It is an inescapable fact that there are far too many regulations governing employment in India. These laws govern everything from the setting up of an establishment, to hiring and firing of employees, working hours, days off, employee benefits, wages, pensions and gratuities. Labour being a “concurrent” subject in our quasi-federal constitution, both centre and state have the right to legislate on the subject and have both used this right liberally, leading to a maze of overlapping (and sometimes conflicting) rules, regulations, compliance requirements and regulatory authorities.



This is not to suggest that employees get a good deal at the expense of the employers. For all its octopus-like tentacles, Indian labour regulations are more honoured in the breach than in the observance. Employers of all sizes employ legal, semi-legal and often plain illegal methods to circumvent regulations, rendering much of the popular analysis (including World Bank’s “Doing Business” reports) on the subject, which are based on what the laws state on paper, inaccurate at best and completely useless at worst.