Last month, the Telangana government relaxed the compliance burden for factories and industries in the state in order to facilitate ease of doing business.

A collage of Telangana CM KCR and a factory in the background
news Governance Monday, March 15, 2021 - 13:16

Telangana’s slip from second to third place in the Ease of Doing Business ranking seems to have pushed the state to take some important decisions with regard to reducing the compliance burden for businesses. This decision has raised eyebrows and opposition from several quarters.

About a month ago, the state government initiated the process with the Telangana Chief Secretary Somesh Kumar directing various departments to simplify and reduce the compliance burden.

What is compliance burden?

The budgets, manpower and processes that businesses have to adhere to in order to meet the rules and regulations laid down by the respective government is compliance burden.

More than 600 compliances relaxed

A total of 623 compliances that earlier had to be checked and verified will now just be deemed to be complied by the factory management. Unless there is a complaint or an accident, there will be no inspection or verification.

Under the ‘General Guidelines’ category, there will no longer be inspections or verifications. Some basic amenities for workers such as holidays, availability of a qualified medical officer, toilets for men and women, shelters and lunch rooms, drinking water supply will now go unchecked because of the new government order.

It’s not just compliances related to workers and labour that have been given the freedom to be deemed as complied. Issues like treatment of waste and effluents in factories, threshold limits for chemical and toxic material, measures for prevention of fire outbreak and spread, routine maintenance of first aid and firefighting equipment, provision of safety arrangements, provision of respiratory protective equipment to workers are some of the many compliances that will now go unchecked.

While the list is endless, in the ‘Other Compliances’ category, restrictions on working hours of women workers, restrictions on women and young children working, restrictions on employment of young persons on dangerous machines, provision of soaps and towels in canteens, provision of protective gloves and footwear to workers exposed to hazards, etc. are all surprisingly part of the list.

‘Order is a weapon in hand of managements’

Speaking to TNM, Centre of Indian Trade Unions (CITU) Telangana unit Vice President S Veeraiah said, “This Government Order becomes a weapon in the hands of the management of factories and industries to exploit the workers. Whatever rights were fought for and gained all these years become nullified with this. This is very dangerous. It will lead to workers being made to work like slaves. The GO must be revoked. The government must do regular checks on whether factory managements are following laws and are maintaining registers as per law. Only then will managements have some fear that will ensure that they will try to implement the rules. In case of self-certification, management will have the last word and it will lead to a free rein.”

‘Provisions of Factories Act was an outcome of Bhopal gas tragedy’

EAS Sarma, former IAS officer who is also a social activist, felt that the lessons do not seem to have been learnt from the unenviable industrial safety record in the two Telugu states.

He said, “It’s surprising that the Telangana government has hastily exempted industrial units from complying with more than 600 requirements under the Factories Act, 1948 on the ostensible grounds that such exemptions will enhance “ease of doing business”. Apparently, those that thought of these over-simplistic exemptions are blissfully unaware of the fact that many of these provisions of the Factories Act were the outcome of tightening regulation in the aftermath of the ghastly Bhopal gas tragedy of 1984. Also, the concerned authorities seem to have forgotten the terrible fire at a chemical unit in Bantupalli near Sangareddy, and the fatal gas leak accident at LG Polymers in Vizag in May last year.”

‘Recipe for disaster’

According to the former bureaucrat, this decision is a recipe for disaster. “What surprised me is the wording in these orders to explain the “deemed” compliance against each of the 600 odd requirements. To cite one example, Item 91, the requirement is “Providing ventilation ducts, pneumatic conveyors and similar equipment involving serious fire risks”. Against this item, the following words appear “Deemed to be complied by the factories managements on submission of Self Certification / Third Party Certification. There shall be no inspection / verification by the Factories Department unless there is a complaint / accident”. In other words, the State Factories Dept has washed its hands of the need for periodic and surprise inspections by saying that the only way that they would come to know of such a serious fire risk is when an accident takes place and innocent lives are lost! Is it not a recipe for disaster?” Sarma questioned.

‘Inspections: A key feature of Factories Act’

Sonam Mittal, a feminist activist with a deep interest in labour rights, questioned why compliance is at odds with ease of doing business. She said, “Why should one happen at the cost of the other? Laws that are meant for social security should not be overlooked for the sake of economic growth. What kind of growth would this be, if at all?”

“Inspections are a key defining feature of the Factories Act. If some factory owner is employing child labourers, should we depend upon their self-certification that they’re following due process? Because of this government order, inspections won’t happen at all unless someone complains. This new rule will effectively make it easier for employers to get away with not providing the required facilities to their employees. A physical inspection is required to ensure that factories are following the law,” added a concerned Sonam.

‘Order will help eliminate procedural delays’

TNM contacted K Manicka Raj, the Commissioner for Industries in Telangana, but he refused to comment on the state government’s order. Industries and Commerce Principal Secretary Jayesh Ranjan said he is confident that the decision will help eliminate unnecessary procedural delays.

“Our experience with TS-IPASS is quite to the contrary. When TS-iPass was introduced to ensure that all approvals and clearances are given within 15 days, similar apprehensions were raised. However, six years and close to 18,000 approvals later, what we have found is that departments have been able to eliminate unnecessary procedural delays without diluting the rigour of decision making, in order to comply with the TS-IPASS timelines. The same is going to be the case with the new GO as well,” he said.

Industrial safety should be given precedence

Experts observed that ease of doing business seems to override the welfare of workers and the well-being of the people directly affected by the industry.

“I hope that someone in the Telangana government has the time and inclination to revisit this over-simplistic exemption order and create an environment in which industrial safety is given top priority,” EAS Sarma said.

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