“Sadanand Dhume mischaracterizes India's recent labor deregulation in "India's Timid Economic Reforms" (East Is East, Jan. 14).
On the contrary, the measures are a huge economic reform. Indian Prime Minister Narendra Modi is eviscerating his nation's socialist employment restrictions, redeploying the more than 600 million strong Indian workforce for more productive enterprise.
Mr. Dhume may think that the newly minted labor codes' permissive hiring rules only apply to private firms that have fewer than 300 workers -- instead of 100 workers like before -- but that's an oversimplified analysis.
About 90% of Indian workers are employed under informal arrangements.
As a result, the overhaul is sweeping in scope. State governments are also now free to lift the employee threshold further to promote large-scale employment and heavy industry. The State Bank of India estimates that liberalizing labor will goose up consumption and augment formal employment by at least 15%. Greater hiring flexibility increases the prospect that Indian manufacturing will achieve economies of scale to become an export juggernaut and better compete against rivals like China.
Employment reforms have bedeviled successive Indian governments since the country first opened its economy to the world in 1991, after nearly half a century of autarky. Mr. Modi's de-control of India's labor factor markets is a rare win for the cause of free markets and free people in a polity with a long history of socialism.
Nathan Punwani, M.D., MPH” [1]
1. A Free-Market Milestone for India's Economy. Wall Street Journal, Eastern edition; New York, N.Y.. 27 Jan 2026: A14.
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