NITI's strategy for New India: Bring labour reforms, expand social security

On social security, the Niti Aayog report asked the government to enact a comprehensive occupational health and safety legislation based on risk assessment and employer-worker cooperation

Government think-tank NITI Aayog has pitched for completing labour reforms, increasing participation of women workers, implementing minimum wage, improving employment data collection and broadening social security in its 'Strategy for New India @75' document released on Wednesday.

The Aayog also made a case for easing industrial relations to encourage formalisation, saying there should be increase in severance pay, in line with global best practices.

It also asked for overhauling the labour dispute resolution system to resolve disputes quickly, fairly and at low cost and strengthening labour courts/tribunals for timely dispute resolution.

Calling for enhancing skills and apprenticeships, the Aayog said the Labour Market Information System (LMIS) is important for identifying skill shortages, training needs and employment created.

It said LMIS should be made functional urgently and government should ensure the wider use of apprenticeship programmes by all enterprises which may require an enhancement of the stipend amount paid by the government.

On labour law reforms, it has suggested completing the codification of labour laws at the earliest and pitched for simplification and modification of labour laws applicable to the formal sector to introduce an optimum combination of flexibility and security.

It said the government should make the compliance of working conditions regulations more effective and transparent and the National Policy for Domestic Workers needs to be brought in at the earliest to recognise their rights and promote better working conditions.

About enhancing female labour force participation, it said the government should ensure employers' adherence to the recently passed Maternity Benefit (Amendment) Act, 2017, and the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act.

It is also important to ensure implementation of these legislations in the informal sector and make sure that skills training programmes and apprenticeships include women, the document said.

On employment data, it said that government should ensure that data collection for the Periodic Labour Force Survey (PFLS) of households initiated in April 2017 is completed as per schedule and data disseminated by 2019.

It also asked the government to conduct an annual enterprise survey using the Goods and Service Tax Network (GSTN) as the sample frame and increase the use of administrative data, namely EPFO, ESIC and the NPS, to track regularly the state of employment while adjusting for the formalisation of the workforce.

About wages, it said the government should make compliance with the national floor level minimum wage mandatory and expand the Minimum Wages Act, 1948, to cover all jobs, besides enforcing the payment of wages through cheque or Aadhaar-enabled payments for all.

On social security and working conditions, it asked the government to enact a comprehensive occupational health and safety legislation based on risk assessment and employer-worker cooperation.

It said workers' housing on site will help to improve global competitiveness of the Indian industry, along with enhancing workers' welfare.

It also recommended enhancing occupational safety and health (OSH) in the informal sector through capacity building and targeted programmes and ensuring compulsory registration of all establishments to ensure better monitoring of occupational safety as well as recreation and sanitation facilities.

It also made a case for enhancing transparency in the labour inspection system by allowing online complaints and putting in place a standardised and clear mechanism.

About the constraints, it said a large share of India's workforce is employed in low productivity activities with low levels of remuneration across industry sectors, which is especially true of the informal sector where wages can be one-twentieth of those in firms producing the same goods or services but in the formal sector.

It pointed out that a large number of workers that are engaged in the unorganised sector are not covered by labour regulations and social security. This dualistic nature of the labour market in India may be a result of the complex and large number of labour laws that make compliance very costly.

In 2016, there were 44 labour laws under the statute of the Central government. More than 100 laws fall under the jurisdiction of state governments. The multiplicity and complexity of laws makes compliance and enforcement difficult, it said.

It also said according to the India Skill Report 2018, only 47 per cent of those coming out of higher educational institutions are employable.

"We currently lack timely and periodic estimates of the work force. This lack of data prevents us from rigorously monitoring the employment situation and assessing the impact of various interventions to create jobs," it said.