NEW DELHI, Feb 22: The Indian cabinet on Friday gave the green light to amending a 54-year-old industrial employment law, allowing some employers to dismiss workers without government approval.

The measure was announced by Indian Finance Minister Yashwant Sinha a year ago but was not implemented due to opposition from the then labour minister.

“These and other labour reform measures are likely to be introduced in the coming session of parliament,” government spokesperson N.J. Krishna said.

The next session of parliament is expected to begin on Monday with Sinha unveiling the annual budget on Thursday.

A labour ministry official said the amendments will be a shot in the arm for India’s stop-start economic reforms.

Industrial establishments employing less than 1,000 workers can now lay off staff or carry out closures without prior government permission, raising the threshold from 100 workers, the official said.

As a counterbalance, severance compensation for workers will be increased from 15 days to 45 days for every completed year of service.

Trade unions have opposed the finance minister’s proposals tooth and nail for the past year, saying the government should wait for the report from a labour commission set up in October 1999 to review all labour laws.

The commission, which comprises representatives from trade unions and industry, is expected to submit its report on April 15.

Indian industry representatives on Friday hailed the announcement.

“The second generation reforms have started with a bang,” media reports quoted R.S. Lodha, head of the Federation of Indian Chambers of Commerce and Industry, as saying.

“The approval, coming just before the (federal) budget, sends a strong signal to investors — small, medium and large — on the government’s determination to resuscitate investments locked in sick enterprises,” Lodha said.

According to Lodha, an estimated 200 billion rupees was locked in sick industrial units, which would get a reprieve now.—AFP