Amid reports of retrenchment and job losses, the Union labour ministry is considering reviving a Cabinet proposal it had made two weeks ago to provide social security cover to small units.

The proposal was returned by the Cabinet following representations from pressure groups and intervention by the ministries of information technology, finance and small and medium industries.

Industry body Laghu Udyog Bharti (LUB), which represents around 1,700 small-scale units, has made a strong case to the IT and small and medium industries ministry against lowering the threshold.

According to LUB, the small-scale sector contributes 40 per cent of the industrial production, 35 per cent of the total exports and employs about 16.7 million people in about 3 million units. The added burden of EPF payments would put pressure on the bottomlines of these units, says LUB.

Though other ministries have endorse LUB’s position, the labour ministry feels a social security cover should be created for the workers given the present environment of employment insecurity.

Workers have the protection of the Industrial Disputes Act under which they have to be given a month’s notice and 15-day salary for every year served. But this is inadequate, the labour ministry feels.

A labour ministry official conceded that the government had no idea how many jobs had already been lost in the SME sector because of earlier pressures of a depreciating rupee, and now due to dwindling demand for exports.

CITU national secretary W R Varadarajan said the loss of jobs was alarming and the government should provide relief. If it could spare Rs 2,60,000 crore to bring liquidity in the economy, it should spare some to protect workers who were being dismissed, he said.

Labour Minister Oscar Fernandes had mooted a fund, partly financed by industry, to provide social security to workers rendered jobless by the economic meltdown.

New Ipad Application :Business Standard's all new IPad App Click here to download for free Other Stories      - Nifty ends above 5,500 - GoAir gives aircraft engine order to P&W - Doing business in emerging economies: panel discussion at NILF - Stir up passion for financial inclusion: RBI to bankers - P&G files complaint against HUL's latest Rin ad

Read Business news in  Advertisements -  Now property search gets more exciting than ever before! -  High Growth Business Opportunities in Africa - Register to explore -  We live for our family. have you secured them? -  Office 365 for professionals and small businesses. -  Earn fuel worth Rs.2400 with Citi -  India's No. 1 Property Site. Click here to know more.. -  Diseases earlier, Saving Costs, Extending Lives. Know More.. -  Get 5% cashback on telephone bills with Citi -  Enjoy the journey as much as the destination. click to know more.. -  Exim Bank Conclave on India - Africa Project Partnership. Know more.. -  Medium-sized businesses are the engines of a smarter planet. -  Be part of it The World's Largest Aircraft. -  Creating Wealth made simple the SIP way. Know more.. -  Only Developer to give a guarantee on time space & rate. -  Buy Your Property with Our Triple Guarantee in India. -  Improve Patient Care & Experience. Click here to know more -  Win a Business Class Ticket to Europe..Know more.. -   Introduce a New Automotive Luxury Car.. know more -  Health is Wealth..... Insurance + Savings... Know More...