TeamLease Services has stated that making regulatory changes in critical labour laws to make compliance more transparent, efficient and seamless will stimulate unprecedented growth and create a conducive environment for the creation of formal jobs in the economy.
Listing some of the most urgent reforms needed to accelerate formal job creation, the people supply chain company says that a few strategic, “but impactful regulatory reforms can raise the share of formal employment from the current 10% to nearly 40% and create 1 crore jobs.” Considering that almost all the net job creation over the last two decades in India has been witnessed in the small and low-productivity enterprises, nearly 90% of the workforce remains outside the ambit of social security benefits.
The regulatory changes suggested by TeamLease are as follows:
Streamlining Laws and Regulations
Expediting the consolidation of the existing 44 central labour laws and over 150 state laws, while updating those with outdated relevance, will reduce the multiplicity of rules that induces procedural delays. “Laws with similar objectives must be amalgamated to avoid duplicity and compliance burden.” Furthermore, TeamLease also makes a case for a Unique Enterprise Number (UEN) for every company to ensure consolidation of services, compliance, and regulation based processes between the different government entities and the organisation. Adopting the PAN number as the UEN has been suggested, as was the initial consideration of the government.
Increasing transparency and choice
Giving employees a higher say in their salary deductions, to increase the ability to choose their personal level of contributions has been recommended to make the payroll deductible structures less regressive. Additionally, it has been suggested that the Shram Suvidha Portal must adopt the PPC (Paperless-Presenceless-Cashless) framework to make it more efficient and less time consuming.
Revisiting, revising and passing Amendments stuck in limbo
Passing crucial amendments in several labour related laws, that are likely to empower workers, entrepreneurs and employers, is also strongly suggested. 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 have all been named as crucial pieces of legislation to propel stronger labour laws, and in turn, help the economy grow.
Sonal Arora, Vice President, TeamLease Services, said, “A revamp of the regulatory eco-system is extremely important to further improve the ease of doing business and raise the labour force participation in formal sector.”
One can hope that alongside focussing on skilling and entrepreneurial initiatives, updating and amending labour laws remains a top priority for the government in 2018. While steps taken in the last few years have been in the right direction, the regulatory changes need to be speedy, timely and comprehensive more so than ever. As TeamLease states, the aim of such regulatory changes must be to “create a conducive environment that stimulates the growth of enterprises as well as formal jobs and make life easier for entrepreneurs across labour, taxes, environment, land and helps an enterprise grow.”