Labour code to bring distinct liberalisation: Niti Aayog VC Rajiv Kumar

The proposed labour codes, expected to be tabled in the Parliament this month, will not only be simplification of labour laws, but also bring in an element of “distinct liberalisation” with them, said Rajiv Kumar, Vice Chairman, Niti Aayog.

“The four labour codes which will be tabled in Parliament this month, will not merely be a simplification of labour laws, but it will also bring in distinct liberalisation in some conditions that affect the labour sector,” Kumar said at the 91st Annual General Meeting of the Indian Chamber of Commerce in Kolkata today.

In her Budget speech last week, Union Finance Minister Nirmala Sitharaman had said that the government planned to concise labour laws into four broad codes on wages, social security, industrial safety and welfare, and industrial relations.

Further, Kumar said, there was a case for lowering corporate tax in India.

“Overall the corporate tax structure is high, and we will try to bring it down,” said Kumar.

Sitharaman had, last Friday, announced a reduction in corporate tax for companies with annual turnover of up to Rs 400 crore to 25 per cent from 30 per cent earlier.

The government will also overshoot its disinvestment target this year, and the Aayog has recommended a list of 50 public sector units for the same. As of now a short list of 24 has been created by the Centre.

Kumar added that the privatisation of four more airports is in pipeline.

The government has set a disinvestment target of Rs 1.05 trillion for this financial year. This represented a 16 per cent jump from the Rs 90,000 crore target set in the interim Budget. The FY-19 disinvestment target was Rs 80,000 crore.

Also, the Central government has embarked upon a survey of government-owned properties to determine the land availability.

According to Kumar, this could happen by way of long term lease to private developers, unlocking for building the affordable houses or even sale of land.

Need to bring down cost of capital

Speaking at the event, Sanjeev Sanyal, principal economic advisor to the Union finance ministry, said there was a need to bring down the cost of capital in India.

To reduce overcrowding in the debt market, the government will go for external soverieign bond issuance is likely to finalize a sovereign benchmark for external borrowing by September this year, he said.

“The government is working on a sovereign benchmark for external borrowing, which will be finalised by September this year,” he said.

In the Union Budget presented last week, Sitharaman had said the government would borrow in foreign currency to finance the budget deficit.

Kumar also said there were problems related to the transmission of interest rates, and deposit and lending rates have very large spreads in the banking system.