Read the following extract and answer the following questions:

In recent years, the central and state governments in India have been taking special steps to attract foreign companies to invest in India. Industrial zones, called Special Economic Zones (SEZs), are being set up. SEZs are to have world-class facilities: electricity, water, roads, transport, storage, recreational and educational facilities. Companies that set up SEZ production units do not have to pay taxes for five years. The government has also allowed flexibility in the labour laws to attract foreign investment. You have seen in Chapter 2 that the companies in the organised sector have to obey certain rules that aim to protect the workers’ rights. The government has recently allowed companies to ignore many of these. Instead of hiring workers regularly, companies hire workers ‘flexibly’ for short periods when there is intense pressure from work. This is done to reduce the cost of labour for the company. However, foreign companies are still not satisfied and demand more flexibility in labour laws.

The impact of the flexibility of labour laws is