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FDI contributed positively to sales, profit, employment and wages of firms in India from 2004 to 2018. Foreign capital is complementing domestic capital well embodying technology and innovations required for expansion of domestic firms in it. Foreign promoters have played quite significant economic roles among firms across production sectors in manufacturing industry in India. Besides sales, total expenses, managerial remunerations and corporation taxes, involvement of foreign promoters are statistically significant determinants of profits, employment and wages among firms across all seven sectors of the manufacturing industry is clear from analysis of the Prowess database for years 2004, 2008, 2012 and 2014. These effects were even stronger in each of Modi–I years between 2015-2019 that followed the Make in India initiative in 2014. Reforms including the outright 100 per cent ownership provision in the automatic route in most industrial sectors have produced good outcomes that have not only raised the volume of FDI per capita from around 16 dollars in 2000 to 285 dollars in 2018 but also raised the global ranking of India to 63 out of 190 economies in 2019 on the ease of doing business, putting India 79 places above now than in 2014. Based on theoretical and empirical analysis it can be concluded that good sentiments of FDI in India in Modi–II years started in 2019 will prevent diminishing returns on capital and contribute towards sustainable growth in coming years. JEL Codes: F21, F23, F14, J31, O53

Labor laws in India have been a subject of contention since their inception. There are arguments against labor laws that say that an adherence to labor laws push up the wages in the formal sector and reduce employability of the labor. A hike in labor cost makes capital relatively cheaper, causing an increase in capital intensivity of the production. This study is an attempt to show that labor laws are necessary and empirically proves that it is not the labor laws that create the wedges between the formal and informal sector wages. We econometrically test the hypothesis of there being a significant difference between wages in the formal and the informal sector and its correlation with existence of labor laws in the formal sector. The Oaxaca’s decomposition technique is used to find out the difference in formal-informal sector wages that could be attributed to existence of labor laws. The results that we obtain show that 87 percent of the difference in wages between the formal and the informal sector is determined by the differences in income generating characteristics of the worker employed. We conclude that labor laws do not drive up the wages artificially, they just make employment more secure and worthwhile for the worker. We also point out the importance of public investments in human capital creation, underlining the fact that it is these investments that can reduce various inequalities among the wages of workers across employments and sectors.

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This paper examines inequality, informality, marginality and unemployment in Indian labor market during Covid-19 Pandemic. These four concepts are dynamically examined in the context of wage code, 2019 and the recent three labor codes, 2020 passed in parliament by the central government to expand the neo-liberal global capitalism agenda to increase surplus rate via higher exploitation rate of workers. The paper also critically analyses the economic package announced by the  government with insignificant share of fiscal policy measures rather monetary policy measures including loan and credit. Alternatively, this paper advocates a fiscal stimulus package to counter the challenges of lives and livelihood of the workers especially informal workers in the Indian labor market.