Narendra Modi goes for the jugular to end ‘inspector raj’

NEW DELHI: Ask any industry group to identify the single biggest obstacle to their business and a majority will mention the dreaded midnight knocks of inspectors. The unbridled powers of labour inspectors and others of their ilk have scared investors. The term "inspector raj" has for years bothered companies and has been a key source of corruption.

READ ALSO: Labour laws: Measures will work only if states join in

Complying with over 44 central labour laws and nearly 100 state laws can be tough for any company, forcing many to explore loopholes, often at the expense of effi ciency. PM Modi has vowed to end this and has unveiled steps to make inspections transparent, hassle-free and increase compliance. Experts say Modi has little choice. He must revive manufacturing to generate jobs and push growth. India ranks poorly on the World Bank's Ease of Doing Business ranking. Out of 189 countries, India is at 134. Starting business in India can be a tiring exercise and complying with inspectors a Herculean task.

READ ALSO: Cheers from India Inc, jeers from unions

Sample this: Four central agencies carry out about 1.75 lakh inspections each year and units are selected without specific criteria. Clause 28 of the 1970 CLRA Act gives an insight into the sweeping powers inspectors wield. "An inspector may enter, at all reasonable hours, with such assistance (if any), being persons in the service of the government or any local or other public authority as he thinks fit, any premises or place where contract labour is employed, for the purpose of examining any register or record or notices required to be kept or exhibited by or under this act or rules," it says. India Inc says the changes — among the first to be attempted in over 50 years — should improve investment climate, promote entrepreneurship and attract investors. While a beginning has been made, deeper reforms are needed to boost the investment climate.

READ ALSO: New-look ITIs to churn out skilled workers

"The changes suggested by the PM shall have an impact in improving the confidence of corporate India, relieving them of the sword which kept hanging on their head and also scared away entrepreneurs hoping to set shop in India," an industry official said.

READ ALSO: '25,000 laws don't protect 90% of the workforce'

Stay updated on the go with The Times of India’s mobile apps. Click here to download it for your device.