Introduction || Planning Commission
Chapter-1 || 2 || 3 || 4 || 5 || 6 || 7 || 8 || 9 || 10 || 11 || 12 || 13 || 14 || 15 || 16 || 17 || 18 || 19 || 20 || 21 || 22 || 23 || 24 || 25 || 26 || 27 || 28 || 29 || 30 || 31 || 32 || 33 || 34 || 35 || Conclusion || Appendix A || Appendix B || Appendix C || Glossary

Chapter 15:
LABOUR POLICY

Labour policy in lndia has been evolving in response to the specific needs of the situation in relation to industry and the working class and has to suit the requirements of a planned economy. A body of principles and practices has grown up as a product of joint consultation in which representatives of Government, the working class and employers have been participating at various levels. The legislation and other measures adopted by Government in this field represent the consensus of opinion of the parties vitally concerned and thus acquire the strength and character of a national policy, operating on a voluntary basis. Joint committees have been set up to assist in the formulation of policies as well as their implementation. At the apex of this tripartite machinery is the Indian Labour Conference.

RECENT DEVELOPMENTS

2. The structure of industrial relations has been designed for the purpose of securing peace in industry and a fair deal for the wolkers. When the efforts of the parties fail to secure an amicable settlement of industrial disputes, the Government has assumed powers of intervention. Provision has been made for conciliation of disputes and for enabling the State to refer unresolved differences to tribunals set up for the purpose. Stoppages of work after such a reference and any contravention of awards and agreements have been made illegal. This system has helped to check the growth of industrial unrest and has brought for the working class a measure of advance and a sense of security which could not otherwise have been achieved. At the same time, the spirit of litigation grew and delays attendant on legal processes gave rise to widespread dissatisfaction. In the course of the Second Five Year Plan a new approach was, therefore, introduced to counteract the unhealthy trends and gave a more positive orientation to industrial relations, based on moral rather than legal sanctions. The stress now is on prevention of unrest by timely action at the appropriate stages and giving adequate attention to root causes. This involves a basic change in the attitudes and outlook off the parties and the new set of readjustments in their mutual relations.

3. A Code of Discipline in Industry, which applies both to the public and to the private sector, has been accepted voluntarily by all the Central organisations of employers and workers and has been in operation since the middle of 1958. The Code lays down specific obligations for the management and the workers with the object of promoting constructive cooperation between their representatives at all levels, avoiding stoppages as well as litigation, securing settlement of disputes and grievances by mutual negotiations, conciliation and voluntary arbitration, facilitating the free growth of trade unions and eliminating all forms of corcion and violence in industrial relations.

4. The Code provides that a regular grievance procedure be laid down in all undertakings and complla4its should receive prompt attention. The legal means of redress and the normal channels should be fully availed of and there should be no direct, arbitrary or unilateral action on either side. Under the Code, management and workers have agreed to avoid litigation, lock-outs, sit-down and stay-in strikes. There will be no recourse to intimidation, victimisation or 'go-slow'. The unions have also agreeed not to engage in any form of physical duress and to discourage unfair practices such as negligence of duty, careless operation, damage to property, interference with or disturbance to normal work and insubordination. The employers have to allow full freedom to workers in the formation of trade unions; and to abide by the criteria adopted for determining which union has a better claim to recognition. A union guilty of a breach of the Code of Discipline loses its right lo such recognition. Both sides are pledged to the scrupulous and prompt implementation of awards, agreements settlements and decisions. Organisations of employers as well as workers have bound themselves to express disapproval and take appropriate action against officers, officebearers and workers who violate the letter or spirit of the Code.

5. It is obvious that a new concept with such far-reaching aims, in a difficult field, requires a considerable period of earnest endeavour before it gets firmly established in practice. The results so far achieved are, however, encouraging both in terms of the reduction of man-days lost owing to stoppages and in bringing about a general improvement in the climate of industrial relations. The number of man-days lost declined steadily and significantly from 47 lakh during: January-June 1958, the six months prior to the introduction of the Code, to 19 lakh during July-December, 1960. The Code has also been successful in creating an awareness amongst the employers and workers of their obligations towards each other ; the desire to settle disputes mutually without recourse to the wasteful methods of trial of strength and litigation is steadily growing.

6. The deplorable consequences of inter-union rivalry both for industry and for the workers are well-known. They have been mitigated to some extent by the Code of Conduct which was drawn up and accepted by the representatives of workers' organisations three years ago. The-Code provides that every employee shall have the freedom and right to join a union of his choice. Ignorance and backwardness of workers shall not be exploited by any organisation. C'asteism, communalism and provincialism shall be eschewed by all unions and there shall be no violence, coercion, intimidation or personal vilification in inter-union dealings. It is enjoined that there shall be unreserved acceptance of and respect for democratic functioning of trade unions and all Central organisations shall combat the formation and continuance of company unions.

7. The failure to implement awards and agreements has been a comi-pon complaint on,' both sides and if this were to continue, the Codes would be bereft of all meaning and purpose. A machinery for implementation and evaluation has, therefore, been set up at the Centre and in the States to ensure observance by the parties 01' the obligations arising from the Codes and from laws and agreements.

8. Two lines of advance during the period of the Second Plan deserve special mention because of their great significance as elements of labour policy and for the reason of the great promise they hold for the future. In the first place to give the workers a sense of belonging and to stimulate their interest in higher productivity, a form of workers' participation in management was evolved during the Second Plan. A small beginning was made in this direction on an experimental bas.s and Joint Management Councils have been set up so far in 23 units. The Council has the right to obtain information regarding the working of the undertaking and lias direct administrative responsibility for matters concerning workers' welfare, training and allied matters. Its main function is to bring about mutual consultation between employers and workers over many important issues which affect industrial relations. In a seminar held in March. I960, representatives of employers, workers, State Governments and others concerned reviewed their exper^nce of the working of the Joint Councils and the solutions they had evolved for spscific problems. Keeping in view the short duration of the experiment, its results have been found to be satisfactory and heartening. Secondly, after completion of the preparatory stage, the programme of workers' education has made a good start and is being widely appreciated. The scheme comprises the training of teacher-administrators and worker-teachers. The latter, on returning to their establishments on the completion of their training, start unit-level classes for the rank and file of the workers. According to an independent appraisal of the working of this scheme, these courses have helped to raise the self-confidence of the workers, increased their ability to take advantage of protective labour laws. reduced their dependence upon outsiders and inculcated in them an urge for material and economic welfare. A beginning was made in sponsoring investigations on labour problems through independent research institutions with Government support.

APPROACH AND OUTLOOK

9. The coming years should witness the fuller impact of the ideas which have been tried and found useful during the Second Plan period. The Third Five Year Plan has to make its own contribution towards tho evolution of labour policy and the realisation of (ts basic aims. It has always to be kept in view that the measures that are adopted must serve adequately the immediate and long-term ends of planned economic development. Economic progress has to be rapid enough to attain a level of full employment, and secure a rising standard of living for the people. The fruits of progress should be shared in an equitable manner and the economic and social organisation which is being created must be in keeping with the concept of a socialist society. In the implementation of these objectives the working class has an important role and a great responsibility, and these will grow with the rising tempo of industrialisation, The large expansion of the public sector which is occurring and is being envisaged will make a qualitative difference in the tasks set for the labour movement and will facilitate the transformation of the social structure on the lines of the socialist pattern in view?. The implications of this approach are manifold. Economic activity has not to be conceived of solely in terms of output and return ; the principal test of this would be the good of all those who are engaged in it. the quality and growth of the individual human being and the service and happiness of the entire community. The surpluses that are generated are a social product, to which neither the employer nor the working class can lay an exclusive claim ; their distribution has to be according to the worth of the contribution of each. subject to the requirements of further development and the interests of all the sections of society, in particular the satisfaction of the basic needs of all its members. While jobs and functions may vary, all are workers of different grades. Those of the lowest rank and their children should be fortified in the faith that they are free to equip themselves to be able to rise to the highest positions and that the worker and management are joined in partnership to strive for common ends. Thus, a new type of community is being created in which individuals and groups are moved more by a sense of mutual obligations than the spirit of acauisitiveness or the making of private gains at the expense of the genera] well-being.

INDUSTRIAL RELATION

10. The development of industrial relations in the Third Five Year Plan rests on tlie foundations created by the working of the Code of Discipline which has stood the strain of the test during the last three years. A full awareness of the obligations under the Code of Discipline has to extend to ail the constituents of the Central organisations of employers and workers, and it has to become more and more a living force in the day-to-day conduct of industrial relations. The sanctions on which the Code is based have to be reinforced, relying on the consent of the parties, for this purpose.

11. Ways will be found for increasing the application of the principal of voluntary arbitration in resolving differences between workers and employers. Steps will be taken to remove certain hindrances in the way of a fuller recourse to voluntary arbitration. The same protection should be extended to proceedings in this case, as is now applicable ta compulsory adjudication. Government should take the initiative in drawing up panels of arbitrators on a regional and industry-wise basis. Employers should show much greater readiness to submit disputes to arbitration than they have done hitherto. This has to be the normal! practice, in preference to a recourse to adjudication, as an important obligation accepted by the parties under the Code.

12. The law provides for the establishment of Works Committees at the plant level in order to develop harmonious relations between employers and workers. According to a recent assessment, the system has proved its capacity to render substantial heir? in composing differences between the parties though, owing to lack of earnest effort, the Committees are not functioning effectively in same units. The decision to demarcate the functions of Works Committees, as distinct from those of trade unions, will remove an obstacle in the way of the successful functioning of the Committees. It is, thus, essential that Works Committees are strengthened and made an active agency for the democratic administration of labour matters,

13. Joint Management Councils.—A major programme for the period of the Third Five Year Plan will be the progressive extension of the scheme of Joint Management Councils to new industries and units so that, in the course of a few years, it may become p. normal feature of the industrial system. As it develops, workers' participation may become a highly significant step in the adaptation of the private sector to fit into the framework of a socialist order. It can serve to bridge the gulf between labour and management; creat" better mutual understanding and facilitate the adoption, on both sides, of an ob'"ective apy-oaf-h towards the problems of industry and the workers. The success or failure of an undertaking is not the concern of management alone. For the peaceful evolution of the economic system cm a democratic basis, it is essential that workers' participation in management should be accepted as a fundamental principle and an urgent need, In course of time, management cadres should arise out of the working class itself. This will greatly help to promote social mobility which is an important ingredient of a socialist system.

14. Joint Management Council should be setup in all establishmemts in the public as well as the private sector in which conditions favourable to the success of the scheme exist. A primary test of eligibility is the presence of goodwill on both the sides. Wherever a representative union exists, a Council should come into being as a matter of course. An intensive programme of workers' education will be undertaken in all the establishments where such Councils are set up.

15. Workers' education.—The programme of workers' education which Government has undertaken through a semi-autonomous Board is being run with the cooperation of all the employers' and workers' organisations. A large-scale expansion of this scheme is visualised for the period of the Third Plan. Tt is intended to diversify the prc|gramme and secure fuller association of workers' representatives and their organisations. The complementary question of management training in labour matters is also receiving consideration.

16. The spread of literacy among the workers is an indispensable precondition for the success of the various programmes that are being undertaken. The benefit of literacy should be made available to as large a number of workers as possible in the next few years, particularly to those below the ase of forty.

17. Trade unions.—There is need for a considerable re-adaptation in the outlook functions and practices of trade unions to suit the conditions which have arisen and are emerging. Thev have to be accepted as an essential part of the apparatus of industrial and economic administration of the country and should be prepared for the discharge of ihe responsibilities which attach to tirs position. Trade union leadership has to grow progressively out of (he '•anks of the workers, and this process will be "reativ accelerated as the programme of workers' education gathers momentum. At present, the trade unions are in most cases labouring under the handicap of insufficient resources and are not in a position to obtain all the help and guidance that they need.

18. The basis tor recognition of unions, adopted as a part of the Code of Discipline. \vW pave the way for the growth, oif a strong and healthy (Trade unionism in the country. A union can claim recognition, if it has a continuing membership of at least 15 per cent of the workers in th" establishment over a period of six months and will be entitl'ed to be recognised as a representative union for an industry or a local area. 'f it has membership of at least 25 per cent of workers. Where- there are several unions in an industry or establishment, the union with the largest membership will be recognised. Once a union has been recognised, there should be no change in its position for a period of two years, if it has been adhering to the provisions of the Code of Discipline.

19. The personnel of the industrial relations machinery calls for greater attention in respect of selection as well as training. It is necessary to ensure that the quality aad equipment c'f conciliators and tribunals are adequate for the complex tasks which now confront them . It is proposed to institute a suitable training programme for this purpose.

WAGES AND SOCIAL SECURITY

20. The Government has assumed responsibility for securing a minimum wage for certain sections of workers, in industry and agriculture, who are economically weak and stand in need of protection. Towards this end the Minimum Wages Act provides for the fixation and revision of wage rates in these occupations. These measures have not proved effective in many cases. For better implementation of the law, the machinery for inspection has to be strengthened. Wage determination in major industries is left to the process of collective bargaining, conciffia-tion, arbitratipn and adjudication. The Second Plan recommended the setting up of Wage Boards as the most suitable method of settling wage disputes where large areas of industry are concerned. This has so far been applied to the cotton and jute textiles, cement, sugar and plantation industries; and will be extended to other industries according to circumstances. It has been decided to appoint a Board soon for the iron and steel industry. The representatives of employers and workers have agreed that unanimous recommendations of a wage board should be implemented fully. An encouraging trend has been noticed in the coal mining industry where employers and workers have agreed to set up a bi-partite committee to examine the entire question of wage revision in the industry; alternative wage-fixing machinery wil] be considered only if the bi-partite committee fails to arrive at a settlement.

21. Some broad principles of wage determination have been laid down in the Report of the Fair Wages Committee. On the basis of agreement between the parties, ths Indian Labour Conference had indicated the content of the need-based minimum wage for guidance in the settlement of wage disputes. Th;'s has been reviewed and it has been ag'eed that the nutritional requirements of a working class family may be re-examined in the light of the most authoritative scientific data on the subject. Apart from the minimum wage, care should be taken in fixing fair wages for different classes of workers, that adequate incentives are provided for the acquisition and development of skills and for improvements in cutout and quality. Thsre pr", however, wide disparitfes between the wages of the working class, on the one hand, and the salaries at the higher management levels, on the other.

22. Owing to the uncertainty attaching to it. the question of bonus has become a source of friction and dispute. It has been decided to appoint a Commission which will include representatives of both parties to study the problems connected with bonus claims and to evolve guiding principles and norms for the payment of bonus.

23. Social Security.—The Employees' State Insurance Scheme has now been implemented in more than a hundred centres revering about 17 lakh industrial workers. During the Third Plan period, the scheme will be extended to all centres where there is concentration of five hundred or more industrial workers, bringing-the total coverage to about 30 lakh workers. Medical care and treatment including hosnita-lisation and midwifery services will be extended to the families of insured persons in all centres where the scheme is in operation. The prwn-tive aspects will also receive greater attention. A great deal of leeway remains to be made no in the provision of separate hospital accommodation for the insured workers. The construction of new hospitals and dispensaries will be speeded up so as to add at least 6000 hospital beds during the period of the Third Plan.

24. The Employees' Provident Fund Scheme, which now covers 58 industries/establishments wil] be further 'extended. The employment limit for coverage under the scheme has already been lowered from 50 to 20. The Provident' Fund Organisation has completed a survey of other industries and during the Third Plan the scheme will be extended to such industries among these as are able to bear the financial burden. The proposals to enhance the rate of contribution to the provident fund from 61 to 8^- per cent has been already accepted by Government in principle, but in view of the varying capacity of different industries, a Technical Committee has been constituted to ascertain which industries are not capable of bearing the additional liability. It is also proposed to bring employees of commercial establishments within the purview of the scheme.

25. A Study Group on Social Security had rcom mended the integration of existing social security schemes and the conversion of the various Provident Fund schemes into a statutory scheme for old age, invalidity and survivorship pension-cum-eratuity. Urgent consideration has now to be ffiven to the various aspects of the question of integration,, so' that the entire scheme takes shape as early as possible.

26. The social security approach has so far extended mainly to wage earners in organised industrv. There ye some groups whose condition cat's for closer attention on the part of the community. Th the past. on account of the traditional values associated with the smill cnm-mnn'tv and the wnt family, a great deal of relief was available to those who were unable to provide for themselves. For a long period to come. in one form ur another, the community, the group and the family must continue to be the main sources of assistance. Progressively, however, the State and local bodies, both urban and rural, will need to participate in schemes undertaken by way of social assistance and social security. Even at this stage, it would be desirable to make a modest beginning in respect of three groups of persons—the physically handicapped, old persons unable to work, and women and children-where they are altogether lacking in the means of livelihood and support. Assistance for them will have to come from voluntary and charitable organisations, municipal bodies, Panchayat Samitis and panchayats and voluntary organisations. With a view to enabling these organisations to develop their activities with the help of local communities, and giving them a little support, it might be useful to constitute a small relief and assistance fund. Details of the proposal should be considered further in cooperation with States and voluntary organisations.

WORKING CONDITIONS, SAFETY AND WELFARE

27. Under various laws a comprehensive code has been developed to ensure satisfactory v/orking conditions, safety of person and the provision of a variety of facilities to promote the welfare of the workers. Steps, however, have to be taken to make the implementation of the statutory provisions more effective. The improvement of working conditions can result in greater productive efficiency on the part of the workers. Every effort should be made to keep abreast of the modern developments in these and various other aspects relating to the human factor in industry. Towards this end, the activities of the the Central Labour Institutes and the three Regional Labour Institutes should be developed to provide a comprehensive service to industry through training, education and research. The problem of safety should receive greater attention. A Standing Advisory Committee will be set up to promote measures for bringing down the incidence of accidents in factories." State Governments have to strengthen the inspectorates provided for the administration of factory laws. Both in factories and in mines, a great deal of scope remains for reducing hazards bv education of the workers in safety-consciousness and the setting up of safety committees. Sleps are being taken in pursuance of the recommendations of the Mines Safety Conference and its various committees, and intensive studies are in progress concerning various aspects of the problem of safety in all mines. A National Mine Safety Council is proposed to be set up regardina; safety education and oropayanda in the mining industry In view of the rapid expansion of the output of mines and the increase in depths and mechanisation to which it leads, it has become imperative that there should be greater vigilance and stricter pntorcement of rules and regulations. The building and construction industry is a similar field in which rapid programmes' of expansion call for greater attention to safety standards. While the Central and State Public Works Departments are among the major employing authorities, a significant amount of building and construction work is in private hands. Working conditions at construction sites are very different from those in factories, primarily because of the purely "temporary" basis upon which most of the work is organised. The question of separate safety legislation for building and construction workers is under examination. Industrial hygiene surveys undertaken so far have disclosed that exposure to occupational disease has been increasing. The surveys should cover the remaining industries and prompt remedial action should be taken in each case. Special welfare funds have been constituted for financing welfare measures for workers in the ccal and mica mining industries. They are meeting very real needs. Similar funds are proposed to be created for workers in the manganese and iron ore mines.

28. Workers' Cooperatives—Some progress has been made in the formation of miners' cooperative societies through the help of the Coal Mines Welfare Fund Organisation. A few workers' cooperative housing societies also exist in some industrial centres. On the whole cooperation has not made much headway so far as the working class is concerned. It will derive immense benefit from the extension of cooperative activity in various forms. Campaigns should be undertaken for setting up cooperative credit societies and cooperative consumers stores. It is hoped that trade unions and voluntary organisations will evince greater interest and initiative in running such cooperatives.

29. Industrial Housing.—Although the Subsidised Industrial Housing Scheme has been in operation for some years, the situation in respect of the housing of industrial workers has not improved and, in several centres, it has even deteriorated. The present approach to the problem has been found to be wholly inadequate and new ways will have to be devised immediately so that the workers may be assured of minimum standards in respect of living conditions within a reasonable period in the interest of their health and efficiency. Towards the same end, facilities for recreation and sports will have to be greatly enlarged for all sections of the workers.

30. Other Problems.—With the help of studies which are now in progress regarding contract labour, it will be possible to select occupations in which contract labour will not be permitted and, where abolition is not feasible, to decide on the steps which can be taken to safeguard fully the interests of contract workers. While considerable improvement has occurred in the living and working conditions of employees in large and organised industries owing both to State activity and trade union action, a great deal of leeway remains to be made up in respect of the workers engaged in agriculture and unorganised industries, Their conditions should become a matter of special concern to the Government as well as to the organisations of labour.

EMPLOYMENT AND TRAINING SCHEMES

31. A large increase in the demand for craftsmen will have to be met during the Third Plan. By the end ul the Second Plan period, there were lt)6 industrial training institutes with 42,000 training seats. It is intended to increase the number of these institutes to a total of 318 by the end of the Third Plan with an additional 58,000 seats, raising the training capacity to 1 lakh craftsmen and an estimated out-turn of 2 lakh craftsmen during the Plan period. Adequate in-plant training facilities will also be provided. Separate facilities have been organised ror the training of educated youth in the techi-ques of management so that such of them as have the inclination and aptitude for undertaking business responsibilities on their own or through cooperatives, will be provided with wider employment opportunities.

32. The capacity of the three existing Central Training Institutes for Craft Instructors will be raised trom 512 to 976 seats and three other Central Institutes will be set up during the Third Plan period. As against 2000 in the Second Plan, 7800 instructors will be trained during the Third Plan. Separate arrangements are being made to train women craft instructors.

33. During the Second Plan, little progress has been registered under the apprenticeship training scheme, which has so far been carried out on a voluntary basis. It has now been decided to place the scheme on a compulsory footing and a Bill on the subject is proposed to be introduced in Parliament. A target of 14,000 seats has been set for the apprenticeship training programme. The target for the programme of evening classes for industrial workers is to raise the present 3,000 seats to 15,000 seats during the Third Plan.

34. One hundred employment exchanges will be opened during the Third Plan with the object of providing at least one exchange in each district. It is also intended to increase the number of rural employment exchanges and strengthen the organisation of the State Employment Directorates. An effective start has been made with the Employment Market Information programme; the scheme now covers all public sector establishments and private sector units in 150 areas. The scheme will be extended to all areas covered by employment exchanges. Similar provision has been made for expanding the programme of Youth Employment Service. Youth Counselling and collection and analysis of occupation information undertaken by the exchanges.

35. Closures of establishments have occurred to a varying extent in certain industries during the last few years. Where unfavourable market conditions develop, marginal units are affected severely unless steps are taken in advance to safeguard their position. In several cases, the collapse follows a prolonged period of neglect and mismanagement. The workers, who are thrown out of employment, often fail to find avenues for absorption in other units in the same industry. It often happens that besides losing their jobs these workers are deprived of arrears of wages and even the collections in respect of Provident Fund or Employees' State Insurance cannot be recovered from the employers. As a result, the workers have to face acute distress.

36. It becomes evident that having regard to the human aspect, and for the purpose of preventing a sense of demoralisation among other workers, steps will have to be taken to afford a measure of relief and assistance to retrenched workers who are thus reduced to a state of helplessness. In a fully developed form such a scheme has to be on a contributory basis, with adequate support from the Government, and besides assistance and relief to the retrenched workers, its functions might include :

1. help to industrial units which are temporarily in financial difficulties but have otherwise a reputation for efficiency and good management;
2. taking over units for temporary management; and
3. financing, in suitable cases, co-operative ventures of workers threatened by closures.

A start has, however, to be made immediately, and it has now been decided to draw up a scheme of a limited scope to furnish such assistance as is practicable in the existing circumstances. This will be in the form of loans to tide over the immediate difficulties and facilities for retraining for alternative occupations and for transfer to other places where work may be available. A small financial provision has been made in the Plan for this purpose. -

PRODUCTIVITY

37. Industry is being called upon to meet, as rapidly as possible, the claims on behalf of the workers for a living wage, better living and working conditions, the needed volume of employment opportunities and a fuller measure of social security. It must yield a reasonable return on capital and provide for capital formation on an adequate scailie. Nedther the exercise of their organised strength in industrial conflicts, nor laws and the intervention of the State can help the workers much in realising their aspirations. Their gains can arise only out of the strength and dynamism of the economy, the only enduring basis of which is a rising level of productivity. No increase in profits which does not come out of improvements in productivity but has its origin m current scarcity and the stresses of development, can be regarded as a sign of prosperity. Productivity has many facets and it suffers because of the one-sided and rigid approach which is frequently adopted in dealing with it both by the employers and the workers. Rationalisation of effort in every direction is the true basis of productivity. The term has often been wrongly associated with increase in workloads and added strain on workers in order to swell ttie volume of private gains. Large gains in productivity and an appreciable reduction in unit costs can be secured in many cases without causing any detriment to the health of the workers and without incurring any large outlays. Greater responsibility in this respect rests on the management which should provide the most efficient equipment, correct conditions and methods of work, adequate training and suitable psychological and material incentives for the workers. For several purposes, it will be more helpful to take the working group as unit of activity rather than the individual worker, and the scheme of incentives should be aimed, at the group no less than at the individual. The industry, trade unions and the Government should together ensure that every worker whether employed already or freshly recruited receives adequate training to acquire the requisite skill and efficiency. By proper organisation, it should be possible to supply the essential needs of the workers at reasonable cost without unduly increasing the burden on industry. Management has to give the lead by bringing about the maximum rationalisation in its own sphere and eliminating all unjustifiable practices which at present act as dis-incentives in drawing the best out of the workers. The vicious circle of poverty and unemployment and low productivity can be broken only by a tremendous stress on the maximum possible contribution being made by all the participants in the processes of production. For the workers no real advance in their standard of living is possible without a steady increase in productivity, because any increase in wages generally, beyond certain narrow limits, would otherwise be nullified by a rise in prices. Workers have, therefore, to insist on and not resist the progress of rationalisation in their own interest and in the larger interest of the country.

38. The pace of development as well as the volume of employment rests to a considerable extent on the capacity to export in the face of increasing competition. This can be achieved primarily through higher productivity and a measure of sacrifice by the employer, the worker and the rest of the coirn;iunity.

39. Vital reforms cannot be secured without the cooperation and goodwill of the workers. They can be brought about by creating a proper understanding and the provision of the necessary safeguards in the interests of the workers. The greatest anxiety experienced by the workers is with regard to the stability of employment. The agreement regarding rationalisation at the national level guarantees to the workers security in their existing jobs. The scope for rationalisation can be considerably extended if effective arrangements are made for retraining and transfer to other jobs on the basis of the workers' consent. The workers can be expected to respond. A favourable environment for this should be created. This process will be helped greatly by the agreement reached at a seminar organised by the National Productivity Council, which provides an initial basis ror cooperation tor higher productivity. The formulation of the Code of Efficiency and Welfare will now be taken up for consideration by the Indian Labour Conference. Greater attention will also have to be given to the training of management at various levels in the important aspects of employer-employee relations. Systematic studies will have to be undertaken for determining the individual wage differentials and the manner in which wages should be linked to productivity. In this connection, the work of the Training-Within-Industry Centre in introducing T.W.I, and other techniques for improving the managerial and supervisory skills and that of the Productivity Centre in training in the higher productivity techniques and in carrying out field investigations like job evaluation and work load studies have helped in stimulating the interest of both management and workers. Further development in this field can be of considerable assistance in evolving rational wage policies.

RESEARCH

40. Government undertakes special programmes of studies and surveys of aspects such as working and living conditions, family budgets, wage census, index of earnings, patterns of absenteeism, productivity, etc. There will be further extension of this activity during the period of the Third Five Year Plan.

41. The inadequacy of reliable data on labour matters available at present and the need for sustained and objective research on a systematic basis were discussed at a Conference on Labour Research held in September, 1960. It was agreed that, to begin with, a small Central Committee for coordinating labour research, comprising, representatives of Government, employers' and workers' organisations, universities and institutions interested in the subject may be constituted. It should be the function of this body to make a survey of the existing agenciess in the field and their physical resources, identify the gaps, explore possibilities of filling up the same, determine priorities, allocate research schemes to the various agencies in order to avoid overlapping, stimulate research work in the labour field and recommend means of utilising the results of such research. It is intended to provide for research in labour matters some new institutional facilities outside the set-up of the Government. It will have the association and assistance of organisations of workers and employers as well as others.