Regulatory changes are critical to raising labour force participation in the formal sector and a few key reforms can raise the share of formal employment to nearly 40 per cent while creating 1 crore jobs, says TeamLease Services.
According to the staffing firm, a revamp of the regulatory ecosystem is extremely important to further improve the ease of doing business and raise the labour force participation in formal sector.
"A few key but impactful regulatory reforms can raise the share of formal employment from the current 10 per cent to nearly 40 per cent and create 1 crore jobs," TeamLease Services Vice President Sonal Arora said.
The top 10 regulatory changes that can bring about a shift in labour participation include consolidation of 44 central labour laws into 4 labour codes and a unique Enterprise Number (UEN) - creating a unique identifier at the company/legal entity level is a crucial infrastructure for digital economy and ease-of-doing business, it said.
Other reforms include salary choice for employees. Under this, employees should have a choice of whether or not to contribute the 12 per cent employee contribution to Provident Fund, and should have an option between ESIC or Private Insurance.
It further noted that the Shram Suvidha Portal must adopt the PPC - Paperless-Presenceless-Cashless framework in the interactions between employers and government, and employees and government.
Other reforms include the Factories Amendment Bill 2016; Small Factories Act; Amendments in Contract Labour and Regulation Act 1970; Amendments in Industrial Disputes Act 1947; Amendments in Trade Union Act 1926 and Adoption of the Model Shops and Establishment Act.
According to TeamLease, nearly 100 per cent of net job creation in India in the last two decades has happened in small and low-productivity enterprises. About 90 per cent of our labour force works informally and is deprived of social security benefits and a wage premium that can only be paid by formal sector employers.