Govt proposes flexibility for industry to downsize workforce | business | Hindustan Times
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Govt proposes flexibility for industry to downsize workforce

business Updated: Apr 01, 2010 16:19 IST

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Freedom to downsize workforce, increase work hours and curtail workers' right to join unions are some of the radical steps under the government's consideration for industries in special investment zones.

Besides, the units in the proposed National Manufacturing and Investment Zones (NMIZs) would be able to employ women in three shifts and would not be governed by the Contract Labour Abolition Act.

In another shift of policy, the Centre would expect the state governments to acquire the land for the NMIZs, which could be promoted mainly by the private sector.

The Department of Industrial Policy and Promotion (DIPP) in the Commerce and Industry Ministry have floated a concept paper for the new Manufacturing Policy, seeking views from different stakeholders.

"The acquisition of land, if any, must be done entirely by the state government and then handed over to the special purpose vehicle (SPV which will run the NMIZs)," the paper said. After the recent row over land acquisition, the Centre has asked the state governments not to go in for compulsory acquisitions for Special Economic Zones.

In general, the government has been following the policy under which entrepreneurs have to buy land from farmers at mutually negotiated price.

The paper said the objective of the new policy would be to increase share of the manufacturing in the country's gross domestic product to 25 per cent from 15 per cent at present.

While, proposals like flexibility to employer for hire and fire of workforce may not go down well with the trade unions, the government claims that the new policy aims at "doubling" the current employment level in the sector.

The new policy would be bolder than the Act governing Special Economic Zones. Even the units in the SEZs do not enjoy the liberty to downsize workforce.

"The situation of the manufacturing sector in India is a cause of concern especially when seeing in the context of transformation registered in this sector by other Asian countries in similar stages of development," the paper said.

The NMIZs could even subsume the SEZs, EOUs and would encompass industrial parks and warehousing zones.

The move has raised the hackles among trade unions.

"It will lead to the exploitation of labour and will be a blot on the UPA government which says it stands for 'aam adami," Hind Mazdoor Sabha Secretary A D Nagpal said.

All India Trade Union Congress Secretary D L Sachdev said the move would be opposed as it goes "against the spirit and content of the Constitution and labour legislations".

He said the government had tried to introduce the similar hire and fire policy in the SEZ Act but the unions did not allow.