Impact of Neo-liberal economic policy on the legal framework and state policy on labour: A case of Sri Lanka and India

Abstract

South Asian nations in the past three decades have entered into a process of liberalisation and deregulation of the economy. This shift in the economy from a social democratic welfare state model, to a market oriented neo-liberal model has also had an impact on the legal framework and state policy governing the social relations within the economy, between labour and capital. This paperexamines the changes in the legal framework and state policies in India and Sri Lanka on labour, to demonstrate that the pro-labour legal framework that was in place during the pre-liberalisation period is now rapidly and aggressive being replaced by an anti- labour, pro-capital legal regime. Reforms to legal regime, proposed and successfully enacted, in both countries during the post liberalisation period are extensively detailed. The interventionist state's role in the previous welfare state era, as the protector of the interests of labour within an import substitution economy, has been replaced by a minimal state that is aggressively siding with the interests of the capitalists within an export oriented globalized economy.