Lack of labour reforms has generally meant multiple labour legislation that deter hiring of labour. Over the last several years, some states have been proactive and have lowered the stringency of labour regulations and simplified compliance and procedural requirements. But the empirical evidence on this leads us to a fundamental puzzle: Even in those states of India that achieved a high labour reform index, like Gujarat and Andhra Pradesh, the jobs that were created were overwhelmingly informal in nature.
If other constraints like EPFO are the true bottle necks, easing such constraints is a much more clean way of doing reform. One doesn't need demonetisation, which results in collateral damage to innocents, to achieve this. As Kaushik Basu says, a cancer treating drug might increase hair on your bald head. But, that won't be the reason for you to wish for cancer. There are other ways to do it.