NITI Aayog pitches for labour reforms in its 'Strategy for New India @75' document.
What does it recommend?
Codifying labour laws - In 2016, there were 44 labour laws under the statute of the Central government.
More than 100 laws fall under the jurisdiction of state governments.
Thus, the government should quickly finish codifying India’s labour laws, while simplifying or modifying those that apply to the formal sector.
The National Policy for Domestic Workers should also be brought in at the earliest.
Keeping women in the workforce - The government should ensure that employers adhere to the Maternity Benefit (Amendment) Act, 2017, and the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act.
It is also important to implement these legislations in the informal sector, and make sure that skills training programmes and apprenticeships include women.
Employment data - Data collection for the Periodic Labour Force Survey (PFLS) of households must be completed on schedule and data is disseminated by 2019.
The government should conduct an annual enterprise survey using the GST Network (GSTN) as the sample frame for this.
Along with it, administrative data from EPFO, ESIC and the NPS could be used, to track regularly the state of employment while adjusting for the formalisation of the workforce.
Workers’ welfare - The government must mandatorily comply with the national floor-level minimum wage.
Also, the Minimum Wages Act, 1948 should be expanded to cover all jobs, besides enforcing the payment of wages through cheque or Aadhaar-enabled payments for all.
Social security and working conditions – There must be a compulsory registration of all establishments to ensure better monitoring of occupational safety.
A comprehensive occupational health and safety legislation based on risk assessment and employer-worker cooperation should be enacted.
Labour inspection system should be made transparent by allowing online complaints and putting in place a standardised mechanism.
Also, labour dispute resolution system should be overhauled, by strengthening labour courts or tribunals to help resolve disputes quickly and fairly.
Skills and apprenticeships - According to the India Skill Report 2018, only 47% of those coming out of higher educational institutions are employable.
Thus, forming the Labour Market Information System (LMIS) is important for identifying skill shortages, training needs and new employment opportunities.
Through LMIS, the government should ensure the wider use of apprenticeship programmes by all enterprises, which may require enhancing the government stipend.
What are the concerns?
NITI Aayog is stuck on a misguided notion that labour flexibility will boost investment, thereby ignoring skilling and other factors.
The mere amendments in labour laws have neither succeeded in attracting big investments, boost to industrialisation or to job creation.
According to the Ease of Doing Business Index (2014), only a little over one-tenth of the respondent firms in India perceived labour regulations as a major constraint.
Hence, rapid industrialisation, growth in investments and job creation would ultimately depend on –
Development of infrastructure
Stable law and order
Availability of skilled manpower
Boost in skill upgradation
Also, extension of maternity benefit to 26 weeks under the amended Maternity Benefit Act has adversely affected employment prospects.
This is because the employers hesitate to hire female workforce, especially in the case of start-ups.
To overcome this, the government has recently proposed to subsidise wages of female workers earning less than Rs. 15,000.
However, it has little to say on the gender composition of committees and institutions created under the labour laws to enforce the measure.
Also, trade union recognition law is still absent in most States and at the national level.
Thus, the NITI Aayog needs to really retool itself to be able to come up with a balanced and conceptually consistent labour market and industrial relations strategy, to deliver quality jobs and inclusive growth.
