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‘India’s working hour regulations prevent manufacturers from meeting demand surges and participating in global markets,’ says the Economic Survey 2024-25 citing studies.
Indian firms cannot adhere to applicable
regulations without jeopardising growth opportunities and hurting investments and job creation, says Economic Survey.
Even as the debate on the work-life balance is going on in the country, India’s Economic Survey 2024-25 on Friday cited studies that state that India’s working hour regulations prevent manufacturers from meeting demand surges and participating in global markets. It also said the various limits on working hours — per day, week, quarter, and year — often conflict, reducing workers’ earning potential.
“India’s working hour regulations prevent manufacturers from meeting demand surges and participating in global markets. Manufacturers stay competitive by minimising the time to bring a product to the market (Afonso et al., 2000; Vesey, 1991),” according to the Economic Survey 2024-25.
It also said that to reduce time-to-market, manufacturers must be capable of temporarily scaling up production. Labour laws in other countries allow manufacturers to average working hour limits across weeks and sometimes months. The International Labour Organisation (ILO) also recommends allowing manufacturers the freedom to average working hour limits across 3 weeks. However, India’s working hour limits may increase the cost, time, and risk of manufacturing
According to Section 51 of the Factories Act (1948), “No adult worker shall be required or allowed to work in a factory for more than forty-eight hours in any week.”
The Survey also mentioned another Section 65(3)(iv) of the Factories Act (1948) that states, “No worker shall be allowed to work overtime for more than seven consecutive days, and the total number of overtime hours in any quarter shall not exceed seventy-five.”
On the overtime, the Economic Survey cited another study to say this law limits the number of overtime hours workers can perform and the overtime wages they can earn.
“This law limits the number of overtime hours workers can perform and the overtime wages they can earn. While states may set their own limits, these are generally lower than those established by other countries. The earning potential of workers across countries can be assessed based on the restrictions on overtime hours,” it added.
The Economic Survey also advocated for longer labour hours during the surge in demand.
“Given their economic capacity, Indian firms cannot adhere to applicable regulations without jeopardising growth opportunities and hurting investments and job creation. For instance, if there is a surge in orders during specific months in the year, exporting firms should have the flexibility to deploy more labour hours and lower them during lean seasons,” it added.
What Chief Economic Advisor Said
After being asked a question related to working hours of employees, India’s Chief Economic Advisor V Anantha Nageswaran in a post-Economic Survey press conference on Friday said, “Not everything needs a policy tweak or policy intervention. Some of it is in the natural self interest of businesses to be able to find a balance.”
The Economic Survey & Mental Health
The Economic Survey 2023-24 recognised mental well-being as an economic issue and highlighted, in some detail, the increasing prevalence of mental health issues worldwide and in India and its likely impact on the economy. It emphasised a whole of community approach to tackling mental health problems.
“Data suggests that mental well-being is not static; indeed, there are a myriad of factors, including workplace culture, hours spent working, and lifestyle, that influence mental well-being,” it added.
The Work-Life Balance Debate
In October 2023, Infosys co-founder N R Narayana Murthy sparked a debate on the work-life balance after he advocated for the 70-hour work week. He had said that for India to compete with the fastest-growing countries like China and Japan, the youth must commit to working 70 hours a week.
The debate intensified with more industrialists joining the debate with the most of them supporting the idea.
The debate took on new dimensions when L&T’s Subrahmanyan recently echoed this ethos, but pushed the envelope further with a 90-hour workweek proposal, including Sundays.
The L&T chairman’s comments, first circulated in a video on Reddit, suggested that employees should prioritise work over home life, questioning, “How long can you stare at your wife?” Subrahmanyan expressed regret over the inability to mandate Sunday work, stating, “If I can make you work on Sundays, I will be more happy because I work on Sundays.”
However, on January 21, Murthy said no one can ask people to put in long hours, but it is for everybody to “introspect” and understand the need for it.
“I can say that I used to get to the office at 6:30 AM and leave at 8:30 PM, that’s a fact. I have done it. So, nobody can say that no, that’s wrong. And, I have done it for 40-odd years,” Murthy said, while replying to a question on work-life balance after delivering the annual ‘Kilachand Memorial Lecture’ at the IMC.
