Dynamics of Reforms of Labour Market and the Industrial Relations System in India

Post-Independence the institutional framework including legal was characterized by high state intervention in the industrial relations system (IRS) as a complement to state intervention in the product market in consonance with the dynamics of economic planning. An elaborate legal framework comprising laws enacted during the colonial period and those legislated post-Independence determines the substantive and procedural rules of IRS. A dynamic IRS is one which carries out reforms of laws and institutions in consonance with the changing times. During the planned economic period, 1947–91, reforms to provide for statutory recognition of trade unions and of dispute settlement machinery were actively deliberated by Committees and the stakeholders. Similarly during the post-marketization of the economy, reforms to provide labour flexibility to employers have been actively deliberated by Committees and the stakeholders. But the State has not carried out any of the three reforms, primarily for ‘political’ reasons, even though it was committed to these reforms. The political reasons include protection of labour wings of ruling political parties or retainment of powers by bureaucrats and judges (as instrumentalities of the state) or apprehended political unpopularity by the ruling parties which could have electoral costs. The chapter seeks to unravel these political dynamics.