Indian Prime Minister Narendra Modi announced a series of labor reforms on Thursday aimed at transforming Asia's third-largest economy into an international manufacturing hub.
Modi said he wants to overhaul India's archaic labor laws to make it easier to do business in the country, attract investment, and promote it as the world's next cheap manufacturing nation.
India's labor laws, many written when India was a British colony, strictly regulate hiring and firing of employees and require large amounts of paperwork which often deter companies from employing new staff.
"Ease of business is the first and foremost requirement" for making India a global manufacturing hub, Modi said in New Delhi.
The new rules include changes that would make it easier for employees to link their Provident Fund savings — a payroll-funded government savings scheme — to their bank accounts and allow them to transfer the funds as they move jobs.
Factory inspection reports will now be uploaded to a government website within three days, unlike current arbitrary checks which manufacturers say allow inspectors to harass them.
The prime minister launched a "Make in India" campaign last month and has promised to bring the country's slumping economy back on the growth track. Creating more jobs is a high priority, with some 13 million young Indians joining the workforce each year. There have been recent signs of an economic pickup, but growth rates remain far below the 8 percent levels of a decade ago.
Modi won a staggering electoral mandate in May and has since been promoting India as the world's next manufacturing powerhouse. That's a title long held by China, which is now growing wealthier and trying to become a consumer economy.
