International Journal For Multidisciplinary Research

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Ease of Doing Business and Obstacles in Paying Legal Dues of Workers in Stressed Industries

Author(s) Mr. Abhay Satyendra Nevagi, Prof. Dr. Siddharth Jabade
Country India
Abstract This paper examines the difficulties faced by workers in stressed industries when employers are unable to pay statutory dues such as gratuity and other terminal benefits. It focuses on the cotton spinning sector in Maharashtra, which has experienced repeated financial instability due to volatile cotton prices, high input costs, and frequent changes in government policy. The paper uses the experience of an early export-oriented spinning mill in Kolhapur to explain how market pressures, operational vulnerabilities, and policy decisions affect both employers and workers.
The case study shows how price shocks, weak export demand, and rising production costs forced mills to reduce wages, cut shifts, and suspend operations. These actions created serious hardship for workers who depended on long-term industrial employment. When mills approach insolvency, existing legal protections become insufficient, and workers are unable to recover their dues despite statutory entitlements. The insolvency framework prioritises secured creditors, and distressed assets often have limited value. As a result, workers remain unprotected.
The paper argues that stronger legal mechanisms and financial safeguards are needed to protect labour in industries that face cyclical distress. It concludes that effective implementation of the new Labour Codes, combined with insurance-based systems for worker dues and targeted state support, can improve ease of doing business while safeguarding workers’ rights.
Keywords Cotton Spinning Sector, Worker Dues, Insolvency, Ease of Doing Business, Labour Codes, Maharashtra Textile Industry
Field Sociology > Administration / Law / Management
Published In Volume 7, Issue 6, November-December 2025
Published On 2025-11-28
DOI https://doi.org/10.36948/ijfmr.2025.v07i06.61973
Short DOI https://doi.org/hbdspv
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