UP moots key labour reforms to come on par with other industrialised states

The Adityanath government has set the target of UP hitting a $1 trillion economy by 2024. Photo: PTI
To improve the ease of doing business climate, the Uttar Pradesh government is working on key labour reforms to bring it at par with other industrialised states such as Maharashtra and Gujarat.

While the government is studying best labour-related practices in other states, it is also in the process of implementing the ‘reform action plan’ framework of the Centre, UP infrastructure and industrial development commissioner Alok Tandon told Business Standard here.

"The government is already working on the labour reforms agenda and it would soon be placed before the state cabinet for approval," he informed.

He said labour reforms were an ongoing process and the state industrial development and labour departments were proactively engaged to resolving such irritants faced by the industry.

Since the Adityanath government has set the target of UP hitting a $1 trillion economy by 2024, in line with Prime Minister Narendra Modi’s vision of India become a $5 trillion economy by that year, the state has been working on a slew of measures, including tweaking its policies to attract investment.

At the recent CII’s ‘UP Economic Summit’ here, industrialists had urged the Adityanath government to do labour reforms, especially with regards to the beleaguered small and medium enterprises (SME), so that they could better face market competition, especially during the economic slowdown.

The key demands of the SMEs are the provision of fixed-term and contractual labour so that they could exercise control on their fixed costs, and pare expenses and production according to the market demand.

At the same time, the process of collecting statistics pertaining to labour and employment in the state has traditionally been sloppy.

However, the state government has so far taken some steps to liberalise labour laws, including the raising of the ceiling from 100 to 300 workers for the sick units to exit without seeking a special certificate from the labour department.

Besides, the ceiling has also been raised from 10 to 20 workers and from 20 to 40 workers for units without and with power supply respectively for mandatory registration with the labour department.

Another major reform is the increase in ceiling for mandatory registration of firms for ESI and pension records from 20 to 50 contractual labour.

According to an estimate, UP has nearly 15,000 industrial units employing more than 25 workers, while nearly 85 per cent of the units have less than 300 workers.

However, there are labour related issues which have yet not been addressed, such as the provision of overtime for workers. The current state laws restrict workers to work overtime beyond a certain limit even if they are willing to earn additional income. Although, the state has relaxed the overtime norms to some extent, yet the industry has been seeking greater flexibility.

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