Deregulation of labour market: A comparative study of secondary sector in India and China

Abstract

Global competition, technological advancement, and outsourcing of production have demanded the organizations to be cost effective and flexible in order to face the change for their survival and growth. However, factors like slow growth rate, high unemployment and presence of union have constrained the government to deregulate the labour market in India. Can India learn from China on the deregulation of the labour market and practice flexibility? The purpose of this paper is to identify the success factors linked to deregulation of labour market and its impact on secondary sector in China. A model of these factors which led to the change in the legal system in China leading to flexible labour practices is explored based on the secondary data. The author tries to critically examine this model of labour market deregulation and its impact on the labour class in China. This paper also attempts to compare the existing legal system in India against the China model. The labour market regulations influencing the secondary sector in India and China is also debated against the practices in the developed countries. This research outcome will provide input for the policy makers and government authorities of both the countries to have a relook at their strategy for labour market regulation. The findings have also implications for the actors of industrial relations such as employers and trade union leaders in deciding their future course of action in labour management.