Question

what are labour laws? foregin companies are demanding more flexibility in labour laws. what does they mean by "flexibility"? what are the steps taken by indian goverment to attract foregin investment?

Answer 1

Labour laws are those laws that protect a worker from being exploited by their employers.There are certain rules and regulations that prevents workers from being exploited.
The Indian government has allowed flexibility to some extent in labour laws . But still the foreign companies demand more flexibility.Flexibility in labour laws means liberalising these rules that otherwise protected the workers.


Steps taken by Indian government to attract foreign investment are ---

1) Setting up of Special Economic Zones (SEZs) that have world class facilities like electricity, water, roads, transport, educational facilities.

2) Companies that setup their production units in SEZs do not have to pay taxes for first five years.

3) Flexibility of labour laws.Instead of employing workers on a regular basis, the companies hire the workers whenever they want, especially during intense pressure of production.This helps in reducing the cost of labour for the companies