NITI Aayog recommends aggressive labour reforms

Mukesh Ranjan

Tribune News Service

New Delhi, August 28

Asking for major reforms in labour laws for improving Ease of Doing Business (EODB) in the country, NITI Aayog today released a survey report in which it claimed that Telangana has beaten Gujarat to provide better environment for businesses.

In the report which was jointly released by Union Law Minister Ravi Shankar Prasad, Commerce Minister Nirmala Sitharaman and NITI Aayog Vice-Chairman Arvind Panagariya, the think tank said firms in labour-intensive sectors find compliance with labour-related regulations “particularly onerous”.

“This fact translates into enterprises avoiding labour-intensive sectors,” it said adding a large number of firms covered in the survey reported that finding skilled workers, hiring contract labour and firing employees were major obstacles.

“In addition, more flexible labour laws will also allow enterprises to grow larger and reap economies of scale, generating productivity improvements, job creation and higher growth,” the report noted.

The survey covers more than 3,000 enterprises across India and makes an effort to assess EODB from their perspective as opposed to the perspective of policy makers.

Introducing the broad contours of the report, NITI Aayog CEO Amitabh Kant, while informing that Telangana has done better than Gujarat, also hailed the states like Jharkhand and Chhattisgarh for improving their rankings.

Ms Sitharaman said this report is going to be “the most important” contribution that outgoing NITI Aayog chief is making and “I am sure it is going to reveal lots of things”.

Prasad noted that India has transformed a lot in the past three years. He was optimistic that India should emerge as a hub for international and domestic arbitration centres. He called for a separate kind of index for measuring digital ecosystem of states. “India can become a country for innovation...the digital infrastructure happening in hinterland is remarkable,” he added.