The Union Cabinet is expected to take up tomorrow the proposal by a group of ministers to develop a social security cover for the unorganised labour.
Labour Minister Sahib Singh Verma said the proposal would impact about 370 million workers in the unorganised sector. He was speaking at a seminar on employee relations in the services sector, organised by the Confederation of Indian Industry (CII) today. He said the key issue would be the funding of such a scheme, for which the government would have to bear a part of the cost.
Officials said the group of ministers, headed by deputy Prime Minister LK Advani, had proposed that a cess be levied on petroleum and diesel to fund the same partly.
The officials said a cess was easier to collect than imposing surcharge on the middle class.
Meanwhile, another group of ministers has finalised its recommendations on broadening the scope of employment of contract labour. Verma said he was hopeful of introducing the same in the winter session of Parliament.
The proposal seeks to outsource non-core activities of a company to contract labour but after providing for adequate social security safeguards like pension, medical and insurance benefits to such employees at par with employees on regular tenure.
They will also be entitled to all statutory benefits during their contract period, like provident fund and gratuity. The recommendations to amend the Contract Labour Act of 1970 are being examined by the law ministry now. He said this would allow companies to calibrate their employment requirements to their needs.
The minister said when the domestic manufacturers had to compete globally by ensuring cost competitiveness, it was essential that their labour costs did not rise. He said there might be a need to downsize also at times. This would be possible by allowing employment of labour on contract.
