Labor Law Reform in India : Insights from Tangled Legacy of Sidney & Beatrice Webb

Sidney and Beatrice Webb, cofounders of the industrial relations field and early pioneers of Fabian Socialism significantly influenced Jawaharlal Nehru and India's post- Independence model of economic development. Part of this model was a protectionist regime of labor law which has now come under increasing criticism as a structural impediment to growth. This article reviews the ideas of the Webbs and uses them as a prism for evaluating the case for labor law reform and the direction it should take. The article advances a three-prong conclusion: the Webbs' program for labor market regulation remains sound in principle but the specifics in India need substantial adjustment; the most important way to generate higher employment growth is not from labor market deregulation but continued liberalization of product markets and encouragement of entrepreneurship; and the most critical pro-growth reform is more efficient and honest institutionalregulatory governance.