India Inc should offer ideas to create jobs: Panagariya

Endorsing the government's labour law reforms, NITI Aayog Vice-Chairman Arvind Panagariya on Friday said India Inc needs to step up to create jobs and offer inputs to the government on boosting employment at good wages.

“They should say what the government should do in order to increase employment at good wages,” Panagariya said at the 18th JRD Tata Memorial Lecture here. “Where is the passion for hiring workers in the industry here?.. you need to lobby to the government to bring more employment.”

He admitted the industry has talked a lot about the rigidities in labour laws. The industry has been pushing for relaxing the labour law framework to boost ease of doing business in the country. The government, in turn, has taken a host of initiatives to amend labour laws, but all have run into stiff opposition from trade unions (TUs).

TUs have called for a nation-wide strike on September 2 and are expecting 40 crore workers from organised and unorganised sectors to join the call.

“What are those conditions (for creating more jobs) that only entrepreneurs can tell. What is keeping them from employing more workers?” Panagariya said.

Expressing concern over the industry promoting more capital-intensive businesses, he said, “I fear entrepreneurs will simply look the other way, hire more and more machinery and go into capital-intensive industry. Even within their industry, they choose most capital intensive one. That is ultimately not good from the employment perspective.”

He cited an example of labour-intensive industry like ready-made garments where India has been left behind by smaller countries. “If you look only at India's clothing exports, we are about 1/10th of China today... in absolute terms, we are less than Bangladesh and even a bit behind Vietnam.”

He also stressed on the need for phasing out trade barriers to boost growth. India has a labour force of around 500 million, with 12 million joining the workforce every year.