Wow, that's not bullshit in the slightest. Is it legal to do this there? I mean it's technically illegal here in America but employers can always come up with a bullshit excuse. Worse, if you live in San "at will" state, they can fire you with NO reason.
Whenever I talk to an Indian about politics, the one thing they always mention is how bad corruption is in India. So I doubt that, even if it is illegal, they'll face any repercussions, so long as they've padded the pockets of the right person.
I don't know much about Indian laws and work culture, but many Indians I spoke to mentioned the work culture in their country is highly toxic. They prefer to work in American and Western companies instead of Indian-grown ones.
Watching Mike Okay videos, even things that aren't legal seem to be commonplace. The video where he visited a small jeans factory in a crawlspace above another shop that had ladder access, and where the off-dity employees slept on the floor underneath the workbenches where other workers were working, a small room with ceilings so low he had to stoop, that gave me the heebie jeebies