Easier labour norms would come with a social security net, soon. Labour minister Oscar Fernandes told FE that talks are on with management associations to put in place an unemployment cover for the 36 million organised sector labour force. ?We have got a very positive response from the managements on this issue and we hope to put in place a concrete social security scheme very soon,? he said. Government officials would meet the associations this week to take the process forward.
Fernandes said a decision would emerge after a tripartite discussion of workers, entrepreneurs and the government.
The talks between the government and the management groups are at an
advanced stage. Businesses see significant efficiency gains from the scheme. The broad contours of the scheme entail adequate financial support by the employers for the retrenched labour. This could comprise either a direct compensation package for the retrenched employees or an insurance package.
Fernandes made it clear employers must bear the burden of any financial compensation. ?The government will not shoulder the financial implications; our role is to make things easier for both parties?, he said.
Several reports, including World Bank affiliate IFC?s Doing Business in India, has pointed out that India, compared to other developing countries, still does not have a flexible hire and fire rules for employees, which affects the efficiency of companies.
In addition, the process towards working for labour reforms has also been slow. Admitting it, Fernandes said, ?The process is on, a gradual process, and it would take time. It can not happen in one stroke.? Not just the left parties but some other allies of the government have often opposed the move. ?This kind of a policy is detrimental to socio-economic development,? a trade union member said.