The Confederation of Indian Industry(CII) that is working together with the department of industrial policy and promotion (DIPP) on drafting a New Manufacturing Policy (NMP) is seeking greater flexibility for companies in relation to labour issues.
The new CII chief, Hari S Bhartia told Business Standard that, "We are not talking about a hire and fire kind of policy, but there should be greater flexibility to deal with labour issues in specific manufacturing zones." He added immediately that there should be enough safety net in place to take care of the interests of the labour.
The Union Ministry of Commerce and Industry has sought industry feedback on the issue and has also put up a paper called 'National Manufacturing Policy: A Discussion Paper' on the DIPP website. It says:"Over the years,the various policy initiatives and economic reforms in India have made India one of the fastest growing economies in the world today. However, at just over 15 per cent of GDP, the manufacturing sector in India is not representative of its potential. A major policy intervention by creating National Manufacturing & Investment Zone(s) will be taken up by DIPP to push the manufacturing share in GDP."
Bhartia feels that the manufacturing sector in the country has to grow at a 12 per cent rate to boost an overall economic growth and create jobs. CII has adopted the theme of "Business for livelihood" for 2010-11.
"Creating jobs is the best CSR activity", he said. Every one per cent growth in the manufacturing sector would create 20-30 million additional jobs. CII feels that agriculture, that currently employs nearly 50 per cent of the population, would not be creating many fresh jobs. These would come mainly from the private sector including services, manufacturing and infrastructure sectors.
"However, labour intensive industries require a regulated environment to operate optimally. This would also draw more investments in these sectors," Bhartia said. The discussion paper proposes,"To ease the burden of payment to labour at the time of closure of unit, a job loss policy has been conceived for the proposed NMIZs. Under this the asset striping of the entity will not have to wait until the payment has been made to the labour. This could help ease the pressure on the manufacturing entity considerably".
CII, however, maintained that wherever there would be some dilution of labour welfare related laws to allow greater flexibility to manufacturing companies in the National Manufacturing & Investment Zones, an alternate safety net has to be in place to protect labour interests.
