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Creating a Conducive Business Environment – Modi 2.0’s Mantra

In its second term, the Narendra Modi government has left no stone unturned in creating a stable, progressive and supportive business environment to work on. Continuing from its legacy of the previous term, the government has continued to tackle the complex domain of legalities with a sense of composure that has been the hallmark of the Prime Minister and his government. When the government in its second term presented Budget 2019, a roadmap was identified towards continued simplification of procedures and red-tape reduction. NaMo 2.0 identifies the fact that a progressive, trustworthy business environment is possible only with continued efforts towards simplification and responding to the requirements as they arise, something it has demonstrated repeatedly.

Labour Law Reforms to Create an Atmosphere of Trust and Consideration

Focus on business environment cannot be done in isolation – an ecosystem has to be adjusted to account for the various contributing factors that serve as its building blocks. Labour Laws are just one such fundamental area, and the Government has not shied away from taking the necessary steps that bring together both the interests of the industry and protection of worker rights.

The Modi government’s Labour and Employment Ministry drafted four Labour Codes - the Code on Wages; the Code on Industrial Relations, the Code on Occupational Safety, Health and Working Conditions; and the Code on Social Security. The new codes distinguish themselves by simplifying, merging and rationalizing the relevant provisions of the existing Central Labour Laws.

Of these 4 Labour Codes, the Code on Wages, 2019, was notified in August 2019 in the Gazette of India. The Occupational Safety, Health and Working Conditions Code, 2019 was introduced in Lok Sabha on 23rd July, 2019 and subsequently got referred to the Parliamentary Standing Committee on Labour for further examination. The Industrial Relations Code, 2019 too got introduced in Lok Sabha in November, 2019, while the Code on Social Security, 2019 shall hopefully be soon passed in Parliament.

Through the introduction and ratification of the revised and simplified Labour Codes, the government has taken big strides in addressing issues related to minimum wage, social security and working conditions for workers. Many of the long-standing demands of social security measures have been finally addressed in these labour codes, thus completing the safety net for workers in India. For instance, in the domain of health care, Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) now provides health coverage up to Rs. 5.00 lakh per family per annum to around 10.74 crore deprived families based on the Socio-Economic Caste Census (SECC) for secondary and tertiary care hospitalization.This, coupled with the Provident Fund coverage expansion in the previous term, combine to create a potent social security framework that comforts several employees.

The approved and proposed codes togethercan create synergies to streamline existing labour laws and synchronize them to the realities of the emerging economic scenario. Unnecessary legal complexities have been done away withthrough steps like providing uniform definitions and reducing multiple authorities under various Acts. With steps like these, a new era of transparency and accountability in enforcement of labour laws has been introduced, and industrialists can finally experience ease of compliance, which is pivotal to promoting the set-up of more manufacturing units across India, especially labour-intensive industries like manufacturing exports.

With the kind of labour codes introduced and adopted, the government is striving hard to create a conducive environment to enhance employment opportunities as well as its formalization along with ensuring safety, social security and welfare of workers. When coupled with the amendments of the Companies Act, one sees a distinct picture carving out – easier regulation is an aspiration of the government for the welfare of this country. The vision of the Prime Minister in helping to introduce the next industrialization wave in India that fulfils the dreams of crores of Indians.

Committing to Roadmap of Simplification and Red-Tape Reduction

Budget 2020, the first budget of the new decade, has seen renewed commitment to simplify processes across the board. Care is taken to ensure simple procedures are introduced for claim settlements under new export-oriented schemes like NIRVIK. On the other hand, the government exhibited great responsiveness when it outlined its plans to implement a simplified GST return system where return filing is simple and is enabled with technology rich features to improve ease. For that matter, the continued adjustments made in GST structure regime also serves as an excellent example of the Modi government’s unwavering commitment to India’s federal structure, wherein the central government is flexible, willing to incorporate good suggestions and continually pursue process simplification wherever and whenever the situation arises.


The continued efforts of the past six years are reflected in India’s ranking improvement in the World Bank Ease of Doing Business index. With the jump in ranking to reach the 63rd spot, there has been a leap of faith in India’s business environment that has taken it from the poor 142nd position that India stood at in 2014. Propelled by measures such as the easier resolution of resolvency, ease in securing construction permits, getting electricity connections and registering property among others, there is reaffirmation of the government’s continued efforts in simplifying the operating environment to conduct business in a fair and transparent manner.


With a committed government once again at the helm, the roadmap is clear. NaMo 2.0 remains committed to ensuring that ‘ease of doing business’ is not reduced to a mere phrase; they are translated into meaningful action. Further, working to ensure that the enabling business environment has the best to offer to even those at the bottom of the pyramid through consolidated labour laws that provide a win-win situation for all demonstrate the intent of the government to resolve a large number of long-pending issues without losing sight of the goal. A nimble business environment that quickly adjusts to changing realities has always been the hallmark of the Narendra Modi government, and this belief stands reinforced in the first year of the second term through deeds and not just words.

May 27, 2020