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India Ranks 61 in Labour-Employer Relations
Aug 31, 2014

India ranks poorly in employee-employer relations standing at 61st position, which is far behind countries like Mexico, Thailand and the Philippines, according to a report by Morgan Stanley. On the metric of cooperation in labour-employer relations India ranks at 61, behind Mexico (44), Thailand (37) and the Philippines (34).  China is just ranked ahead of India in this regard at the 60th spot, it said. 

India's demographic trend is likely to be one of the best among large countries in the world, however, the country's track record of converting this development into an opportunity is mixed so far. The country's track record in terms of creating productive jobs has been slow so far. One of the key issues stifling productive job growth is labour market regulations in the country apart from other factors such as inadequate physical infrastructure. The most contentious issue with regard to labour regulation in India is flexibility to lay off workers if a firm employs more than 100 workers, because it needs to notify and take permission from the concerned government administration, it pointed out.

Looking at labour laws across countries, most other nations do not have such a stringent requirement of prior approvals and consultations, apart from Pakistan and Sri Lanka.

According to the World Bank's index on hiring and firing practices, Bangladesh ranks at 25, China at 28, and Pakistan at 35 compared to India's rank of 52. In labour market efficiency ranking among 148 countries, India is placed at 99th spot compared to China (34), Brazil (92) and Philippines (99).

The report said, India needs to amend provisions which allow outsiders to be office bearers. Currently, one-third of the office bearers or five can be outsiders.


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