For the past several years, both the central and state governments have been pushing hard to accelerate industrial growth. The logic is straightforward: more business, more jobs, stronger economy.
To support this, procedures have been simplified, approvals streamlined, and regulations eased. One of the most visible shifts has been the gradual dismantling of what used to be called “Inspector Raj.”
In its place, we now have a system built on trust—self-certification, minimal inspections, and the assumption that employers will follow the law voluntarily.
It sounds modern. It sounds efficient. It even sounds fair. But there’s a problem: it assumes a culture of compliance that, in my experience, does not yet exist.
I spent nearly two decades—from 1987 to 2006—in the Employees’ State Insurance Corporation, first as Deputy Director, later as Joint Director and eventually overseeing inspection work as Director.
In the first two positions, my job included conducting special inspections to check whether routine inspections had been done properly.
What I saw, again and again, was not accidental non-compliance. It was design.
Employers were often one step ahead—underreporting workers, splitting establishments on paper, maintaining parallel records, and structuring operations in ways that neatly sidestepped labour laws.
When it came to major employers, this wasn’t clumsy evasion. It was precise, thought-through, and, at times, impressively inventive.
The beginning itself was instructive.
In 1987, I was assigned my first test inspection of a well-known English daily newspaper establishment owned by a limited company—Company A.
Until November 1985, its printing operations had been outsourced to another limited company—Company B—which also published a vernacular daily.
Both companies operated from the same building separated only by a narrow corridor.
The building itself belonged to a third entity—Company C—an associate of Company B.
Both Company A and Company B paid rent to Company C.
The printing presses of both newspapers functioned from a common shed within the same premises. There was not even a wooden partition separating the machinery. The photo-typesetting system used for both publications was shared.
While Company A had been paying Company B monthly charges for printing services until November 1985, Company A’s 1982–83 balance sheet told a revealing story: the cost of the printing machinery had been borne by Company A itself.
The attendance registers deepened the puzzle. Company B showed no independent technical staff. The skilled workers operating the machinery were on the rolls of Company A.
The same accountant maintained the books of both companies. During inspections—both earlier routine inspections and the special inspection—it was this gentleman who produced records for both entities and answered queries.
Even more striking, the General Manager of Company A was also functioning as Secretary of Company B.
Legally, they were separate companies. Operationally, they were deeply intertwined.
Hence, I recommended that in addition to the workers of Company B, who were covered under the Act with effect from 1-12-1982, the workers of Company A shall also be covered by clubbing both the Companies, with retrospective effect from the same date.
Even otherwise, Company A independently met the statutory criteria from December 1, 1982 as it had purchased photo-typesetting machines in December 1982, commenced operations from December 7, employed more than ten workers, and used electrical power in film and paper processing—clear thresholds under the law.
It is not difficult to imagine why the inspectors, who conducted inspections in October 1985, December 1985 and March 1987, had not reported these facts. But that assignment revealed how corporate structuring can blur accountability.
Although it has been nearly 20 years since my retirement, even now, whenever I have occasion to visit malls, star hotels, theatres, or corporate offices to meet friends, I enquire about compliance under the Employees’ State Insurance and the Employees’ Provident Fund Act.
In case of smaller entities these social security benefits are absent. Sometimes even minimum wages are not paid and long working hours are the norm.
The same applies to contractual and outsourced employees of big companies.
Even in the case of regular workers, partial compliance stares you in your face. And that is why the current enthusiasm for doing away with inspections altogether, needs a reality check.
The idea that inspections can be reduced to a rare exception sounds attractive, almost idealistic. But it works only in systems where following the law is the default behaviour, not something to be negotiated around.
We are not there yet.
Here, too often, the instinct is to find the gap, and then widen it.
In such a setting, a system built largely on trust risks doing the opposite of what it intends. Instead of improving compliance, it may quietly reward those who are best at avoiding it.
This is not a call to bring back the old system in its worst form. It is a call for balance.
We need inspections that are smarter, not more oppressive. Fewer in number, perhaps, but sharper, data-driven, and harder to game. Less discretion, more transparency. Less harassment, but also less illusion.
Because labour laws are not abstract rules. They are meant to ensure that workers get basic protections—health cover, fair wages, reasonable working hours.
If enforcement weakens, these protections don’t just fade. They disappear.
Right now, we seem to be betting heavily on trust. Experience suggests we should be a little more cautious.
(Views expressed in this opinion piece are those of the author)