Fri Nov 21 18:50:00 UTC 2025: Summary:
Manish Sabharwal argues that the newly notified labor codes in India offer a significant opportunity for backward states like Bihar to create more formal, high-wage jobs. He contrasts the stagnant job market in Bihar, characterized by employed poverty and a lack of high-productivity employers, with the economic transformations in states like Karnataka and Tamil Nadu, driven by policies that encourage private sector growth. The new labor codes simplify regulations, decriminalize offenses, expand social security, and reduce corruption, thereby creating a more attractive environment for businesses. While not perfect, these codes represent a major step toward a trust-based regulatory regime, giving states greater flexibility in rule-making. Sabharwal emphasizes that attracting good jobs is crucial for backward states to catch up with their more developed counterparts, and the labor codes provide a superior solution to simply seeking “special status” from the central government.
News Article:
New Labor Codes Offer Bihar a Path to Economic Growth, Says Expert
[City, State] – In the wake of recent Bihar elections and ongoing discussions about job creation in the state, economist Manish Sabharwal argues that the newly notified labor codes hold the key to unlocking economic growth in backward states like Bihar.
In an article published [Publication Name], Sabharwal contrasts Bihar’s stagnant job market, plagued by “employed poverty” and a scarcity of high-productivity employers, with the booming economies of states like Karnataka and Tamil Nadu. He attributes the success of these states to policies that foster private sector investment and job creation.
“Bihar’s challenge is the shortage of high productivity employers,” Sabharwal writes, pointing out that a significant portion of the workforce remains trapped in agriculture or unviable self-employment.
The new labor codes, which consolidate 29 existing laws into four, aim to address this issue by simplifying regulations, decriminalizing offenses, expanding social security to gig workers, and reducing corruption. This creates a more attractive environment for businesses, particularly those offering high-wage, high-productivity jobs.
Sabharwal acknowledges the imperfections of the codes but hails them as a significant step toward a trust-based regulatory regime, giving states more flexibility in shaping their own labor policies.
He dismisses the notion of seeking “special status” from the central government as a solution for backward states, arguing that attracting good jobs is the real key to catching up with more developed regions.
“A superior response is notifying the labour codes,” Sabharwal concludes, emphasizing that the codes offer a concrete pathway for Bihar to transform its economy and provide better opportunities for its citizens. The ability of states to attract new, good jobs, he suggests, will be determined by their focus on improving the daily experience of employers.
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