Objectives of the labour policy in economic planning in India

The objectives of the labour policy in economic planning in India in the post-independence period can be classified into two categories in terms of the two economic eras: the plan era and the transition-to-market era.

In the plan era, the first seven Five Year Plans (1951-91, with some breaks in between) focused on the following objectives of labor:

I. Improving the conditions of labour and the welfare of workers.

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II. Prevention and settlement of industrial disputes and maintenance of industrial peace and harmony to avoid disruption of industrial activity which could adversely affect the realization of plan goals.

III. Controlling industrial growth to prevent concentration of economic power in the hands of a few and reducing income disparities among individuals and regions.

IV. Workers’ education.

V. Workers’ participation in management.


With the transition to a market economy (1991 to date), the need has arisen for aligning industrial relations policies with industrialization strategies. This calls for:

I. Facilitating the growth of enterprise and entrepreneurship and aligning labour policies with economic policies.

II. A shift in policy focus from organized labour (7%) to unorganized labour (93%) (Ninth Five Year Plan, 1997-2002, Working Group Report).

III. Reform of labour laws and labour policies in the wake of globalization (terms of reference of the Second National Commission on Labour appointed in 1999).


IV. A shift in emphasis from job security to income security and social safety measures.

V. Concern for skills development, productivity, and competitiveness.

VI. Reformation in pension policies.

VII. A shift in government role from control to facilitation.

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