The world is going through one of its toughest times in history, where the unprecedented outbreak of novel coronavirus has put the world into a standstill. Not only it created a blow in the healthcare sector, but also made the economic base abysmally weak. Concerning India, in this development phase, the outbreak of the virus has thrown severe implications on the economy.

When the increase in the cases were reported in India, the prime minister of the country called for complete lockdown of the nation, which was done without pre planning made life more painful for people. Particularly, the lives of laborers belonging to the informal sector were severely affected. Few days after the implementation of lockdown, the nation witnessed one of the greatest migrations of migrant laborers on foot for long distances from one end of the nation to another. There were no alternatives other than that, because their means of livelihood was a big question mark. One should not be blind towards those fatalities that are caused due to this migration.

Center for monitoring Indian economy (CMIE), statistics projects that unemployment rate is 21.1% currently, where urban rate of unemployment is 26.5% and rural rate is 23.2%. Bihar, Haryana, Jharkhand constitute more of the unemployment rate which are 46.6%, 43.2% and 47.1% respectively. Almost every state is struggling with increased rates of unemployment, more specifically after when COVID pandemic hits the nation. If we are comparing the figures of unemployment, during March it was 8.75% but in April it rose to 23.52 and furthermore after that. During 2019 for the same time, the rate was only 7.03%. More seriously that fact is there is no record of foreign unemployed in the aforesaid data, where India’s a huge pack of human capital is working in foreign nationals also.

Like almost every nation, India also came up with the stimulus packages to overcome the ripples caused by pandemic. The finance minister emphasized the need for ‘atma nirbhar’. It is okay with the project if further incentives were also assisted with it for the smooth implementation. If we analyze the package, very few measures will only produce desired results. There were more provisions for corporate than boosting MSMEs which will create larger stakes in primary sectors. Moreover there were no any more incentives that will put money directly towards the beneficiaries to boost aggregate demand, which was suggested by economists like Nobel laureate Abhijith Banarjee to boost demand.

The number of informal sector workers in India is far more than those who work in formal sectors. For the same reason, the protection and security in the formal sector is a provision for those engaged there but at the same time is a big blow for the informal sector workers. Informal sector workers mostly engage in daily wage jobs etc and are organized to any particular firm or jobs mostly, which is a threat for their sustainability in the job market. That is what we saw when the country moved for lockdown, that informal sector laborers were in the crossroad while formal sector remained as a circuit. Also this does not deny that some of the formal sector enterprises also experienced the blow of this pandemic. But in total it was far more secure than the informal sector.

Amid all those catastrophes, states like Uttar Pradesh, Gujarat, Madhya Pradesh, Haryana, Rajasthan etc came forth for the restructure of the existing labor laws and rules. Verily more than the pandemic, this will create hardships for laborers. There was an ordinance produced by the UP government for suspension of labor and industry law for about three years. Large number of provisions in business disputes, safety of workers in factories, minimum wages, improvement in living conditions of laborers, working  of labor unions, protection for contract and migrant laborer jobs, provident funds, bonus etc thirty eight items were suspended. After all those suspended items, part V of wages act of 1936, construction workers act of 1996, compensation act of 1993 will only have effect for next three years. The explanation given by the authorities for this particular move was to revive the economy and make ease for business. There is no chance in the laws that relate with children and women in work. From the entrepreneurs’ point of view this may be some benefits, but concerning the labor force it is not at all welcoming one.

Likewise Madhya Pradesh also changed the factories law that are beneficial for laborers for 1000 days also other states like Gujarat and Uttarakhand are also following the same. In Gujarat the basic provisions of laborers are taken away to provide sops for entrepreneurs. Working hours in the states were increased from 8 hours to 12 hours. This is how hypocrisy of government is unveiled. On the other hands they speak for the welfare of workers while on the other hand they restructure all the existing laws.

Almost every labor union, including labor unions under BJP and BMS also came against such moves from the side of governments. More than considering that all laws are beneficial for laborers, it is all about tireless efforts and struggles in the past days for achievement of those. Such things of larger importance are now being suspended like anything. Actually the labor laws are formulated based on the rights said in the constitution of India. The working time of eight hours per day is globally accepted. Also the Supreme Court of India and Indian labor conference insisted that minimum wage should be an amount that should satisfy self and dependents needs of a labor also that should satisfy health, education and healthy meals for the family.

So, restructuring of labor laws is denial of all those fundamental frameworks. Trade unions leaders commented that such laws will make laborers ‘slaves’ of the entrepreneurs.

At the same time, the crisis created a large impact on other sectors also, like agricultural, industrial, hotel management and tourism, information technology, public transport etc areas. Even in Kerala, its estimated about 17000 core losses in the hotel, restaurant sector itself.  Verily there should be some provisions and incentives provided to entrepreneurs to overcome the crisis. But that should not be denying the basic right of laborers; those are supposed to work there.

Meanwhile the government should concentrate more on the sops which will create benefit for both entrepreneurs without affecting the needs of laborers in particular. The protection should not give to those who deploy capital only. But, it should also protect the right of labor. As India, having a large population which can be changed to a demographic dividend, labor can be made available cheaper, so there is a way cleared to invite foreign investments in that perspective, because there are presently large numbers of laborers unemployed in India. So by making friendly decisions for laborers and entrepreneurs, India can make its human capital than leaving it for a demographic disaster.


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