NEW DELHI: Just days before the 2014-15 Union Budget, the government on Monday said it plans to amend the archaic Factories Act, 1948 – the first move in more than a decade to revamp labour laws. Most governments have avoided labour reforms for fear of a backlash from the politically powerful labour lobby.

Companies have cited obsolete labour laws as a key hurdle for doing business and the government’s move is expected to send positive signals as it gets down to the business of attracting investment. It also fits in with its pledge to ease the processes of doing business and make India an attractive destination, revive the manufacturing sector and create jobs.

Minister of state for mines, steel and labour Vishnu Deo told the Lok Sabha in a written reply that the proposed major amendments would include relaxing restrictions on night duty for women in factories subject to certain conditions and increase in the limit of overtime to 100 hours (existing 50 hours) in a quarter.

It would also include provision of protective equipment for safety of workers and more precautions against fumes and gases. The central government would be empowered to make rules, a departure from the current practice where states frame the rules.

Experts said the proposed changes to the Factories Act would benefit workers and employers and ensure health safeguards for employees. The plan to allow women to work in night shifts would also benefit several sectors such as textiles and garments. They, however, said adequate safeguards need to be put in place to ensure security of women workers.

“Changes to the Factories Act will help reduce red tape, end inspector raj and also bring in transparency for workers and employers,” said Sanjay Bhatia, president, Ficci confederation of micro small and medium enterprises.

The intention to amend the obsolete Act comes shortly after the Vasundhara Raje government in Rajasthan moved to amend four central laws which include the Industrial Disputes Act, the Contracts Labour Act, the Factories Act and the Apprenticeship Act. Labour laws are in the concurrent list which means both central and state legislations operate.

Current rules stipulate that the Factories Act would be applicable to manufacturing units employing 10 workers and operating on power and 20 employees for those units without power.

Industry experts said the intention to move ahead with labour reforms augured well for the manufacturing sector but cautioned that it would take some time before the reforms kick in.

“It sends a strong signal to global investors to come and invest and set up manufacturing units to create jobs,” said Rituparna Chakraborty, senior vice-president at staffing firm Teamlease.

Trade union representatives said they had not been consulted and would want a dialogue with the government before it finalizes the amendments.

“The final version of the amendments should be discussed with the trade unions. There should be no unilateral move,” said A K Padmanabhan, president of CITU.

Deo told Parliament that the process of amendments to the Factories Act was initiated in 2011 with the government setting up an expert panel headed by Narendra Jadhav, then member of Planning Commission.