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Against Thresholds: Raising Capacity and Formalizing the Economy

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  • Dipankar Gupta

    (Jawaharlal Nehru University)

Abstract

The Industrial Disputes Act of India sets up several thresholds that encourage gaming the relationship between management and labour. The various thresholds are regarding the number of workers one can employ below which certain regulations do not apply as well as the number of days of employment below which other sets of regulations become inapplicable. In all, these laws discourage transparent practices, restrict size and skill of firms and keep labour and management in a perpetual state of tension. What the Industrial Disputes Act fails to acknowledge is that promoters and executives of industry would also like to encourage skills among workers and build a committed labour force. It also undermines the ambitions of the working classes to upskill themselves and gain recognition in the firms they are employed. Together, these factors hold back industrial development in India and create an atmosphere where there is a marked tendency on the part of the management to duck under these thresholds and escape regulations.

Suggested Citation

  • Dipankar Gupta, 2019. "Against Thresholds: Raising Capacity and Formalizing the Economy," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 62(1), pages 15-30, March.
    • Handle: RePEc:spr:ijlaec:v:62:y:2019:i:1:d:10.1007_s41027-019-00154-z
    DOI: 10.1007/s41027-019-00154-z
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    References listed on IDEAS

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    1. K.V. Ramaswamy, 2016. "Size dependent tax incentives, threshold effects and horizontal subcontracting in Indian manufacturing: Evidence from factory and firm-level panel data sets," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2016-007, Indira Gandhi Institute of Development Research, Mumbai, India.
    2. Kaushik Basu & Avinash Dixit, 2017. "Too Small to Regulate," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 15(1), pages 1-14, March.
    3. Dibyendu Maiti & Sugata Marjit, 2009. "Informal Wage And Formal Sector Productivity : Theory And Evidences From India," Labor Economics Working Papers 22928, East Asian Bureau of Economic Research.
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    Cited by:

    1. Sudeshna Sengupta, 2020. "Organising Work as Migrant Domestic Workers and Construction Workers in the National Capital Region of India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 63(4), pages 1165-1182, December.
    2. Dipankar Gupta, 2020. "Think “Big”: Strategizing Post-coronial Revival in India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 63(1), pages 145-150, October.

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