Decoding the new labour code: How it can catpult india into a economic powerhouse realizing 5 trillion economy

1. Whats the fuss all about new Labour Codes

The new labour codes aimed at helping the business with ease of doing business in india. It is going to affect the lives of 500 million organized and organized sector workers.

90% of the current work force is outside the purview of existing labour laws. Its aim to replace 29 cumbersome laws into simple to navigate labour code.

2. 4 codes that are part of New Labour code
   

The New Labout code comprises of 4 codes a. Code on Wages b. Industrial Relations Code c. Social Security Code d. Occupational safety, health and working conditions code

3. How it affects the workers?

The new labour code will help existing labourers, as well as 90% of current work force who are outside the wage code. The labour codes will ensure that they receive wage security, social security and health security, gender equality in terms of remuneration, a minimum floor wage, make the lives of inter-state migrant workers better, 15-day wage for reskilling laid of workers

4. Existing 29 Labour laws dampen ease of doing business in india
   
Currently in India various states have as many as 40 central laws and 100 state laws involving labour. The Second National Commission on  Labour in 2002 recommended the simplification of these laws to bring transparency and uniformity. The simplification of 29 labour laws into 4 labour codes is really defining moment for labour reforms and ease of doing business in India. 

5. What the New Labour code's major goals

Currently only 10% of workforce who are from organized sector are in the ambit of labour code, the new Labour code will ensure social security benefit for all and bring unoraganized workforce inside the new labour code. With More workers in the organized sector the direct and indirect tax collection will go up. 

6. It affects the take home salary of certain section of workers
   
As per the New Labour code, allowances like HRA, LTA and other allowances should be capped at 50% of the salary, while basic pay will other 50%. This will result lower take home salary for certain section of workforce

7.Flexible work week

The New Labour code will permit having flexible work week like 4 day work week of 12 hours per day, this will help business to increase productivity and Workers to have better work-life balance

8. Current Status of the New Labour code
  The New Labour codes likely to be implemented by FY'23. Central government has completed the process of finalizing the draft rules and the state government are in the process of drafting the same.
  24 States published the draft rules for "Code on Wages"
  20 States published the draft rules for "Industrial Relations Code"
  18 States published the draft rules for "Social Security Code"
  13 States published the draft rules for "Occupational Safety, Health and Working Conditions Code"

9. How doing business in India is eased
   The New Labour code will increase labour productivity.
   Increase trust between employee and employers.
   Both employees and employers develop sense being partner in wealth creation.
   It will attract investments and FDI as it will have transparent environment in terms of Workers compensation, Employee rights and entitlements, employer duties.
   Simplified labour codes will make the compliance easier.