Govt to focus on sectors creating jobs

With more and more companies announcing job cuts, the government is on the verge of finanlising a policy that calls for an employment intensive economic growth, with focus on those sectors which generate most jobs.

The draft policy, prepared for the first time since independence, proposes making agriculture the largest employment provider by making it more remunerative. It also calls for government investment in social sector to make it a great enabler for employability by building human capabilities and skills. The state has a major role in the development of these sectors and public investments in these should be stepped up, it adds.

The draft policy also seeks a revision of some existing policies. “Policies that are likely to hinder expansion of employment and encourage insecure and exploitative conditions of work need to be reviewed and changed,” it says.

The draft policy, which is likely to go to the Cabinet in a month after receiving comments from various ministries, calls for an employment impact assessment for every policy decision.

The proposed policy is spelt out in seven segments —macroeconomic policy, sectoral policy, labour market policies, SME development policies, skill development policies, women workers and vulnerable workers.

It also calls for linking tax incentives to job creation. In the section on fiscal policy, it says: “Fiscal, monetary and credit policies have their own primary objectives. But directed efforts should be made to see that they are also related to the employment objective.”

It further says: “Several types of tax holidays, tax exemptions and differential duty rates are in operation primarily with the objective of encouraging investment. Such incentives should be calibrated to the employment outcome. Employment may be made one of the criteria or additional incentives may be devised for employment outcome.”

It calls for special policy interventions in labour intensive industries like leather goods, textile products, beverages, food products and wood products.

The draft policy calls for investments in irrigation and infrastructure, but fights shy of touching on specific solutions. Sources said the draft would include a suggested plan of action when it is sent to the ministries.

A separate development finance facility catering to the needs of small and micro enterprises has also been proposed.