The HINDU Notes – 15th May 2020 - VISION

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Friday, May 15, 2020

The HINDU Notes – 15th May 2020

📰 Migrants to get free foodgrains

Rs. 3,500 cr. of second tranche of stimulus to be spent on those without ration cards

•A major focus of the second tranche of the economic stimulus package announced by Union Finance Minister Nirmala Sitharaman on Thursday is to provide free foodgrains for the next two months to migrant workers who do not have ration cards. The Centre will spend Rs. 3,500 crore for this purpose.

•Quoting numbers from State governments, Ms. Sitharaman said there were an estimated eight crore migrant workers who had been housed in government- and privately run relief camps across the country since the lockdown.

•However, economists said this intervention was too little, too late, and that the free foodgrain provision should have been universalised to deal with widespread distress.

Credit facilities

•Apart from measures for migrant workers, the second tranche announced by the government included an extension of credit facilities for urban housing, street vendors and farmers and an interest subvention scheme for small businesses.

•The move to provide free foodgrain for migrant workers is an extension of the Pradhan Mantri Garib Kalyan Yojana, announced on March 27, which provided an additional monthly free rice or wheat allocation of 5 kg per person, and 1 kg of pulse per household from April to June to the 80 crore people with ration cards covered by the National Food Security Act (NFSA).

•Over the past month, migrant workers and others without ration cards have struggled without access to this free food. Many who have lost their livelihoods are forced to walk home to their villages.

•“For those who are non-card holders, meaning they are neither under the NFSA nor are they holders of any State-level cards, they shall be given [this benefit]...And if the person is remaining without card, he can also get it,” Ms. Sitharaman said.

•“We are engaging with the State governments to make sure that they know where these migrants are, they can approach them and give them. Because most of these migrants who have no cards are staying in camps run either by the government or by NGOs, and therefore, based on a rough assessment given to us by all the State governments, we think there are about eight crore migrants for whom benefit will reach through this free food grain supply,” she said, adding that this is an initial assessment, and that numbers may change.

•The Finance Minister added that by August 2020, the ration card portability scheme will allow 67 crore NFSA beneficiaries in 23 connected States to use their cards at any ration shop anywhere in the country, allowing migrant workers to access subsidised food away from their home villages. The scheme would cover all beneficiaries by March 2021, she said.

•For returning migrants who have no means of livelihood back in their home villages, Ms. Sitharaman said State governments had been directed to enrol them under the Mahatma Gandhi National Rural Employment Guarantee Act.

📰 India non-committal on talks with Taliban

Govt. says ‘our traditional ties with people of Afghanistan will continue to guide our policy’

•India will “continue to be guided” by its friendship with the Afghan people, said the government, remaining non-committal on renewed questions of whether it would open direct talks with the Taliban.

•“We have our own perspectives on Afghanistan, and our traditional and neighbourly ties with the people of Afghanistan will continue to guide our Afghanistan policy,” a government source said, when asked about the suggestion by U.S. Special envoy for Afghanistan Reconciliation Zalmay Khalilzad that India should speak directly to the Taliban.

•In an interview to The Hindu last week, Mr. Khalilzad said he favoured India-Taliban talks, the first time a U.S. official had openly made that suggestion.

•“It is for India to decide its role, but I do think engagement between India and all the key players in Afghanistan ... is appropriate given India’s regional and global position. India is an important force in Afghanistan and it would be appropriate for that [India-Taliban] engagement to take place,” Mr. Khalilzad said.

•External Affairs Ministry officials declined to comment on whether India would change its long-held position of dealing only with the elected government in Kabul, while considering the Taliban a terrorist organisation backed by Pakistan. While India has not opposed the U.S.-Taliban talks, it has not been a part of the reconciliation process, and has pushed for an “Afghan-owned, Afghan-led and Afghan-controlled” process for peace.

•The comments by Mr. Khalilzad have led to a renewal of interest in whether India will shift its stand on talks with the Taliban, despite continued violence by the group. “There is no doubt more pressure [on the Indian government] to engage with the Taliban, but India has always dealt only with the authority in power, and talks with the Taliban would be premature at this point.” former diplomat Asoke Mukerji told The Hindu. Mr. Mukerji, who served as Indian envoy to the United Nations (2013-2015), said if talks with the Taliban were offered, then they would have to be on New Delhi’s terms, including Taliban commitments on India’s strategic projects, and Chabahar port, as well as the safety of minorities, women’s education, and most of all on terrorism, where no Afghan soil could be used by anti-India groups. He suggested that the Taliban could make progress with India if it offers to bring those of its officials who colluded with the terrorists on board IC-814 in December 1999, to justice.

📰 India reminds China of claims over Gilgit-Baltistan

Beijing has teamed up with Islamabad to build Diamer-Bhasha dam there

•The recent incidents of face-off between the troops of India and China are neither “co-related” nor have any connection with other global or local activities, Army Chief Gen. Manoj Naravane said on Thursday. The statement was supplemented by official spokesperson of the Ministry of External Affairs Anurag Srivastava who reminded China about India’s claims over Gilgit-Baltistan where China has teamed up with Pakistan to build the Diamer-Bhasha dam.

•Mr. Srivastava said both sides understand the importance of maintaining peace. “India and China attach importance to tranquillity and it is essential for the overall development of bilateral ties.”

•He however reminded China about India’s claims over the territory of Gilgit-Baltistan under Pakistan’s control. “Our position is clear. The entire territory of Jammu and Kashmir is part of India.”

•The assertion is important as it was made a day after Power China, one of the biggest Chinese power companies, received a contract to build the Diamer-Bhasha dam which once completed will allow Pakistan to use the waters of the Indus for irrigation. Islamabad claims that the dam will help reduce downstream flood by the Indus.

📰 Are India’s labour laws too restrictive?

For employers, availability of skilled workforce and worker-management ties are more vital

•Some State governments including Uttar Pradesh (U.P.) and Madhya Pradesh (M.P.) have proposed ordinances to exempt manufacturing establishments from the purview of most labour laws. In a discussion moderated by Suresh Seshadri , Amit Basole and K.R. Shyam Sundar look at the backdrop for this move and consider what lies ahead for the country’s labour and industrial relations. Edited excerpts:

Are the ordinances justified given the need to both preserve and create jobs in the wake of the COVID-19 crisis?

•K.R. Shyam Sundar(KRSS):First, let me express my profound sense of shock [at the] changes or even disruptions that M.P. and U.P. governments have introduced on the pretext of creating employment and attracting investment. This is a very dangerous kind of political legitimacy that has been invoked.

•There are three issues here. The Constitution provides a number of basic rights, and, under the directive principles of state policy, a number of assurances. Now, the kind of changes that have been made, they potentially will hurt, will dis-enable the realisation of the constitutional objectives. Second, the facility of the concurrent subject has been abused. And, we should bear in mind that the national codification and the labour law reform process is on. What is the unholy hurry on the part of the State governments to do this? But, I have an explanation: given the COVID situation and the national lockdown, the trade unions that are already weak cannot mobilise their forces and conduct any kind of a State-level or national struggle. This is a clear case of vulnerability, which the state has exploited.

•Now, whether the labour laws constitute rigidities, the answer, in a cautious sense, is ‘indecisive’ because there are research studies on both sides. The World Bank survey, 2014, asked employers... and the employers did not rate labour law regulations as [among] the top five or seven or 10 irritants. For them, the availability of skilled workforce and cooperative labour-management relations were far more important than flexible labour laws. So, the gravest implication of these labour laws [changes] is that it will create industrial discontent, even a kind of labour unrest, which will stifle any hope of achieving industrial progress. And, employers will not benefit because these provisions will hurt labour welfare and thereby labour efficiency.

•Amit Basole (AB):One must remember in all of these discussions that India still remains, what economists call, a labour-surplus country. Particularly at the lower ends of the labour spectrum where less education is required, there is usually an excess supply of labour which gives more bargaining power to employers. So, the responsibility of the state in such a context is to safeguard the interests of labour through legislation because the market does not give them the necessary protection.

•Second, on the question of how they act as constraints or barriers: of course employers will always want to have a freer hand in managing labour relations, setting wages, conditions and so forth. That just follows from the nature of the capital-labour relations. That does not mean that the state should allow them that free hand. Will employers hire more workers if they are given a freer hand? Possibly, if certain other conditions are also met. [If not], there is no reason to believe that labour laws by themselves will do anything to improve job creation.

•Of course, they will make working conditions worse, and life worse for workers. But, on the plus side, will you get any benefit out of a total increase in employment? That is not clear. The well-known things that act as constraints on job creation [include] the overall health of the economy, the level of demand in the economy. What is people’s purchasing power? Are their wages rising or not? What is the stability of the business climate? Is the state trusted by businesses, small and large businesses, to deliver on its promises? What are the export conditions like? Is the government following a consistent policy, sending out the correct and consistent signals on what it wants to promote and what it doesn’t want to promote? All of these macro policies, industrial policies, trade policies govern the climate of job creation, in addition to the overall health of the economy. If none of that is in place, a simple tweaking of the labour laws basically worsens working conditions and doesn’t achieve much else.

Was lack of flexibility an issue retarding manufacturing and job creation even before the pandemic?

•AB:There is also an issue of diversity of employers when we talk about manufacturing. We’re talking about some very large companies. We’re talking about small and medium companies, we’re talking about very small workshops also. And they all experience the government and the labour regime differently. It is certainly possible that at the lower end of the manufacturing spectrum, the labour laws have been arbitrarily and extortionately imposed. There is always a possibility that bribes can be extracted in the name of labour laws not being covered, making life difficult for employers, which creates incentives for them to double book, keep workers off the books. So, do the labour laws act as a constraint on good job creation? In this particular sense, yes, because they do incentivise some employers to evade showing workers on their books, for fear that even if they’re following laws, the state may come down on them on some pretext or the other.

•Now, to use that to extend it to the entire manufacturing sector, to vastly productive industries, to large-scale manufacturing, where we know that the labour share of income has been precipitously declining, productivity has been rising, over there can we continue to use the labour laws argument to give this bigger and bigger contract labour force, create precarious working conditions and widen the rift between wages and productivity? We shouldn’t be doing that. There, we are creating, actually, macroeconomic problems for the country in addition to making working conditions worse. So, there has to be a little bit more of a nuanced understanding of where exactly labour laws are a constraint and what can the government do to make life simpler there, while not going beyond a non-negotiable floor.

Industry is reported to have urged the Centre to mandate the return of workers and warn labour of penal consequences. Is this implementable and what does it bode for employer-employee relations?

•KRSS:The state and the employers could ask the employees to report for work, only if two conditions are met. Given the imposition of lockdown and suspension of public transport, there must be enabling conditions like resumption of public transportation or private provision of transportation by the employers... [Second] COVID SOPs [must be] effectively implemented at the workplace because the workers could withdraw from a potentially hazardous workplace. And third, there must be work. If these three conditions are satisfied and still the workers do not report, action can be taken against them, as per the company rules or agreements or the standing orders under the Industrial Employment Standing Orders Act, 1946. But, the workers should be given a fair hearing.

Do these ordinances risk compromising workers’ rights, including safety?

•KRSS:So, the professed objective of ensuring occupational safety and security may not be realised for primarily two reasons. Both [ordinances] have frozen the conditions of work like lighting, temperature, dust and fumes and brightness... and there is every incentive for the employer to ignore [these conditions] given the labour market opportunistic behaviour. And these may lead to unsafe working conditions. Second, the extension of working hours. It is well known that long hours of work, repetitive work... deficient conditions of work, pose a considerable threat to occupational safety and health.

One justification spoken of is the need to make India a more attractive destination than China for setting up manufacturing plants.

•AB:Regarding competitiveness with respect to labour, it is true that a race to the bottom is a general accepted principle. It is ironic in a way in the globalisation period, that countries compete on low wages, and primarily on that sort of labour element, particularly the labour-surplus countries. But that said, those are again never the only factors when investment decisions are considered. Almost always, the overall business climate, the reliability of the state and its policies, the infrastructural situation, electricity supply, logistics and transport, the quality of labour and the skill of labour, human capital issues. All these things matter as much, if not more, than the level of wages and the laxity, or lack thereof of the labour laws. So, if we don’t do anything on the other fronts, and only expect that somehow, with the stroke of a pen, diluting labour laws will magically bring in investment then we are very sadly mistaken.

Given that job creation is crucial and that trade unions have been weakened, what lies ahead for our labour force?

•KRSS:During the financial crisis when the trade unions were taken into confidence by the employers, the trade unions were willing to offer concessions in terms of deferring increments, agreeing to regular overtime wage rate, or to work on a Sunday or to have some kind of structured lay-off systems. So, instead of making macro-level, uncalled for interventions, which are draconian, the governments should have held social dialogue and asked the trade unions: “Look these are difficult times, we need to create jobs, we need to get out of the COVID crisis, how can we go about it?” And then, if the trade unions set unreasonable demands, then there is a call for introducing certain directives.

•AB:At this point, in the immediate months to come, the responsibility actually lies squarely on the government to restore some health to the labour market... because we were in a slowdown, even going into the lockdown. [P]rivate investment may not pick up. Jobs also may not come back. In the immediate term, there is a necessity for the government to come out with a fairly strong fiscal package that creates optimistic conditions by providing employment to people, something that tightens the labour market a little bit, puts money in people’s pockets, and creates demand in the economy; the private investment then will follow as it usually does. And, once that happens, once there’s some health restored in the economy and economic growth has been restored, then, a lot of these things are discussable: we can go back to the labour reform issue.

📰 Stop the return to laissez-faire

Labour laws are civilisational goals and cannot be trumped on the excuse of a pandemic

•Through the public health crisis created by the COVID-19 pandemic, we are witness to another massive tragedy — of workers being abandoned by their employers and, above all, by the state. The workers’ right to go home was curbed using the Disaster Management Act, 2005. No provisions were made for their food, shelter, or medical relief. Wage payments were not ensured, and the state’s cash and food relief did not cover most workers.

•Staring at starvation, lakhs of workers started walking back home. Many died on the way. More than a month later, the Centre issued cryptic orders permitting their return to their home States. Immediately employer organisations lobbied to prevent the workers from leaving. Governments responded by delaying travel facilities for the workers to ensure uninterrupted supply of labour for employers.

•Employers now want labour laws to be relaxed. The Uttar Pradesh government has issued an ordinance keeping in abeyance almost all labour statutes including laws on maternity benefits and gratuity; the Factories Act, 1948; the Minimum Wages Act, 1948; the Industrial Establishments (Standing Orders) Act, 1946; and the Trade Unions Act, 1926. Several States have exempted industries from complying with various provisions of laws. The Confederation of Indian Industry has suggested 12-hour work shifts and that governments issue directions to make workers join duty failing which the workers would face penal actions.

•Thus, after an organised abandonment of the unorganised workforce, the employers want the state to reintroduce laissez-faire and a system of indenture for the organised workforce too. This will take away the protection conferred on organised labour by Parliament.

Colonial exploitation

•The move is reminiscent of the barbaric system of indentured labour introduced through the Bengal Regulations VII, 1819 for the British planters in Assam tea estates. Workers had to work under a five-year contract and desertion was made punishable. Later, the Transport of Native Labourers’ Act, 1863 was passed in Bengal which strengthened control of the employers and even enabled them to detain labourers in the district of employment and imprison them for six months. Bengal Act VI of 1865 was later passed to deploy Special Emigration Police to prevent labourers from leaving, and return them to the plantation after detention. What we are witnessing today bears a horrifying resemblance to what happened over 150 years ago in British India.

•Factory workers too faced severe exploitation and were made to work 16-hour days for a pittance. Their protests led to the Factories Act of 1911 which introduced 12-hour work shifts. Yet, the low wages, arbitrary wage cuts and other harsh conditions forced workers into ‘debt slavery’.

•The labour laws in India have emerged out of workers’ struggles, which were very much part of the freedom movement against oppressive colonial industrialists. Since the 1920s there were a series of strikes and agitations for better working conditions. Several trade unionists were arrested under the Defence of India Rules.

•The workers’ demands were supported by our political leaders. Britain was forced to appoint the Royal Commission on Labour, which gave a report in 1935. The Government of India Act, 1935 enabled greater representation of Indians in law-making. This resulted in reforms, which are forerunners to the present labour enactments. The indentured plantation labour saw relief in the form of the Plantations Labour Act, 1951.

Dignity through democracy

•By a democratic legislative process, Parliament stepped in to protect labour. The Factories Act lays down eight-hour work shifts, with overtime wages, weekly offs, leave with wages and measures for health, hygiene and safety. The Industrial Disputes Act provides for workers participation to resolve wage and other disputes through negotiations so that strikes/lockouts, unjust retrenchments and dismissals are avoided. The Minimum Wages Act ensures wages below which it is not possible to subsist. These enactments further the Directive Principles of State Policy and protect the right to life and the right against exploitation under Articles 21 and 23. Trade unions have played critical roles in transforming the life of a worker from that of servitude to one of dignity. In the scheme of socio-economic justice the labour unions cannot be dispensed with.

•The Supreme Court, in Glaxo Laboratories v. The Presiding Officer, Labour (1983), said this about the Industrial Employment (Standing Orders) Act, 1946: “In the days of laissez-faire when industrial relations was governed by the harsh weighted law of hire and fire, the management was the supreme master, the relationship being referable to a contract between unequals... The developing notions of social justice and the expanding horizon of socio-economic justice necessitated statutory protection to the unequal partner in the industry namely, those who invest blood and flesh against those who bring in capital... The movement was from status to contract, the contract being not left to be negotiated by two unequal persons but statutorily imposed.”

•Any move to undo these laws will push the workers a century backwards. Considering the underlying constitutional goals of these laws, Parliament did not delegate to the executive any blanket powers of exemption. Section 5 of the Factories Act empowers the State governments to exempt only in case of a “public emergency”, which is explained as a “grave emergency whereby the security of India or any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance”. There is no such threat to the security of India now. Hours of work or holidays cannot be exempted even for public institutions. Section 36B of the Industrial Disputes Act enables exemption for a government industry only if provisions exist for investigations and settlements.

No statutory support

•The orders of the State governments therefore lack statutory support. Labour is a concurrent subject in the Constitution and most pieces of labour legislation are Central enactments. The U.P. government has said that labour laws will not apply for the next three years. Even laws to protect basic human rights covering migrant workers, minimum wages, maternity benefits, gratuity, etc. have been suspended. How can a State government, in one fell swoop, nullify Central enactments? The Constitution does not envisage approval by the President of a State Ordinance which makes a whole slew of laws enacted by Parliament inoperable in the absence of corresponding legislations on the same subject.

•Almost all labour contracts are now governed by statutes, settlements or adjudicated awards arrived through democratic processes in which labour has been accorded at least procedural equality. Such procedures ensure progress of a nation.

•In Life Insurance Corporation v. D. J. Bahadur & Ors (1980), the Supreme Court highlighted that any changes in the conditions of service can be only through a democratic process of negotiations or legislation. Rejecting the Central government’s attempt to unilaterally deny bonus, the Court said, “fundamental errors can be avoided only by remembering fundamental values”, as otherwise there would be a “lawless hiatus”.

•The orders and ordinances issued by the State governments are undemocratic and unconstitutional. The existing conditions of labour will have to be continued. Let us not forget that global corporations had their origins in instruments of colonialism and their legacy was inherited by Indian capital post-Independence. The resurgence of such a colonial mindset is a danger to the society and the well-being of millions and puts at risk the health and safety of not only the workforce but their families too.

•In the unequal bargaining power between capital and labour, regulatory laws provide a countervailing balance and ensure the dignity of labour. Governments have a constitutional duty to ensure just, humane conditions of work and maternity benefits. The health and strength of the workers cannot be abused by force of economic necessity. Labour laws are thus civilisational goals and cannot be trumped on the excuse of a pandemic.