While the rest of the world frets over artificial intelligence (AI) and how it could hollow out demand for human effort, a zeitgeist-defying idea is taking hold in India. Several corporate executives have publicly said that at India’s stage of development, a 70 or even 90-hour workweek is a national imperative.
It is a relief that the four new labor laws that New Delhi has passed — after delaying them for five years for fear of political backlash — have not gone that far. They are still helping legitimize the view that an eight-hour day is too lax. While sticking for the time being to the century-old global consensus that a workweek should not stretch beyond 48 hours, the revised regulations have allowed the option of four 12-hour shifts alongside the standard schedule of six eight-hour days.
It is not just the federal government that is moving in this direction. Gujarat, Karnataka, Telangana, Andhra Pradesh and Tamil Nadu, states where the majority of large factories are, have made similar changes, labor researcher Bhargav Oza said. Political parties of all hues seem to agree that a pro-employer tilt would bring in investments and usher in a Chinese-style manufacturing revolution.
Illustration: Yusha
Restrictive labor laws are not the reason why the share of manufacturing in gross domestic product fell from 18 percent in 1995 to 12.5 percent last year, the lowest since at least 1960. A better explanation for why the most populous nation, with its vast army of mostly young workers, is failing to industrialize has come from Ha-Joon Chang, a London-based economist at the School of Oriental and African Studies.
“Your business elites do not want serious industrialization,” he said in an interview.
That is because the elites are mostly in the financial sector, he says. Even when they are industrialists, their mercantile family background and strong ties with finance makes them obsessed with short-term returns. As an IMF analysis shows, when it comes to firms investing in research and development, introducing a new product, or improving a process, India is lagging behind not just developed nations but even low-income developing countries. The failure to innovate cannot be pinned on labor.
Beneath the gloss of finance and digitization, capitalism in India is an unfinished — and perhaps unfinishable — project: 79 percent of small, family-run manufacturing units in cities and 94 percent of rural ones) are single-person ventures, meaning there is no way to separate profits from wages, or capital from labor. Unincorporated establishments that do hire outside staff generally pay employees less than 150,000 rupees (US$1,700) a year.
With such low incomes, what can the working class afford that larger firms would make — with or without the flexibility of longer workdays? Chinese workers have been known to put in longer hours than the country’s legal limits, but their working conditions and living standards have improved steadily. High-speed trains have allowed migrant workers to visit their homes more frequently.
As in China, Indian factories can produce for exports, but those are getting squeezed by President Donald Trump’s prohibitive 50 percent tariffs. In a red-hot market for corporate fundraising, companies are investing very little in infrastructure and machinery. It beggars belief that a 12-hour workday would suddenly open the floodgates to new projects.
Besides, there is a difference between what is written in the statutes and what is actually enforced. Even when eight-hour shifts were the maximum permissible, textile factories in Surat in Prime Minister Narendra Modi’s home state of Gujarat routinely forced workers to do 12 hours of work or more. That went unnoticed until the pandemic snatched away the lifeline — and sent millions of jobless blue-collar workers, unable to afford food or rent, on arduous treks to their villages hundreds of miles away. Many died on the way.
The shadow of that scarring is visible in the revamped labor code. It acknowledges that the state needs to know more about internal migrants and help them with portable access to ration shops and social security. Among other welcome features of the new laws, it is mandatory for employers to give out appointment letters. The principal employer would be responsible for any unpaid wages of contract labor. Assurance of health and life insurance to gig workers reflects a more realistic reassessment of a digitized urban economy.
it is important to moderate expectations from what the government is describing as a “historic reform.” To have 29 different labor laws consolidated into four might raise manufacturers’ hopes, but would they get a breather from harassment? The notorious “inspector raj” would latch on to other infractions to first shut down factories — and then demand bribes for reopening them. Likewise, while it is a progressive idea to let women work night shifts in factories, would employers put in place the safeguards that the new laws require of them?
India’s finance-obsessed capitalists want to deflect attention from their own failures to invest in new technologies and develop new markets. Advances in AI have sped up the innovation cycle, and Trump is squeezing India on trade, and they want to extract more juice out of labor. Ultimately, no country is going to get rich in the 21st century by taking away more hours of the day from working-class families. India is no exception.
Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia. Previously, he worked for Reuters, the Straits Times and Bloomberg News. This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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