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The Centre could tweak reforms in labor law and rapidly track its implementation to replace orders issued by three BJP-ruled states to ensure uniform regulations that provide stability for new and established businesses throughout the country.
A senior government official told ET that top policymakers have begun discussions on a system that will draw investors looking to move manufacturing to India.
“This is needed as multinational companies looking at relocating from China to India would prefer flexible central laws over state laws for uniformity of operations across different locations,” the official said.
Uttar Pradesh, Madhya Pradesh and Gujarat, ruled by the BJP, passed executive orders exempting new establishments from most labor regulations. Although all had allowed businesses to extend the shift hours from eight hours as part of the reforms to 12, UP rescinded the decision after strong protests by Bharatiya Mazdoor Sangh, an RSS-affiliated labor union.Existing businesses in these states are upset because they are not reaping the benefits of the easier regulations. They now seek for similar flexibility.
The Labor Ministry launched consultations with stakeholders shortly after announcing the Covid-19 relief package for approximately 20 lakh crore to understand what more was needed to attract investment, highlighting the significance of the government initiative.
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