India’s Chief Economic Advisor uses the word ‘squatters’ to describe India’s ‘formal’ workforce while pushing for controversial labour law changes

• Indian states like Uttar Pradesh, Madhya Pradesh, Gujarat and now Karnataka are freezing labour laws for the next three years and the central government seems to be backing it up.
• Not just that, the Chief Economic Advisor Krishnamurthy Subramnanian added insult to injury while backing these controversial changes.
• He seemed to suggest that just because nearly 90% of the country’s workforce doesn’t have protection for the jobs, the other 10% must also be stripped off the benefits they seem to have.

Indian states like Uttar Pradesh, Madhya Pradesh, Gujarat, Punjab and Rajasthan have suspended many of the protections available to workers including minimum wages, social security, and safety norms at work. And experts feel not all the changes are welcome ⁠— or they are incomplete without other safety measures ⁠— as they may expose the workforce to exploitation.

However, the Narendra Modi government seems to be backing these changes and it might even bring some of its own. The Indian Prime Minister said that the ₹20 lakh crore stimulus package will reform all “land, labour, liquidity and laws”.


These are the specific laws that have been suspended by the four states:

Even before Modi revealed the stimulus plan, Chief Economic Advisor Krishnamurthy Subramnanian backed the states’ move saying these protections were prohibiting the creation of formal jobs.

Adding insult to injury

What’s worse, Subramanian’s caustic rhetoric makes it difficult to sell ‘labour reforms’ to a big section of India. He used the word ‘squatters’ to describe the 11% of India’s total workforce that enjoys formal employment.

“When I was young, I travelled in the third class compartment of the Indian Railways. Now those who would have travelled would know that in the third class compartment whoever got in at the first station would ensure that nobody else got in after that so effectively squatters had the rights,” Subramanian said in an interview on May 11.

Listen to Subramanian’s interview here:

“You know this parallel is quite useful even to understand the situation that we have with labour laws. So again to take that parallel you know those few 70 people who get into the unreserved third class compartment are the ones that reach the destination,” he added.

While there is a case to be made that India needs more formal jobs, is it really a ‘reform’ to take away protection from a smaller section of the society instead of adding protection for the others?

“I think that was an unfortunate way of phrasing it,” said renowned author and former CEO of Procter and Gamble India, Gurcharan Das, who in his bestselling book, ‘The Difficulty in Being Good’, wrote, “The choice is not between a free market and central planning but in getting the right mix of regulation.”

Das agrees with some of what Subramanian had to say but not all of it. “Today, the labour laws protect only 11% of the population. That’s because our labour laws protect jobs, not workers. Smart countries protect workers and not jobs because they understand that jobs change, that if there's a downturn in the market, a person has to be laid off for the company to survive,” he told Business Insider.

See also:
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