Economic Survey | Focus Not On Hours Per Week But Flexibility During Seasonal Demand: CEA — Profit Exclusive

The Economic Survey 2025, released on Friday, advocated for flexibility in working hours in accordance to the seasonal demand rather than focussing on fixed weekly working hours.

Chief Economic Adviser V Anantha Nageswaran, while speaking to NDTV Profit, noted that the subject which the survey touched upon is related to to small entrepreneurs.

"The discussion is not about the hours per week, but about allowing flexibility for small entrepreneurs to adjust working hours based on seasonal demand," the CEA said.

Nageswaran, however, clarified that this discussion around labour hours is separate from the recent debate triggered in the private sector over weekly working hours.

The Economic Survey document, tabled in the Parliament earlier in the day, suggested that small enterprises should be allowed to meet stipulated working hours over a period of three to six months rather than weekly.

"For instance, if there is a surge in orders during specific months in the year, exporting firms should have the flexibility to deploy more labour hours and lower them during lean seasons. This flexibility is needed," it added.

Working hour restrictions are introduced to protect workers' health and prevent overwork, the survey said, but added that various limits on working hours—per day, week, quarter, and year—"often conflict, reducing workers' earning potential".

The Factories Act of 1948 mandates that overtime must be paid at twice the regular wage, making formal overtime expensive for employers. Amid the restrictions, many workers opt for informal employment to bypass the regulations and receive extra pay, the survey pointed out.

"..Section 56 of the Factories Act limits a worker to a maximum of ten-and-a-half hours at a factory daily, equating to around 63 hours in a six-day week. Of these, only 48 hours are considered regular (Section 51), three hours are considered rest intervals, and the remaining 12 hours count as overtime," stated the survey.

"Over a 13-week quarter, this would allow for 156 overtime hours. Yet, another provision (Section 65) caps overtime at only 75 hours per quarter. As a result, these laws inadvertently hinder workers' earning potential, ultimately affecting their financial wellbeing," it added.

However, under the new labour laws, seven states including Maharashtra, Haryana, Himachal Pradesh, Odisha, Punjab, Karnataka and Uttar Pradesh have increased the ceiling of overtime hours from 75 up to 144 hours in any quarter, the survey said.

Separately, a debate has erupted in the private sector over the number of hours that employees need to put up each week. It was triggered after Infosys co-founder Narayana Murthy advocated for a 70-hour work week, and intensified after L&T Chairman SN Subrahmanyan talked about working 90 hours per week.