Govt framing new policy to boost jobs

Dec 29 2012, 22:15 IST
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SummaryWith the job scenario looking grim, the labour ministry has prepared a National Employment Policy that may outline a raft of changes in labour laws and industrial policies to boost employment and ensure good working conditions for workers.

With the job scenario looking grim, the labour ministry has prepared a National Employment Policy (NEP) that may outline a raft of changes in labour laws and industrial policies to boost employment and ensure good working conditions for workers.

The new job policy will be in conformity with the 12th Plan growth target, and might propose changes in various laws like the Minimum Wages Act, Contract Labour Act and EPF Act to bring a major chunk of workers in unorganised sectors under the ambit of the formal sector.

In recent years, the growth in direct employment in the organised sector has been almost flat as companies have relied heavily on contract workers. Rigid labour laws have kept 93% of the workforce in the informal sector — bulk of them in agriculture and the rest in small manufacturing units, construction and trade.

One of the major proposals for formalising the informal sector is to amend the Minimum Wages Act to make it mandatory for all workers across the country. “As it was difficult to maintain nationwide uniformity in wages under the present law that was not mandatory for states, sources said the government is considering a mandatory national floor level minimum wage,” a labour ministry official told FE.

Similarly, the government is planning to link the variable dearness allowance (VDA) to consumer price inflation to neutralise the effects of price rise on workers.

There is also a broad-based consensus on amending the EPF Act to raise the wage ceiling of R6,500 per month to R10,000 or R15,000 for an employee to be compulsorily covered under the EPF scheme. Also, there is a proposal to raise the minimum pension under the employees pension scheme to be not less than R1,000 per month, from the present Rs.541.

The policy might also propose steps to attract higher investment in labour-intensive industries. Already, the commerce and industry ministry has proposed in the national manufacturing policy that “adequate support” will be given to promote and strengthen employment-intensive industries. The policy will also outline steps to simplify labour regulations to arrest the increase in capital intensity of manufacturing.

“The ministry has sought feedback from other departments and ministries. The controversial issues will be further debated with various stakeholders — states, labour unions and industry bodies — at the Indian labour conference scheduled for January 4,” the official said.

The Planning Commission’s 12th Plan has laid special emphasis on employment,

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