Laws may be making labour market rigid: PM

The Prime Minister on Tuesday said the country needed a sustained growth of 9-10% a year to make a dent on poverty, unemployment and underemployment.

The Prime Minister on Tuesday said the country needed a sustained growth of 9-10% a year to make a dent on poverty, unemployment and underemployment.

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“It is important that gains of enhanced productivity are equitably shared among shareholders, workers and consumers,” he said.

The Prime Minister was inaugurating the 43rd session of the Indian Labour Conference, which is meeting here to discuss the labour market in the wake of the economic downturn and problems of contract labour.

Pointing to laws like contract labour and amendments planned to include more of the workforce into the formal sector, Singh said, “If we want to draw more and more workers into the organised sector where they can claim the benefits that currently cover such a very small proportion of our labour force, do we need to rethink the nature of the laws that enforce such benefits?”

He added, “We have enacted several progressive labour laws since independence and some even before that. But it appears that not all these laws have had the intended good effects that we would like to see on the ground.”

Singh said there was a need to consider the possible role of some of the labour laws in “contributing to rigidities in the labour market which hurt the growth of employment”.

In response to concerns raised by trade unions regarding high inflation figures, the Prime Minister said, “The UPA government is making serious efforts to moderate the inflation rates. We have difficulties but we shall overcome.”

All the major trade unions, with the support of major political parties, went on a nation wide strike on September 7 that paralysed the country.