealing and stopping of operations and to impose stiff penalties.

"Corruption is the order of the day," the Survey of over 30 companies across a range of manufacturing sectors such as engineering, high-tech, automobiles, chemicals, textiles and steel points out.

Against this backdrop, the industry has called for immediate steps to resolve the situation created by empowering acts such as the Factories Act and the Labour Laws.

For instance, the industry has sought amendments to the Factories Act to make the licence renewal requirement once in three years, inspections once in two years, easing of the restricted number of working hours, self certification and prosecution only in case of glaring evidence of management callousness.

According to FICCI, the Labour Laws need a thorough overhaul by accepting the recommendations of the Second National Labour Commission. These include re-grouping the existing set of labour laws into 4 or 5 groups pertaining to industrial relations, wages, social security, safety, welfare and working conditions, doing away with the requirement of prior permission for lay-off and retrenchment in an establishment of any employment size after giving two month's notice or notice pay to workers.

Besides, the industry wants the definition of `retrenchment' to cover only termination of employment arising out of reduction of surplus workers in an establishment.

Section 64 iv of the Labour Laws should be amended to raise the total number of hours of overtime of workers from 50 to 150 for a continuous process industry. Further, the rate of overtime should be same as ordinary rate of wages instead of the existing twice the ordinary rate.

It has also called for extending the period of renewal of licence and inspections under a host of Acts such as the ESI Act, Electricity Act, Pollution Control Rules, Weights & Measures and Explosives Act.

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