Good-quality jobs are created by high-productivity firms. Unfortunately, in India, job creation has been stymied by a welter of labour laws that include antiquated ones such as providing spittoons at workplaces.
While between 1999 and 2005, the nation created 60 million jobs, in the next seven years, only 15 million jobs were added. In such a dismal scenario, the NDA government’s step to refurbish the country’s labour laws is a welcome move. The Cabinet on Wednesday cleared two major Bills for labour reforms — the apprenticeship Act and the factories Act amendment Bills — making them relevant to the demands of industry and opening up more opportunities for the youth, a promise that was made by Prime Minister Narendra Modi during his election rallies.
Apprenticeships are an effective way of ensuring that entry-level workers have the required skills to join the formal workforce by learning on the job. Apprenticeship programmes can aid important transitions — from agriculture to non-agriculture, from rural to urban, from the unorganised sector to the organised, from school to work, and from subsistence self-employment to wage employment. Several countries have benefited greatly from such focused programmes on skilling the workforce. The new apprentice Act gives more flexibility to establishments to engage apprentices while adding trades under the training programmes. Under the proposed changes in the factories Act, 1948, women will be allowed to do night shifts and workers will be able to do more hours of overtime. These steps are expected to open up more job opportunities for the youth.
While such steps are important, one must not forget that reforms in labour laws should also be accompanied by universal social security plans. Besides providing a safety net for workers when companies retrench during a period of slowdown, these will also help counter a potential backlash from labour unions.