Reforming Indian Labour Market:An Exposition of Some Issues

This paper offers an exposition of the institutional and other issues of the labour market in India. It notes that the Indian worker is perhaps the least productive in the world. The paper presents some hypothetical reasonings to explain such low productivity. Taking clue from Solow's analysis which views labour market as a social institution, it tries to locate the reason in legal provisions, political patronage, etc., which exert hardly any compulsion on the part of the worker to be geared to work and be productive. A brief comparison of the Indian and the Japanese industrial relations reveals that the latter have a pro-production bias while the former anti-enterprise bias. The paper concludes drawing inferences relating to legislating an exit policy, to revoking complete job security provisions, and to establishing linkage of wages to productivity and bonus in order to encourage team spirit and profitability of an enterprise.