DNA, July 01, 2014
By Pradeep S Mehta
Better opportunity ? Proposed changes include the need for approval from the government for retrenchment in firms with over 300 workers, as against the existing norm of 100 workers
In order to create new job opportunities, one of the most remarkable steps taken by the Vasundhara Raje government is to propose reforms in labour laws, one of the key hurdles in industrial progress and creation of new jobs.
Vasundhara Raje has started taking forward looking steps to improve governance and development in Rajasthan, which are welcome. She should aim at taking the Gross State Domestic Product from the current level of Rs4.8 lakh crore to Rs10 lakh crore by 2018, so that two lakh new direct and six lakh indirect new jobs can be created every year.
In order to create new jobs, one most remarkable step taken by the government is to propose reforms in labour laws, one of the key hurdles in industrial progress and creation of new jobs. The proposed changes include the need for approval from the government for retrenchment in firms with over 300 workers, as against the existing norm of 100 workers; ensuring that at least 30 per cent of the labour force being members to recognise a trade union.
For a worker to be sacked, s/he will need to be given three month’s wages and a six month bonus, over and above the normal dues. These changes will help industry to work with greater peace and do what they are required to do i.e. produce.
However, retrenched workers need retraining with skills to do a different job, which also needs to be provided in the amendment bill. Most importantly trade unions have opposed such drastic amendments and thus there is a need to sit across the table with them to find a middle way, rather than force these changes on them. To get a sustainable solution, the Planning Commission of India has devised the India Backbone Implementation Network (IBIN) in 2013, which is a tool to get opposing stakeholders to sit across the table and sort out their differences.
There are other laws governing factories which too need to be reformed, such as the Factories & Boilers Act. These reforms need to be accompanied by optimal regulations, which will ensure that firms do not engage in laissez faire manner and proceed without any bridle. Another retrogressive law i.e. the Land Acquisition Law (which actually has a very long name) also needs to be amended by the state, which it can do. The way it has been drafted, it may take up to four years for a new plant to acquire land and start production.
Another progressive step is that the state government is contemplating, the possibility of privatisation of electricity distribution companies, or even some of their duties. Our discoms are bleeding from heavy subsidies that they had to shell out to meet with political objectives and the government did not reimburse the same in time.
If the discoms will be privatised, then there are lessons from the privatisation of the discoms in Delhi. In that exercise, the deals were fixed and even the CAG had upbraided the government in Delhi. But the privatisation did not really help as we see now-a-days when most Delhites are screaming in torrid heat after facing record breaking temperatures. Even the experience of Odisha, which was the first state in India to privatise electricity distribution, was sad. Lessons need to be drawn from all such efforts so that Rajasthan does not repeat the mistakes.
Another step taken by the state government is to disband the Planning Board and substitute it with an economic advisory council with most members from outside. In her earlier term the advisory council did exist but hardly met. Some of the work done by the earlier Planning Board under Ashok Gehlot’s regime was good, while most was bad. The problem with the bad work done was the lack of good expertise and poor articulation. Most states have their own planning bodies, some are doing good work while many are not, and some have atrophied because incompetent people are heading them. Rajasthan can learn from their experiences.
The writer is Secretary General, CUTS International. The views expressed are his own
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