There is an enduring view that South Asian economies, in common with many others in the developing world, are characterized by widespread labour market distortions (e.g. Joshi and Little 1994: 25-30 on India and an internal World Bank 1995a report on Sri Lanka). The corollary of this view is that labour market imperfections, such as trade union militancy and job security legislation, impede efficient resource allocation and thus constrain the capacity of the economies of the region to grow faster. The policy prescription that follows from such theorizing is quite unambiguous: alleviation of labour market imperfections, in conjunction with other policies, will enable South Asian economies to grow faster. Rapid growth in turn will lay the foundations for sustained reductions in poverty. The position taken in this chapter is that the policy prescription is not as simple as it seems. The issue of reforming labour market institutions is quite complex and deserves careful reflection. Such institutions as trade unions can be seen as impediments to growth, but they can also be harnessed to play a productive role. This chapter also extends the analysis to offer brief reflections on such sensitive issues as child labour and gender discrimination in the labour market. The discussion suggests that effective methods of dealing with such major social issues lie less in the domain of formal legislation and more in the sphere of general-purpose policies that bear on human development. In propagating such prescriptions, a preamble is needed. The subsequent sections provide such a preamble.