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PHD Chamber

the new labour codes and their impact, what need to be done to promote industrial activity by Jorawer

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6 views2 pages

PHD Chamber

the new labour codes and their impact, what need to be done to promote industrial activity by Jorawer

Uploaded by

storageteams
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Mr.

Jorawer Singh

Strategic Consultant - Certified in “Future of Work- Preparing for Disruptions”.


Apt in “social side of strategy” arising from Corporate Politics, Individual
Incentives, and Human Biases. Helps in way forward - by budgeting for
uncertainty, -helping “exploration of the world” beyond available in-house
experience, -proposing bold strategies embracing big moves that are high likely
to deliver a strong performance jolt. Highly effective in Proactively handling HR
Work Air & IR situations, & minimising compliance liabilities, through design of
manpower deployment mix of “on-roll”, apprentice, fixed term, assignment
based, service level, third party Payrolling. A practical compass for organizations
in India to enable them to proactively chart the changes happening through new
Labour Law Codes, & to be ahead of the game. Work for corporate more like an
outsourced #CHRO /part time #DirectorHR for manufacturing/service sector, at
cost effective Pay-for-Use basis.

Contact Details: http://linkedin.com/in/jorawer-singh-85b9a58

26. Formal sector employment: a need to expand it.

The table below gives us the insights into importance & the role being played by the formal sector
undertakings offering stable jobs.

Year 2005 – 2006 Formal Undertakings Informal Undertakings


Share of Firms 0.7% 99.3%
Share of employment 19.5% 80.5%
Median employment 20 9
Median gross value 82,000 12500
added per worker. INR

The situations continues to be same as it was in 2005 with minor changes. The bigger question is
what is preventing the creation of formal stable jobs and also what is leading to creation of large
informal employment.

India has set itself a target of 5 trillion economy by 2022, however, the turn of events upon arrival of
COVID19 virus, has given the Governments a much needed pause to revisit its labour laws, so as not
only to give a boost to economy, once the lockdown starts melting, but also to provide a favourable
environment to some large organisations, who are willing to shift base to India, but are wary of
archaic legal framework.

The formal sector jobs not only helps workers add 7 times more gross value than their informal
sector counterparts, but also helps generate larger and stable employment.

Four Indian states have taken the lead, and have tweaked certain labour enactments, in the month
of May 2020. The results will start showing up by the end of this Financial Year.

Labour Laws: What all needs to be tweaked.

73 | PHD CHAMBER OF COMMERCE AND INDUSTRY


Politicians are trying to create jobs by financing programs for the development of small and medium
enterprises. However, these programs are rarely cost-effective. They are based on the belief that
small and medium enterprises create stable jobs, and yet the evidence shows that large firms
account for the largest proportion of stable jobs in many economies.

A better solution is to ease the barriers for start-ups to encourage competitive markets. Start-ups
require a business-friendly environment that does not favour large private firms already in a market
for some time (incumbents) and state-owned enterprises or firms run by government officials, their
associates, relatives or with blessings. A small number of start-ups will become the next superstar
firms.
As per this report the participating labour in India is about 660 million, and as per the EPFO website,
there are only 60 million gross subscribers, who have at least contributed once in the year, and
therefore form part of formal employment. This is meagre 9%.

In addition to creating new jobs, Post Covid19 lockdown, the uneven migration of labour from one
state to another, has made some states labour surplus and some labour deficient, the immediate
challenges appear to be to adjust the available workers in existing setups, and also to create a
balancing act for labour surplus and labour deficient states.

In brief the objectives before us is to tweak labour laws in a manner so as to:

1. create more jobs where in workers from Non Standard Employment (NSE) can move into
formal stable jobs.
2. reduce social protection load on entry of fresh talent and creating a talent pool to be ready
for expected industries coming our way.
3. cover up the time lost by working extra in coming times, without unnecessary restrictions.
4. minimising work disruptions of any by unions.
5. cut away bureaucratic red tape, where industry wish to change plant layouts, modify
products or processes, wish to use extra available room or building, for additional
production processes.
6. to reduce the paper work, returns, compliance which take away precious time till a more
efficient online, digital data capturing method is introduced.
7. increase social protection for workers in non-standard employments.
8. activate of employment exchanges and Central Board of Worker Education.
9. create equal opportunity for all segments of society.

74 | PHD CHAMBER OF COMMERCE AND INDUSTRY

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