Labour min may not budge on manufacturing policy

The labour ministry has expressed strong objections to the New Manufacturing Policy (NMP) provisions even as the commerce minister is making reconciliatory noises. But that hasn’t worked well so far.

Commerce minister Anand Sharma has written to his labour counterpart Malikarjun Kharge, assuring him of addressing the latter’s objections to the NMP. Even so, going by official sources, the labour minister is unlikely to give his nod to the policy at the next meeting of the Group of Ministers (GoM).

There would have already been a decision on the NMP had the GoM met on September 16 as originally scheduled. That conclave was deferred as the labour minister was not in the country.

The labour ministry continues to maintain that “under no circumstances” would it “outsource” its labour inspection powers to an agency. “The inspection of labour laws is the sovereign right of the labour inspector. How can we outsource these powers to some other agency?” asks an official.

The NMP proposes to create an authority in the National Manufacturing Zone that would be given the powers of the labour commissioner. The policy says this officer would provide a single-window clearance to anything relating to labour laws.

The officials say the ministry is still uncomfortable with allowing an alternative authority to manage the money of employees. According to the NMP, businesses that come up in the National Manufacturing Zone will be exempted in Acts (such as in the case of employees’ provident fund), if the employees of business units are either members of any other pension scheme or propose to be members of a pension scheme wherein the benefits are at par or more favourable than provided under this scheme.

The NMP, which is being spearheaded by the department of industrial policy and promotion under the ministry of commerce, is being developed to raise the share of manufacturing sector in India’s GDP to 25 per cent by 2025. At present, the percentage share of manufacturing in the GDP is 16.

In June, Prime Minister Manmohan Singh had given his nod to the proposal. However, inter-ministerial differences have acted as roadblocks preventing it from getting the green signal from the GoM.

Two weeks ago, the PM had appointed Agricultural Minister Sharad Pawar to head the GoM to resolve the differences.