The Survey's bureaucratic doublespeak about "economic freedom" and "deregulation" has one clear target: the 48-hour workweek limit in the 1948 Factories Act. This restriction, the Survey claims, prevents manufacturers from "meeting demand surges and participating in global markets".
Published Feb 05, 2025 | 4:57 PM ⚊ Updated Feb 05, 2025 | 5:45 PM
Women working in a factory.
Synopsis: The Economic Survey 2024-25 advocates for dismantling labour protections and regulatory oversight in pursuit of achieving “developed nation” status by 2047, framing worker safeguards as barriers to development and proposing longer workweeks beyond the current 48-hour limit. The policy vision aligns with advocacy by corporate leaders, while experts warn this growth-obsessed approach ignores the very purpose of development and could deepen inequality.
How many hours should Indian workers work every week for the country’s development? It may depend on who you ask. Since at least 2023, Infosys co-founder and billionaire Narayana Murthy has advocated for at least 70 hours.
Even a fierce backlash from experts and regular citizens has only made him dig in his heels further. He’s even found support among several fellow entrepreneurs and industrialists. Early this January, Larsen & Toubro (L&T) Chairman SN Subrahmanyan topped them all when he suggested 90-hour workweeks for his employees, among other comments, in a viral clip, inviting much derision.
Amidst all the farcical discourse, policymakers in Delhi appear to have taken note. The recently released Economic Survey 2024-25 presents a vision that gives such ideas policy backbone: a systematic dismantling of labour protections, wrapped in the same rhetoric Murthy and Subrahmanyan espouse — economic growth.
The Survey’s bureaucratic doublespeak about “economic freedom” and “deregulation” has one clear target: the 48-hour workweek limit in the 1948 Factories Act. The Survey claims this restriction prevents manufacturers from “meeting demand surges and participating in global markets.”
The alignment between corporate advocacy and policy recommendations is not coincidental.
It stems from what economist Narendra Pani observes as a fundamental warping of priorities: “Somewhere along the way, particularly after liberalisation, our entire development discourse has become fixated on growth. However, development typically encompasses multiple aspects: Growth plus social welfare. There could also be concepts of development as freedom that go beyond economic freedom. Unfortunately, in India, we’re focused entirely on growth. We measure our success by growth rates, regardless of its impact on social indicators. That’s the heart of the problem.”
The survey lays out an ambitious vision for India: A sustained 8 percent annual growth to become a developed nation by 2047. To achieve this, it prescribes a dramatic increase in investment rates from 31 percent to 35 percent of the Gross Domestic Product (GDP) and demands the creation of 78.5 lakh new non-farm jobs annually until 2030.
GDP is a measure of the total value of all goods and services produced within a country over a specific period.
But how to achieve these ambitious numbers? According to the survey, a wholesale dismantling of worker protections under the banner of what it calls “systematic deregulation.”
Essential worker protections are framed as “binding constraints” and “regulatory burdens.” Basic safety standards are dismissed as “gold-plated” regulations set with “inflated assumptions.” It argues that regulations “hurt workers by discouraging job creation.”
The survey’s vision particularly emphasises the role of micro, small, and medium enterprises (MSMEs) in achieving these ambitious targets. It acknowledges that MSMEs are critical drivers of “economic growth, employment generation, and innovation.”
However, it argues that regulatory compliance burdens disproportionately affect these smaller enterprises, forcing many to “remain under the regulatory radar and steer clear of the rules and labour and safety laws.”
This creates what the survey calls a parallel informal economy, trapping both businesses and workers in a cycle of low productivity. “By staying small, firms lose access to institutional capital, skilled talent, and technology infusion and often function outside formal supply chains,” the Survey notes.
The logic here suggests that protecting workers’ rights somehow harms them — a position that aligns with what Professor Pani explains as a development discourse “fixated on growth, regardless of its impact on social indicators.”
Professor Pani notes, “In the first phase of reform and liberalisation, the goal was to remove constraints on investment and growth. Now, the focus is primarily on improving the ease of doing business. This includes policies on establishment closure and weakening labour laws. We’ve become so focused on growth that we’ve lost sight of its very purpose.”
He continues, “This shift will lead to the loss of several labour rights, there’s no doubt about it. If we’re claiming that growth is only possible through these means, that becomes problematic.
“When planning national development by reducing basic worker protections and life necessities, you create situations where workweeks extend to 70 hours or more, where business feasibility becomes entangled with keeping certain population segments on low wages.”
The Economic Survey’s approach to labour reform appears based largely on the erosion of worker rights. Take the survey’s seemingly technical objection to Section 51 of the Factories Act (1948): “No adult worker shall be required or allowed to work in a factory for more than forty-eight hours in any week.”
The Factories Act was a result of prolonged labour agitation throughout the decade against brutal working conditions – including 14-hour workdays, rampant child labour, and frequent accidents – under inadequate colonial-era regulations. The newly independent India saw worker protection as essential to both social justice and industrial development.
While other countries allow these hours to be “averaged” over longer periods, the survey presents this flexibility not as a worker’s right but as a business necessity for “meeting demand surges and participating in global markets.”
More troubling is the survey’s admission about enforcement capacity: Just 644 inspectors oversee 3,21,578 factories nationwide. Yet instead of addressing this severe understaffing, the document uses it to argue for reduced regulation.
“Under low-state capacity administrative systems, unrealistic expectations can lead to ‘premature load-bearing.'” This seemingly technical observation masks a crucial choice: Instead of building state capacity to enforce necessary protections, the solution is to remove the protections themselves.
The survey frames this weakening of oversight as “risk-based regulation.’” It celebrates the Jan Vishwas Act 2023’s decriminalisation of 183 provisions across 42 central Acts, without examining how this might affect worker safety and rights.
Ironically, the same document that envisions India as a developed nation by 2047 argues that the country’s state capacity is too limited to enforce basic worker protections.
The survey also advocates the removal of restrictions on women’s factory work, framing it as a progressive step toward gender equality.
“India’s ten most populous states collectively impose 139 prohibitions on women from participating in specific factory processes,” it states. Its solution is straightforward elimination of these restrictions, citing that even for processes like lead manufacturing, there’s “no evidence of special health risks to women workers.”
However, this framing fundamentally misrepresents the issue. While correctly noting that some processes pose no gender-specific risks, it conspicuously ignores the broader context of workplace safety, infrastructure, and support systems. The real barriers to women’s workforce participation — inadequate transportation, lack of childcare facilities, workplace harassment, and safety concerns — receive no mention.
The survey does propose some constructive reforms. It recommends that states undertake a “systematic review of regulations for their cost-effectiveness” through a three-step process: Identifying areas for deregulation, comparing regulations with other states and countries, and estimating the cost of each regulation on individual enterprises.
The evidence is in the survey’s own examples. It approvingly cites how “Haryana and Tamil Nadu amended their building regulations 12 times in the past decade,” and how various states have “relaxed the prohibitions on employing women in night shifts.”
It praises states’ “engagement with businesses to identify pain points” but remains silent on engagement with workers or unions. States are encouraged to “learn from each other’s recent deregulation experiences” — effectively creating a template for systematic reduction of protections.
Most revealing is the survey’s framing of state-level competition. It points to a “positive correlation between the ease of doing business in states and the level of industrial activity,” using this to advocate for “deregulation and enterprise-friendly reforms in aspiring and emerging states.”
This simplistic correlation ignores what Professor Pani notes as the fundamental problem: “This process has become internally inconsistent, transferring wealth to people who are already well-off.”
The document’s enthusiasm for state-level experimentation with deregulation comes with a glaring omission: Any discussion of minimum standards or worker protections that should be maintained across states.
Instead, regulatory differences between states are seen purely through the lens of “competitive advantage” — a framework that inherently incentivises reducing worker protections to attract investment.
Rather than genuine gender equality, In this case, women workers become a new pool of potentially exploitable labour.
International examples in the document showcase selective evidence. It points to the United States’ controversial Department of Governmental Efficiency, the UK’s “one-in, two-out” regulatory principle, and even cites an op-ed by Argentina’s divisive president Javier Millie.
The document promotes “averaging” work hours over longer periods, citing “certain countries” as examples. Yet it conveniently overlooks how these same nations pair such flexibility with robust trade unions, comprehensive social security, and strict enforcement mechanisms.
Take Britain’s ‘one-in, two-out’ rule, which the Survey presents as a model worth copying. The system requires that for every unit of new regulatory burden, authorities must remove two units worth of existing regulations. However, the survey remains notably silent about the UK’s strong social safety net, universal healthcare, and influential labour unions that help balance out deregulation’s effects.
Even more revealing are the survey’s omissions: No mention of Nordic countries that successfully combine high productivity with strong worker protections, no analysis of Germany’s thriving Mittelstand model with its emphasis on labour participation, and no examination of how East Asian tigers balanced growth with social protection during their developmental phase.
The Economic Survey’s vision of development through deregulation represents a clear policy choice.
“What’s happening now is that this process has become internally inconsistent, transferring wealth to people who are already well-off. This is increasing inequality,” Professor Pani notes.
“This has reached a point where it’s generating a massive political reaction. What we’re seeing now is what people call “freebies,” which are essentially welfare measures. But if you keep shifting income away from the poor, it affects consumption. The demand declines, and that’s part of the problem behind lower growth rates.
“The ease of doing business is not the only aspect of development, and it certainly cannot come at the cost of fairness.”
The survey’s vision might well deliver the growth numbers it targets — 8 percent annually until 2047. However, as it champions policies that would allow longer workweeks, reduced oversight, and the averaging of work hours over extended periods, it raises fundamental questions about who this growth serves.
The question isn’t just whether India will achieve its growth targets, but what kind of society it will become in pursuing them.
