Five Year Plans & Industrial Relations

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After India became a Sovereign Democratic Republic, the concept of planned economic development through planning was accepted and the planning Commission was set up in March 1950. The advent of the era of planning brought in its wake a set of new problems as well as popular expectation. Eleven plans have been completed and the eleventh is continuing. 

First Five Year Plan 

The First Five-Year Plan (1951– 56) paid considerable attention to labor problems including strikes and lockouts, as well as popular expectations of the working class. The Plan recognized workers’ right to strike and observed:

In an economy organized on the basis of competition, private monopoly or private profits, the workers’ right to have recourse to peaceful direct action for the defense of their rights and the improvement of their conditions cannot be denied and should not be curtailed unduly. 


The 11 successive plans laid down certain basic concepts and principles regarding: 

  • Workers’ right of association and organization.
  • The machinery and procedure for settlement of disputes.
  • The implementation of awards and agreements

The plans have had two distinctive objectives in regard to industrial relations: 

  1. The avoidance of industrial disputes and creation of machinery for settlement of industrial disputes.
  2. The creation of a necessary atmosphere for the development of labor management cooperation and harmonious relations through the adoption of a suitable institutional framework.

Second Five Year Plan 

The Second Five-Year Plan envisaged a marked shift in industrial relations policy consequent on the acceptance of the socialistic pattern of society and the goal of planning. The plan stated that greater stress should be laid on the creation of industrial democracy in which a worker should realize that he is a part and parcel of the industrial apparatus that is to usher in socialistic pattern of society.

The planners emphasized mutual negotiations as an effective mode of settling industrial disputes. Among the other recommendations in the plan were demarcation of functions between the works committee and increased association of labor unions with management and provision for recognition of trade unions.

Keeping in mind the desirability of having one union to one industry, the plan also suggested that the number of outsiders who could serve as union office bearers be further restricted. Thus, the plan pleaded for maintenance of industrial peace by preventing strikes and lockouts.

Third Five Year Plan 

The Third Five-Year Plan did not suggest any major change in policy. It placed emphasis on collective bargaining and on mutual agreements for industrial relations as well as workers’ well-being. It also emphasized the economic and social aspects of industrial peace and elaborated the concept that

workers and management were partners in a joint endeavor to achieve common ends. The voluntary arrangement agreed to in the Second Plan was strengthened by the Industrial Truce Resolution, 1962.

Fourth Five Year Plan 

The Fourth Five-Year Plan also stressed on the need for more effective implementation of labor administration for better enforcement of labor laws.

Fifth Five Year Plan

The Fifth Five-Year Plan highlighted that inadequacies of management and bad industrial relations are among the most important factors for delay and inefficiency in implementation of projects and for under-utilization of capacity. It accordingly pleaded: “It is imperative to bring about a marked improvement in the operational efficiency of the public sector as also of the private sector.”

Important suggestions given in the Fifth Plan are as follows:

Some unification of the trade union movement is necessary even for smooth functioning of modern capitalist society, let alone for building a socialist society. Only through this way can industrial

relations be put on an orderly basis, through collective bargaining and other devices. 

Sixth Five Year Plans

The Sixth Five-Year Plan did not introduce any major change in the industrial relations policy. However, there are two aspects which received the planners’ attention. 

First, it stressed the need for simplification of procedure for settlement of industrial disputes in order to ensure ‘quick justice’ to workers and a feeling of certainty among employers. 

Second, it emphasized the need for increasing the number of existing labor courts and tribunals for speedy settlement of industrial disputes. However, the nature and design of the new machinery has not been spelt out. 

Realizing the importance of the system of industrial relations machinery, the Sixth Plan pleaded that the industrial relations machinery should be strengthened both in Centre and states for anticipating labor problems and taking preventive measure to avert work-stoppages

Seventh Five Year Plan

The Seventh Five-Year Plan laid considerable emphasis on measures designed to improve labor management relations without which the realization of developmental objectives of the plan would be difficult. Viewed from this perspective, increases in industrial production and productivity are attainable only in an atmosphere free from industrial conflicts of any kind.

For this discipline and motivation for work, harmonious industrial relations, participation of workers and a healthy working climate are sine qua non. The plan highlighted the need for creating harmonious industrial relations by adopting several measures such as: 

  • There should be proper management of industrial relations;
  • There should be identification of responsibilities of the unions and the employers;
  • Inter-union and intra-union rivalries should be avoided.

Further, the plan suggested that some policy for tackling industrial sickness in future has to be evolved while protecting the interest of labor. Moreover, the plan laid emphasis on upgradation of technology, modernization of equipment, better utilization of assets and promotion of efficiency.

Eight Five Year Plan 

The Eighth Five-Year Plan paid considerable attention to the working conditions, welfare and social security measures and enforcement of labor laws for unorganized labour, women and child labour. 

The plan stated that emphasis should be laid on skill formation and development, strengthening and modernization of employment, service, promotion of industrial and mines safety, workers’ education, promotion of self-employment, enforcement of labor laws, promotion of a healthy industrial relations situation and encouragement of workers’ participation in management.

Ninth Five Year Plan

The Ninth Five-Year Plan stressed on the need to create conditions for improvement of labor productivity and provisions for social security to

supplement the operation of the labor market. The resources would be directed through plan  programmes towards skill formation and development, exchange of information on job opportunities, monitoring of working conditions, creation of industrial harmony through an infrastructure for healthy industrial relations and insurance against disease and unemployment for the workers and their families.

The plan envisages that the trade unions will contribute to promoting changes in the work culture. The plan also stated that action will be taken to: 

  • Identify the laws which are no longer needed and repeal them.
  • Identify the laws which are in harmony with the concept of economic liberalization and need no change.
  • Amend the laws which require change.
  • Revise the rules, regulations, orders and notifications.

Tenth Five Year Plans

In the Tenth Five Year plan (2002–2007), the salient feature of the labor department was to ensure payment of minimum wages to the workers engaged in agricultural and unorganized sectors. The labor department also proposed to play a major role in improving industrial peace and harmony among the working class and to maintain harmonious relation between the employer and the employee. The working condition and safety of the workers engaged in the organized sector of the economy is looked after by the Directorate of Factories.

The changing scenario of globalization involves greater emphasis on strengthening of conciliation and adjudication machinery to cope with the increasing numbers of industrial disputes. The conciliation machinery of the department is conscious of its challenging role in resolving labor disputes. Some of the measures taken by the department are as under:

  1. Effective enforcement of the Minimum Wages Act, Contract Labour (Regulation and Abolition) Act, Child Labour (Regulation and Prohibition) Act and Equal Remuneration Act which were specially designed to protect unorganized workers and women.
  2. Rehabilitation of migrant, orphan and homeless labour and child labour in core carpet zones.
  3. Identification and rehabilitation of bonded labor.
  4. Setting up of a Centre for Productivity and Industrial Management in UP.
  5. Setting up of legal cells at regional offices at Allahabad, Lucknow and Ghaziabad. 
  6. Creating awareness amongst the workers and involving them in fruitful occupation.
  7. Greater emphasis on safer working conditions of industrial workers and strengthening of the Boiler Directorate.
  8. Creation of labor court and industrial tribunal.
  9. Establishment of Fast Track Court.
  10. Labour statistics, training and establishment of a data bank.

Eleventh Five Year Plan 

The Eleventh Five Year Plan (2007–2012), emphasized the need to supplement employment generating sectors such as medium and small industries and services by targeted livelihood support programmes aimed at increasing production and income of the poor in several low-income occupations. 

The plan laid emphasis on generating an adequate number of productive employment opportunities. The planners asserted that rapid growth focussed on labor-intensive industries and small and medium enterprises will create employment opportunities in manufacturing and service sectors. The ability to create jobs will be enhanced by greater labor flexibility which may require some change in labor. While they conceded that ‘hire and fire approach’ may not be desirable but felt that there is a need to create greater flexibility. 

While dealing with skill development, the Eleventh Plan reiterated that specific programmes for development of skills at all levels will form part of the plan. The planners emphasized that the broad vision of the Eleventh Plan would be rapid growth that reduces poverty and creates employment opportunities, recognition of women’s agency, good governance, access to essential services in health and education specially for the poor.


As the country moves to adopt the 12th Five-Year Plan, macroeconomic balance, environmental sustainability, water and energy management along with urbanization among others, are the key challenges before the government. The approach paper suggests that the main focus will be on inclusive growth. The Plan is expected to encourage agriculture, education, health and social welfare. It is also expected to create employment through developing India’s manufacturing sector.

Reference Links 

  1. See Govt. of India, Report of the First National Commission on Labour (1968), 473.
  2. Govt. of India, Report of the Second National Commission on Labour (2002), 35.
  3. Ibid.
  4. Govt. of India, Report of the Second National Commission on Labour (2002), 35.
  5. Ibid.
  6. Govt. of India, Report of the Second National Commission on Labour (2002), 35.
  7. Hindustan Times, January 12, 1999, New Delhi.
  8. Harjinder Singh v. Punjab State Warehousing Corporation, (2010) 3 SCC 192.
  9. Ibid.
  10. Bhilwara Dugdh Utpadak Sahkari S Ltd v. Vinod Kumar Sharma, 2011 LLR 1079 (SC).