Few issues are as polarizing as Labour law reforms in India. Passions run high with people on either side of the spectrum evenly split on the impact of labour law changes. Several states have recently announced changes to their labour laws. Proponents were quick to hail this as a progressive move and that it would lead to economic growth while the critics slammed it as being exploitative. Numerous researches carried out on the MSME sector coupled with the reams of data available in the public domain clearly suggest that labour law is not really the biggest constraint holding back growth and investments. According to a World Bank survey (www.enterprisesurveys.org) covering 9281 firms across India across all sectors a minuscule 5% of thereabouts of the firms identified labour law as the primary obstacle to their operations. Factors such as access to capital, corruption and tax rates were cited as bigger problems. Back home Industry surveys carried out under the aegis of Niti Aayog and other financial bodies also corroborate the fact that labour laws do not seem to be the biggest issue restricting growth and investments. In the Enterprise surveys conducted across states labour law does not come up as even one of the top issues. Most states cite access to capital, availability of electricity, skilled manpower and tax rates as the key issues.
