Relaxation of Labour Laws In Various States to Revive Economy


The ongoing COVID-19 crises has made some states to ease labour laws in order to revive the economy and attract more investment.

The laws that are relaxed include those related to settling industrial disputes, health and working conditions of workers, occupational safety and those related to trade unions, migrant labourers and contract workers.

labour laws

Labour Laws In India 

Labour is included in the Concurrent List where both the central and state governments are competent to enact legislation.

India has 45 central labour laws and about 200 labour laws at the state level.

Central laws are being streamlined into four codes on industrial relations, social security, wages and occupational safety.

Changes In Labour Laws By States 

Madhya Pradesh

  • Hire & Fire
  • Establishments having workers up to 100 can hire according to their needs.
  • No registration for contractors with 50 labourers.
  • Easier License & Registrations
  • Renewal of factory license once in 10 years.
  • Registrations and licences to be issued in a day.
  • Startups need one time registrations, no renewal.
  • The End Of Inspector Raj
  • No factory inspections for 3 months.
  • No inspection for firms with less than 50 workers.
  • Third party inspection allowed.
  • Shift Hours
  • Raised to 12 hrs from 8 hrs in factories.
  • Overtime of upto 72 hrs permitted, flexibility in changing shifts.
  • Shops and establishments can work from 6 am till midnight.

Uttar Pradesh

The State has exempted its Industry from all labour laws barring the following:

  • Workmen Compensation Act, 1923
  • Bonded Labour System (Abolition) Act, 1976
  • Building and Other Construction Workers Act, 1996
  • Payment of Wages Act to apply with some exceptions.


The State has exempted the New Industrial establishments from all labour laws barring the following:

  • Minimum Wages Act 
  • Employees Compensation Act 
  • Industrial Safety Rules

What It Means For Business

  • No labour inspection or government intervention.
  • Gives free hand to employers to hire and fire workers according to their requirement .
  • No role of unions.

India INC has been pleased and said that this will provide much-needed flexibility and there will be competition among states for reforms.
Labour Unions are unhappy by this move and want the central government to intervene and stop the state government from introducing such changes as these changes would be detrimental to workers, giving free hand to employers.


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