Industrial and Labour Policy

RBI GRADE B INTEGRATED COURSE
INDUSTRIAL POLICY
Note: Do not try to remember number, the purpose is to give

historical background and broad idea of Industrial policy. You
can note down the important date asked in the relevant test.
Industrial sector performance is critical to achieving the ambitious goal

of making India a five-trillion economy. The sector plays a decisive role
in determining the overall growth of national output and employment
through its backward and forward linkages with the other two sectors of
the economy. It contributes close to 30 per cent of total gross value
added (GVA). The sector is, however, vulnerable to several internal and
external economic challenges which affect its overall performance.
First we will see the history of Industrial Policies and the we will see the
latest developments in this field.
At the time of Independence, the Indian economy was facing severe

problems of illiteracy, poverty, low per capita income, industrial
backwardness, and unemployment. After India attained its
Independence in 1947, a sincere effort was made to begin an era of
industrial development. The government adopted rules and regulations
for the various industries. This industrial policy introduction proved to be
the turning point in Indian Industrial history.
Industrail policy is a broad term its includes government actions to

influence the ownership & structure of the industry and its performance.
It takes the form of pay¬ing subsidies or providing finance in other
ways, or of regulation. It includes procedures, principles (i.e., the
philosophy of a given economy), policies, rules and regulations,
in¬centives and punishments, the tariff policy, the labour policy,
government’s attitude towards foreign capital, etc.
MR. SUSHEEL A RAGADE BE (E&T), MBA (Finance), NET (Management), NET (Economics), (Ex. Manager Reserve Bank of India)
Got Selected in RBI Grade B, NABARD Grade A, SBI PO, SBH PO, and 10 more PS Banks | www.targetrbi.com | pg. 1
Industrial policy is a document that sets the tone in implementing,

promoting the regulatory roles of the government. It was an effort to
expand the industrialization and uplift the economy to its deserved
heights. It signified the involvement of the Indian government in the
development of the industrial sector.
With the introduction of new economic policies, the main aim of the
government was to free the Indian industry from the chains of licensing.
The regulatory roles of the Indian government refer to the policies
towards industries, their establishments, their functioning, their
expansion, their growth as well as their management.
The industrial growth of a country is guided and regulated through its

industrial policies. Let’s understand the journey of various industrial
policies.
The main objectives of the Industrial Policy of the Government

in India are:
 to maintain a sustained growth in productivity;

 to enhance gainful employment;
 to achieve optimal utilisation of human resources;
 to attain international competitiveness; and
 to transform India into a major partner and player in the global
arena.
I. Industrial Policy of 1948
The first industrial policy after independence was announced on 6th

April 1948. It was presented by Dr. Shyama Prasad Mukherjee then
Industry Minister. The main goal of this policy was to accelerate the
industrial development by introducing a mixed economy where the
private and public sector was accepted as important in the development
of the economy. It saw the Indian economy in socialistic patterns. The

large industries were classified into four categories:
• Industries with exclusive State Monopoly/Strategic industries: It

included industries engaged in the activity of atomic energy,
railways and arms, and ammunition.
• Industries with Government control: This category included
industries of national importance. 18 such categories were
mentioned in this category such as fertilizers, heavy machinery,
defense equipment, heavy chemicals, etc.
• Industries with Mixed sector: This category included industries
that were allowed to operate independently in the private or
public sector. The government was allowed to review the
situation to acquire any existing private undertaking.
• Industry in the Private sector: Industries which were not
mentioned in the above categories fall into this category. High
importance was granted to small businesses and small industries,
leading to the utilization of local resources and creating
employment.
II. Industrial Policy Resolution, 1956
This second industrial policy was announced on April 20, 1956, which
replaced the policy of 1948. The features of this policy were:
• A new classification of Industries.

• Non-discriminatory and fair treatment for the private sector.
Promotion of village and small-scale industries.
• To achieve development by removing regional disparity.
• Labour welfare.
The IRDA divided industries into three categories:
• Schedule A industries: The industries that were under the

monopoly of the state or government. It included 7 industries.
The private sector was also introduced in these industries if
national interest required.
• Schedule B industries: In this category of industries, the state
was allowed to establish new units but the private sector was not
denied to set up or expand existing units e.g. chemical
industries, fertilizer, synthetic, rubber, aluminum, etc.
• Schedule C industries: So the industries that were not a part
of the above-mentioned industries then it formed a part of
Schedule C industries.
To summarize, the policy of 1956 in which the state was given a primary
role for industrial development as capital was scarce and business was
not strong.
III. Indian Policy Statement, 1973
Indian Policy Statement of 1973 identified high priority industries with

investment from large industrial houses and foreign companies were
permitted. Large industries were permitted to start operations in rural
and backward areas with a view to developing those areas and enabling
the growth of small industries around. And so the basic features of
Indian Policy Statement were:
• The policy was directed towards removing the distortions, it

provided for closer interaction between agriculture and industrial
sector.
• Priority was given towards generation and transmission of power.
• The list of industries reserved for the small-scale sector was
expanded.
• Special legislation was made to protect cottage and household

industries were introduced.
IV. Indian Policy Statement 1977
Indian Policy Statement was announced by George Fernandes then the

union industry minister of the parliament. The highlights of this policy
are:
A] Target on the development of small-scale and cottage

industries.
• Household and cottage industries for self-employment.

• Tiny sector investment up to 1 lakhs.
• Smallscale industries for investment up to 1-15 lakhs.
B] Large-scale sector
• Basic industries: infrastructure and development of small-scale

and village industries.
• Capital goods industries: meeting the requirement of cottage
industries.
• High technological industries: development of agriculture and
smallscale industries such as petrochemicals, fertilizers and
pesticides.
C] Restrict the control of big business houses.
D] Role of the public sector:
• Development of ancillary industries.

• To make available expertise in technology and management in
small and cottage industries.
E] Revival and rehabilitation of sick units.
V] Industrial Policy, 1980
• The Congress government announced this policy on July 23rd,

1980. The features of this policy are:
• Promotion of balanced growth.
• Extension and simplification of automatic expansion.
• Taking over industrial sick units.
• Regulation and control of unauthorized excess production
capabilities installed for industrial houses.
• Redefining the role of small-scale units.
• Improving the performance of the public sector.
VI] New Industrial Policy, 1991
The features of NIP, 1991 are as follows:
• Public sector de-reservation and privatization of the public sector

through disinvestment.
• Industrial licensing.
• Amendments to Monopolies and Restrictive Trade Practices
(MRTP) Act, 1969.
• Liberalized Foreign Investment Policy.
• Foreign Technology Agreements (FTA).
• Dilution of protection to SSI and emphasis on competitiveness
enhancement.
Outcomes of New Industrial Policies
• The 1991 policy made ‘Licence, Permit and Quota Raj’ a thing of
the past. It attempted to liberalise the economy by removing
bureaucratic hurdles in industrial growth.
• Limited role of Public sector reduced the burden of the

Government.
• The policy provided easier entry of multinational companies,
privatisation, removal of asset limit on MRTP companies, liberal
licensing.
• All this resulted in increased competition, that led to lower prices
in many goods such as electronics prices. This brought domestic
as well as foreign investment in almost every sector opened to
private sector.
• The policy was followed by special efforts to increase exports.
Concepts like Export Oriented Units, Export Processing Zones,
Agri-Export Zones, Special Economic Zones and lately National
Investment and Manufacturing Zones emerged. All these have
benefitted the export sector of the country.
What is the need of the hour?
Industrial policies in India have taken a shift from predominantly

Socialistic pattern in 1956 to Capitalistic since 1991.
India now has a much liberalised industrial policy regime focusing on

increased foreign investment and lesser regulations.
India ranked 77th on World Bank’s Doing Business Report 2018.

Reforms related to insolvency resolution (Bankruptcy and Insolvency
Act, 2017) and the Goods and Services Taxes (GST) are impressive and
will result in long-term gains for the industrial sector.
Campaigns such as Make in India and Start up India have helped to

enhance the business ecosystem in the country.
However, electricity shortages and high prices, credit constraints, high

unit labour costs due to labour regulations, political interference and
other regulatory burdens continue to remain challenges for firm growth

of the industrial sector in India.
There is a need for a new Industrial Policy to boost the manufacturing

sector in the country. Government in December 2018 also felt the need
to introduce a new Industrial Policy that would be a road map for all
business enterprises in the country.
The World Bank released its latest Doing Business Report (DBR, 2020)
todayon24th October 2019. India has recorded a jump of 14 positions
against its rank of 77 in 2019to be placed now at 63rdrank among 190
countries assessed by the World Bank. India'sleap of14 ranks in the
Ease of Doing Business ranking is significant considering that there has
been continuous improvement since 2015 and for the third consecutive
year India is amongst the top 10 improvers.As a result of continued
efforts by the Government, India has improved its rank by 79positions in
last five years [2014-19].
The Doing Business assessment provides objective measures of business

regulations and their enforcement across 190 economies on ten
parameters affecting a business through its life cycle. The DBR ranks
countries on the basis of Distance to Frontier (DTF), a score that shows
the gap of an economy to the global best practice. This year, India’s
DTF score improved to 71.0 from 67.23 in the previous year.
News related to the Industrial Policy
Seshan, the catalyst for industrial reforms of 1991
T.N Seshan, who passed away on Sunday, left an indelible impression

on India in the 1990s on account of an eventful stint as chief election
commissioner.
It was during his tenure that the model code of conduct was enforced
strictly and photo identity cards were issued to voters.
Seshan’s contribution to enhancing the integrity of the electoral process

has been widely praised. There is another area where Seshan played the
role of a catalyst but his contribution has received scant attention.
Rakesh Mohan, who was deputy governor of Reserve Bank of India, has
written that Seshan triggered the first step in a journey which led to
revamping the industrial policy in 1991 where a wave liberalization was
unleashed.
In a book, ‘India Transformed,’ which contained essays from people who

assessed the first 25 years after the economic reforms of 1991, Rakesh
Mohan wrote about Seshan’s role in industrial policy.
In 1988, the Rajiv Gandhi government had lost the initiative to carry out
economic reforms on the heels of the controversy over the acquisition of
the Bofors guns. Around that time, Mohan was an economic adviser in
the ministry of industry. Seshan was appointed cabinet secretary during
the same period.
One of the things Seshan ordered was that all major departments
present a plan on what they did and where they proposed to go.
For the ministry of industry, this order translated into a simple question:
What is India’s industrial policy?
The answer was that whatever the policy was, the only thing that
appeared certain was that it was a mess.
According to Rakesh Mohan, trying to answer the question on industrial

policy meant collecting information which would eventually turn out to
be the first step in the journey which culminated in the industrial
reforms of 1991.
If Seshan was a reformer by intent in the Election Commission, he was

an inadvertent instrument in the reform of India’s industrial policy.
News related to New Industrial Policy
Government to set up working group on proposed new

industrial policy
The government will soon constitute a working group on the proposed

new industrial policy which is aimed at promoting emerging sectors,
reducing regulatory hurdles and making India a manufacturing hub, an
official has said. Earlier, the Department for Promotion of Industry and
Internal Trade (DPIIT) had prepared the policy and sent it for the Union
Cabinet approval, but certain new suggestions have been made with
regard to the policy. The working group will rework on it and submit the
same to the DPIIT, the official said.
The group will have members from different government departments of

the Centre and states, as well as from industry chambers, including the
Confederation of Indian Industry (CII). This will be the third industrial
policy after the first in 1956 and the second in 1991. It will replace the
industrial policy of 1991 which was prepared in the backdrop of the
balance of payment crisis. The DPIIT had initiated the process of
formulation of a new industrial policy in May 2017.
The new policy will subsume the National Manufacturing Policy

(NMP). A consultative approach had been taken for policy formulation
wherein six thematic focus groups had been used to obtain inputs. The
six areas include manufacturing and MSME; technology and innovation;
ease of doing business; infrastructure, investment, trade and fiscal
policy; and skills and employability for the future. The department had
floated discussion paper on the policy with an aim to create jobs for the
next two decades, promote foreign technology transfer and attract USD
100 billion FDI annually.
It had outlined several constraints to industrial growth -- inadequate

infrastructure; restrictive labour laws; complicated business
environment; slow technology adoption; low productivity; challenges for
trade; and inadequate expenditure on R&D and innovation.
Economic Survey 2019-20 Highlights related to the Industrial

Sector.
The industrial sector based on Index of Industrial Production (IIP)

registered a growth of 0.6 per cent for 2019-20 (April-November) as
compared to 5.0 per cent during 2018-19 (April-November). Growth of
manufacturing sector was 0.9 per cent during 2019-20 (April-November)
as compared to 4.9 per cent during 2018-19 (April-November). Growth
of refinery products sector stood at (-)1.1 per cent during 2019-20
(April-November) as compared to 5.3 per cent during 2018-19 (April-
November).
Steel sector achieved a growth of 5.2 per cent during 2019-20 (April-
November) as compared to 3.6 per cent during 2018-19 (April-
November). Government has initiated several policies in various
infrastructure sectors to enhance their capacity and output. Report of
the Task Force on National Infrastructure Pipeline released on
31.12.2019 has projected total infrastructure investment of Rs.102 lakh
crore during the period FY 2020 to 2025 in India.
TRENDS IN INDUSTRIAL SECTOR 8.2 Industrial sector performance

in terms of its contribution in GVA improved in 2018-19 over 2017-18.
However, as per the estimates of Gross Domestic Product by National
Statistical Office (NSO), the real GVA of industrial sector grew by 1.6 per
cent in first half (H1) (April-September) of 2019-20, as compared to 8.2
per cent in H1 of 2018-19. The low growth in industrial sector is
primarily due to manufacturing sector which registered a negative
growth of 0.2 per cent in 2019-20 H1.
Index of Industrial Production (IIP) The IIP is a measure of

industrial performance. It assigns a weight of 77.6 per cent to
manufacturing followed by 14.4 per cent to mining and 8.0 per cent to
electricity. Overall, IIP growth has moderated to 3.8 per cent in 2018-19
compared to 4.4 per cent in 2017-18. During the current year 2019-20
(April-November), it grew at 0.6 per cent as compared to 5.0 per cent in
the corresponding period of previous year. The moderation in growth is
mainly arising from subdued manufacturing activities due to slower
credit flow to medium and small industries, reduced lending by NBFCs
owing to liquidity crunch, tapering of domestic demand for key sectors
such as automotive sector, pharmaceuticals, and machinery and
equipment, volatility in international crude oil prices, prevailing trade
related uncertainties, etc. Exports of key labour intensive sectors, such
as gems & jewellery, basic metals, leather products and textile products
under-performed during the current financial year.
Eight Core Industries The Index of Eight Core Industries measures

the performance of eight core industries i.e., Coal, Crude Oil, Natural
Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity. The
industries included in the Index of Eight Core Industries comprise 40.27
per cent weight in the Index of Industrial Production (IIP). 8.6 Growth
of Eight Core Industries stood flat during the current financial year
(April-November, 2019). During the corresponding period of the
previous year, these industries grew at 5.1 per cent. While fertilizers,
steel and electricity have seen expansion in their production, procuction
of coal, crude oil, natural gas and refinery products have contracted
during the current financial year. Excessive rainfall during monsoon, law
and order problem prevailing in mining areas and strike during
September 2019 impacted the coal sector. Crude oil industry continued
to show contractionary trend with a growth rate of (-) 5.9 per cent in
2019-20 (April-November) owing to operational issues like power
shutdowns, electrical faults due to rains/winds/ thunderstorms, etc.
Growth rate of 3 Months Moving Average Month-onMonth (M-o-M) of

IIP, Eight Core Industries and Manufacturing sector from 2017-18 to
2019-20 shows that the three indicators move in tandem with some
occasional deviation.
LABOUR POLICY
Note: This is very vast topic and for RBI Grade B Phase 1 and
Phase 2 purpose our focus should be on latest developments
related to various labour related government schemes.
Work is part of everyone’s daily life and is crucial to one’s dignity, w ell-
being and development as a human being. Economic development
means not only creation of jobs but also working conditions in w hich
one can work in freedom, safety and dignity. Ministry of Labour &
Employment, one of the oldest and important Ministries of the
Government of India, is functioning to ensure that it remains focussed
on improving life and dignity of labour force of the country by protecting
& safeguarding the interest of workers, promotion of their w elf are and
providing social security to the labour force both in Organized and
Unorganized Sectors by enactment and implementation of various
Labour Laws, which regulate the terms and conditions of service and
employment of workers. The State Governments are also competent to
enact legislations, as labour is a subject in the Concurrent List under the
Constitution of India.
The need for labour legislation arises because of:
(i) The relationship between the workers and employers, is one

of partnership in the maintenance of the production and
building up of the national economy,
(ii) The community as a whole as well as individual employers
are under an obligation to protect the well-being of workers
and to secure to them their due share in the gains of
economic development.
The object of Labour Legislation, therefore, is two-fold namely:
(i) To improve the service conditions of industrial labour so as to

provide for them the ordinary amenities of life.
(ii) To bring about industrial peace which could in its turn
accelerate productive activity of the country resulting in its
prosperity?
Labour has a vital role in increasing productivity and management has to

help create conditions in which workers can make their maximum
contribution towards this objective.
In free India, the labour movement and trade unions should be in a

position to assume larger responsibilities in the context of new scenario
and challenges which are coming up on the advent of 21st century. One
of the main tasks in the Five Year Plans is to evolved practical ways in
which they can make an increasing contribution to national development
and national policy.
Union List Concurrent List

Entry No. 55 – Regulation of labour Entry No. 22 – Trade Unions;
and safety in mines and oil fields. industrial and labour disputes.
Entry No. 61 – Industrial disputes Entry No. 23 – Social Secutiry and
concerning Union employees. Social insurance; employment and
unemployment.
Entry No. 65 – Union agencies and Entry No. 24 – Welfare of labour
institutions for "vocational training" including conditions of work,
provident funds, employers' liability,
workmen's compensation, invalidity
and old age pensions and maternity
benefit.
Labour Reforms:
Ministry of Labour & Employment (MoLE) has taken a number of
initiatives f or bringing transparency and accountability in enforcement
of labour law s w ith the objective of strengthening the safety, security,
health and social security for every w orker and bringing ease of
compliance for running an establishment to catalyze creation/
generation of employment opportunities. Thes e initiativ es inc lude
governance reforms through use of e-governance measures and
legislative reforms by simplifying, amalgamating and rationalizing the
existing labour law s into f our Labour Codes.
Labour Code on Wages:
• Labour Code on Industrial Relations

• Labour Code on Social Security & Welfare
• Labour Code on Occupational Safety, Health & Working
Conditions
SAMADHAN is an Online Portal devised to introduce the workers to an

easy w ay of filing their dispute with the appropriate Conciliation Officer,
encouraging transparency, speedy justice and trust by workers on the
Government. The system is so designed that it w ould integrate all the
role players (viz. Workman, Conciliation Officer, Appropriate Government
and CGITs) in the dispute under one roof i.e. on SAMADHAN.
Legislative Initiatives
• Under Payment of Bonus Amendment Act, eligibility limit for

payment of bonus enhanced from Rs 10000/- to Rs. 21000/- per
month and the Calculation Ceiling from Rs. 3500/- to Rs. 7000/-
or the minimum wages.
• Payment of Wages (Amendment) Act, 2017 enabling payment of

Wages to employees by Cash or Cheque or crediting it to their
bank account.
• Child Labour (Prohibition and Regulation) Amendment Act, 2016
provides for complete ban on employment of children below 14
years in any occupation or process.
• Maternity Benefit Amendment Act, 2017, increases the paid
maternity leave from 12 weeks to 26 weeks.
• The Employee Compensation (Amendment) Act, seeks to
rationalize penalties and strengthen the rights of the workers
under the Act.
• The Payment Of Gratuity (Amendment) Act, 2018, provides
flexibility to the Central Government firstly to increase the ceiling
limit of gratuity to such amount as may be notified from time to
time and secondly to enhance the calculation of continuous
service for the purpose of gratuity in case of female employees
who are on maternity leave to such period as may be notified
from time to time. Vide Notification dated 29th March, 2018, the
ceiling limit of gratuity has been increased from Rs. 10 Lakh to
20 Lakh and this period of maternity leave for calculation
purpose has been enhanced from 12 weeks to 26 weeks.
Governance Reforms
• Ministry has notified “Ease of Compliance to maintain Registers

under various Labour Laws Rules, 2017” on 21st February 2017
which has in effect replaced the 56 Registers/Forms under 9
Central Labour Laws and Rules made there under in to 5
common Registers/Forms. This will save efforts, costs and lessen
the compliance burden by various establishments.
• A Model Shops and Establishments (RE&CS) Bill, 2016 has been
circulated to all States/UTs for adoption with appropriate
modification. The said Bill inter alia provides for freedom to

operate an Establishment for 365 days in a year without any
restriction on opening/closing time and enables employment of
women during night shifts if adequate safety provisions exist.
• Under Industrial Employment (Standing Orders) Act, 1946, the
category i.e. Fixed Term Employment, with all Statutory Benefits,
has been extended to all Sectors to impart flexibility to an
establishment to employ people to meet the fluctuating
demands, vide the Industrial Employment (Standing Orders)
Central (Amendment) Rules, 2018.
• Ministry has also notified Rationalization of Forms and Reports
under Certain Labour Laws Rules, 2017on 28.03.2017 for
reduction of number of Forms / Returns under 3 Central Acts /
Rules from 36 to 12 by reviewing redundant and overlapping
fields.
• UNIFIED ANNUAL RETURN - "Unified Annual Return returns have
been made mandatory in respect of the these Central Labour
Acts [the Payment of Wages Act, 1936, the Minimum Wages Act,
1948, the Maternity Benefit Act, 1961, the Payment of Bonus Act,
1965, the Industrial Disputes Act, 1947] on the Shram Suvidha
Portal".
• National Child Labour Policy (NCLP)
Constitutional and legislative provisions providing protection to
children against employment has been elaborated in the National
Child Labour Policy announced in 1987. The policy addresses the
complex issue of child labour in a comprehensive, holistic and
integrated manner. The action plan under this policy is
multipronged and mainly consists of: (i) A legislative action plan;
(ii) Focuses on general development programmes for the benef it
of the families of children; and (iii) Project-based action plan in
areas of high concentration of child labour.
Office of Chief Labour Commissioner (Central) [CLC(C)]
This Office is responsible for (a) prevention, investigation and settlement

of industrial disputes in the central sphere; (b) enforcement of awards
and settlements; (c) implementation of labour laws in industries and
establishments in respect of which Central Government is the
appropriate government; (d) verification of membership of Unions
affiliated to the Central Organisations of workers for giving them
representation in national and international conferences and
committees; and (e) fixation and revision of dearness allowance
component of minimum wages under the Minimum Wages Act, 1948 in
the scheduled employments.
Pradhan Mantri Shram Yogi Maan-Dhan (PMSYM): 1.3

Government of India has introduced a pension scheme for unorganised
workers in the name of Pradhan Mantri Shram Yogi Maan-dhan (PM-
SYM) to ensure old age protection for Unorganised Workers. Enrollment
under the scheme has started since 15th February, 2019.
‘Santusht’ - Implementation Monitoring Cell (IMC) has been

constituted in the Office of Minister of State (Independent Charge) for
Labour and Employment in January 2020. The objective of ‘Santusht’ is
to promote transparency, accountability, effective delivery of public
services and implementation of policies, schemes of Ministry of Labour
and Employment at grass root level through constant monitoring.
For public grievances, Centralized Public Grievance Redresal and

Monitoring System (CPGRAM) portal is already functional. Besides,
written grievances as received from stakeholders are also disposed by
the Ministry. Further, online portal under ‘Santusht’ for public grievances
has not been started so far.
Recent news related to Labour Policy/Reforms.
Entering 2020, the government hopes that India would be able to

implement all four codes on wages, industrial relations, social security
and occupational safety, health and working conditions. These are
expected to improve ease of doing business and safeguard interest of
workers. (30 December, 2019)
As many as 44 central labour laws are most likely to be subsumed under

four labour codes in 2020, making it a year of reforms as the
government works to bolster investments and tackle slowdown blues.
Besides, the Union Labour Ministry is mulling launching a 'Santusht'

portal next month for effective implementation of labour laws at the
grass-root level.
Entering 2020, the government hopes that India would be able to

implement all four codes on wages, industrial relations, social security
and occupational safety, health and working conditions. These are
expected to improve ease of doing business and safeguard interest of

workers.
"We hope that 2020 would be an year of labour reforms. The four codes
would be a reality in 2020. The codes would safeguard the interest of
workers and employers. We have tried to strike a balance between
workers' as well employees' rights," Labour Minister Santosh Gangwar
told PTI.
The labour reforms assume significance in view of an over six-year-low

gross domestic product (GDP) growth of 4.5 per cent in the second
quarter of this fiscal. The retail inflation or consumer price index (CPI)
hit 40-month high at 5.54 per cent in November.
"The process of labour reforms began after 2nd National Labour

Commission gave its report in 2004. But the process was expedited in
2014 (when NDA government came in power at centre).
"We introduced the four codes in Lok Sabha after many tripartite
meetings (taking unions and employers on board). Besides we sent all
four codes for scrutiny by standing committee," the minister said.
As per the recommendations of the 2nd National Commission on Labour,

the ministry is codifying existing 44 central labour laws into four codes
by simplifying, amalgamating and rationalising the relevant provisions of
the legislations. Code on wages has already been approved by
Parliament. The law would be implemented after framing rules under
the code. The remaining three codes are sent to Parliamentary Standing
Committee on Labour.
However, the unions have been raising objections against certain

amendments in the labour laws through codification of central
legislations. The minister also said, "We going beyond codification of
labour laws. In order to ensure effective implementation of labour laws

at grass root level for workers as well as employers, we have planned a
new portal 'Santusht'."
This portal is expected to be launched next month. There would an

internal performance monitoring cell with five to six officers on it board
at central level. It would monitor performance of social security bodies
under the ministry - Employees' Provident Fund Organisation (EPFO)
and Employees' State Insurance Corporation (ESIC), initially.
There have been grievances of the subscribers of the two bodies as well
as other workers on poor implementation of labour laws in the country.
They faced issues like delay in settling claims by EPFO and ESIC. Some
workers did not get minimum wages. There are other issues related to
poor implementation of labour laws in the country at grass root level
which directly affect workers as well as employers.
The 'Santusht' portal would not only monitor the work of different
bodies and wings of the ministry implementing labour laws, but also give
credit and discredit to officials responsible for keeping or not keeping
quality of service on the mark.
The portal would help the labour ministry to assess the performance of
officials and would be given due weighage at the time of their
appraisals, transfers and postings.
It would ensure transparency, accountability and effective

implementation of labour laws. The labour ministry would also enforce
the retirement fund body EPFO's decision to restore commutation, or
advance part-withdrawal, under the Employees' Pension Scheme from
January 1, 2020.
This would provide relief to 6.3 lakh pensioners who had opted for
commutation and got a lump-sum amount at the time of retirement
before 2009. The provision for commutation of pension was withdrawn
by the EPFO in 2009.
Under the commutation, monthly pension used to be cut by one-third

for the next 15 years and the reduced amount was given in lump sum.
After the 15 years, the pensioners were entitled to get the full pension.
Apart from the organised sector, the year 2019 witnessed significant
development in the form of launch of Pradhan Mantri Shram Yogi Maan-
dhan (PM-SYM).
The scheme provides minimum pension of Rs 3,000 per month to

unorganised workers like domestic help, rickshaw pullers, cobblers or
rag pickers, to ensure their old age protection.
The scheme covers informal sector workers whose monthly income is up

to Rs 15,000 per month or less and belong to the entry age group of 18-
40 years. A similar scheme is also launched this year for small traders
and self employers person with annual turnover (sales) not exceeding Rs
1.5 crore.
According to the scheme portal, around 40 lakh informal sector workers

have enrolled under the PM-SYM.
Now, how many more come forward for the scheme would be seen in
year 2020. The government would have to put an extra efforts to
increase enrolments as there are over 40 crore informal sector workers
in India.

Industrial and Labour Policy

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Industrial and Labour Policy

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RBI GRADE B INTEGRATED COURSE

Note: Do not try to remember number, the purpose is to give

Industrial sector performance is critical to achieving the ambitious goal

At the time of Independence, the Indian economy was facing severe

Industrail policy is a broad term its includes government actions to

Industrial policy is a document that sets the tone in implementing,

The industrial growth of a country is guided and regulated through its

The main objectives of the Industrial Policy of the Government

 to maintain a sustained growth in productivity;

I. Industrial Policy of 1948

The first industrial policy after independence was announced on 6th

of the economy. It saw the Indian economy in socialistic patterns. The

• Industries with exclusive State Monopoly/Strategic industries: It

II. Industrial Policy Resolution, 1956

• A new classification of Industries.

The IRDA divided industries into three categories:

• Schedule A industries: The industries that were under the

III. Indian Policy Statement, 1973

Indian Policy Statement of 1973 identified high priority industries with

• The policy was directed towards removing the distortions, it

• Special legislation was made to protect cottage and household

IV. Indian Policy Statement 1977

Indian Policy Statement was announced by George Fernandes then the

A] Target on the development of small-scale and cottage

• Household and cottage industries for self-employment.

• Basic industries: infrastructure and development of small-scale

C] Restrict the control of big business houses.

D] Role of the public sector:

• Development of ancillary industries.

E] Revival and rehabilitation of sick units.

V] Industrial Policy, 1980

• The Congress government announced this policy on July 23rd,

VI] New Industrial Policy, 1991

The features of NIP, 1991 are as follows:

• Public sector de-reservation and privatization of the public sector

Outcomes of New Industrial Policies

• Limited role of Public sector reduced the burden of the

What is the need of the hour?

Industrial policies in India have taken a shift from predominantly

India now has a much liberalised industrial policy regime focusing on

India ranked 77th on World Bank’s Doing Business Report 2018.

Campaigns such as Make in India and Start up India have helped to

However, electricity shortages and high prices, credit constraints, high

other regulatory burdens continue to remain challenges for firm growth

There is a need for a new Industrial Policy to boost the manufacturing

The Doing Business assessment provides objective measures of business

News related to the Industrial Policy

Seshan, the catalyst for industrial reforms of 1991

T.N Seshan, who passed away on Sunday, left an indelible impression

Seshan’s contribution to enhancing the integrity of the electoral process

In a book, ‘India Transformed,’ which contained essays from people who

According to Rakesh Mohan, trying to answer the question on industrial

If Seshan was a reformer by intent in the Election Commission, he was

News related to New Industrial Policy

Government to set up working group on proposed new

The government will soon constitute a working group on the proposed

The group will have members from different government departments of

The new policy will subsume the National Manufacturing Policy

It had outlined several constraints to industrial growth -- inadequate

Economic Survey 2019-20 Highlights related to the Industrial

The industrial sector based on Index of Industrial Production (IIP)

TRENDS IN INDUSTRIAL SECTOR 8.2 Industrial sector performance

Index of Industrial Production (IIP) The IIP is a measure of