|Prime Minister Narendra Modi at the launch of Pandit Deen Dayal Upadhyay Shramev Jayate scheme in New Delhi|
Inheriting a legacy of jobless growth is not a very happy situation for any new government. But Narendra Modi took up this daunting challenge as an opportunity to unleash some of the radical labour reforms – one that not only would please labourers but also meet the needs of India Inc, steps that remove irritants in doing business and help in reducing compliance time and cost. It was a difficult task considering that industrialists were demanding “hard” labour reforms in the form of amendments in the Industrial Disputes Act to make hire-and-fire easier while trade unions were urging for better working conditions and social security for workers. Modi did a balancing act with his new mantra – Shramev Jayate.
Union Labour Minister Narendra Singh Tomar, while speaking at Skoch Summit a month ago had already indicated for these reforms to come and said, the government will introduce a Bill to enact Small Factories Act, a comprehensive act that combines 14 labour laws that SMEs have to comply now, in the forthcoming winter session of Parliament.
While critics will still raise their eyebrows over the new initiatives, it must be borne in mind that Shramev Jayate is just a prelude to the bigger reforms that will come in the form of amendments in the Factories Act, Apprentices Act and Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act, all of which are pending in Parliament for approval. These bills are the legislative reforms that will boost jobs in factories, help SMEs to grow their business and improve the ease of doing business further.
The big picture is Modi government has broken the impasse over labour laws and redefined the role of workers in India's growth story. A labourer (Shram Yogi) can become a nationalist (Rashtra Yogi) and a nation builder (Rashtra Nirmata) with adequate skills and better working conditions, Modi said, inspiring half a billion workers who have sweating it out to pull the economy out of decade's worst economic slowdown.
What's important, Modi said the Shramev Jayate initiatives were an essential element of the 'Make in India' vision, as they would pave the way for skill development of youth in a big way, and even create an opportunity for India to meet the global requirement of skilled labour workforce in the years ahead.
The flagship labour scheme Pandit Deendayal Upadhyay Shramev Jayate Karyakram includes Shram Suvidha Portal, Labour Inspection Scheme, Apprentices Protsahan Yojana, Universal Account Number (UAN) for EPFO and a revamped Rashtriya Swasthya Bima Yojana (RSBY). The newly launched Shram Suvidha portal that simplifies compliance of 16 labour laws through a single online form was a long-pending demand of industry especially the SMEs. Same for the transparent Labour Inspection Scheme that will do a random selection of units for inspection and end undue harassment of the inspector raj while ensuring better compliance. Make no mistake, these are more important than the amendment in the ID Act that would have gone against the interest of workers especially when the job growth is waning.
Perhaps the most important initiative is the Apprentice Protsahan Yojana that would help in boosting skill development and jobs for freshers. This was one of the answers to resolve the jobless growth riddle. Soon after Modi took charge in Delhi, the government unveiled a New Employment Policy to reverse the jobless growth era of last decade when GDP grew at an average annual rate of 8 per cent while growth in jobs were below 1 per cent. What's alarming, only 10 per cent of the labour force has acquired some technical skills, out of which just one-fourth has received formal technical education. This has kept the country's labour productivity low as compared to other emerging economies like China and Brazil. The labour productivity as measured in terms of GDP per person employed in India was $10,651 in 2013, much lower than China ($19,666), Brazil ($19,833) and a small fraction of those in developed nations like Germany ($79,896) and United States ($114,914) in 2013, according to data collated by global think-tank The Conference Board. Unless skill development is stepped up, the manufacturing sector cannot scale up output beyond a point and become globally competitive.
In yet another landmark, the prime minister flagged off the portability of EPFO subscriber account through a Universal Account Number (UAN) that will facilitate transfer of PF every time a person switch job. The UAN will help address the delays in transferring and withdrawing PF and clear the Rs 27,000 crore unclaimed balance with the EPFO. Modi also called for effective implementation of revamped Rashtriya Swasthya Bima Yojana (RSBY) to bring more workers in the unorganised sector under the health insurance cover.
(R K Ray can be reached at firstname.lastname@example.org)
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