Manmohan Singh wary of hire-and-fire

While supporting greater flexibility in labour markets, Prime Minister Manmohan Singh said there could be no 'uncritical endorsement' of the hire- and-fire approach.

He also announced that an extensive food- for-work programme in 150 backward districts as a first step towards a national employment guarantee scheme would be launched within the next few weeks.

"Despite recognising the need for increased flexibility in labour markets, one cannot glibly talk of an uncritical endorsement of the hire-and-fire approach, since the institutions of social security, particuarly unemployment insurance, are not well developed in our country," he said giving away the Shram Awards for 2002 and 2003.

Singh added that the goal of the employment guarantee programme was to provide 100 days' employment to all able-bodied rural persons. A draft bill on this subject had already been prepared by the national advisory council and was currently under examination, he said.

His speech touched upon various aspects like ensuring job-intensive growth, stepping up investment in infrastructure sector and enhancing skillsets of the labour force, promotion of labour-intensive industries as opposed to capital intensive ones and ushering structural reforms only after consulting various stakeholders.

Reiterating the UPA government's commitment to 'reforms with a human face', Singh assured the working classes that his government would not pursue policies adversely affecting their interests. Singh also said that the emphasis would be on employment-led growth with focus on providing every citizen an opportunity to work.

Referring to the phenomenon of "jobless growth" in the last few years, the Prime Minister said that there was a need to reverse this trend so that growth translated into meaningful results for the working classes. "I, therefore, propose a new slogan of our times as rozgar badhao," he added.

He said to achieve the objective of having job intensive growth, attention would have to be paid to agro-processing, rural industries and the informal sectors.

The prime minister said that the government had already constituted a commission to examine the problems of enterprises in the informal sector which would shortly come up with recommendations on the nature and scope of assistance needed.

"Our government is committed to providing a favourable policy environment and direct support for the growth of these sectors through technological upgradation, skill enhancement, credit support and marketing assistance," he said.

He said top priority would be accorded to creation of modern infrastructure to substantially increase job opportunities, specially for unskilled and semi-skilled labour.

Singh expressed concern over the skill levels of the work-force, saying 67 per cent of the 397 million strong work-force was either illiterate or suffered from limited literacy levels and only five per cent of the workers had vocational skills.

"A solution is self evident - we will need substantial investment in skill upgradation and vocational training," he said emphasising the need for the active involvement of industry in the curriculum design and the management of the training programmes.

He, however, cautioned that efforts had to be made to ensure that the incentive system built into our economic policies encourages and does not discourage the growth of employment to the maximum extent possible.

"Our fiscal and monetary policies should promote the growth of labour intensive industries and processes as opposed to capital intensive and labour saving ones. There must also be an honest debate about the functioning of labour markets and its impact on the growth of employment in the organised sector of the economy," he said.

He said structural reforms in a democracy must involve consultation with all stake-holders, particularly the workers and trade unions, urging the business and labour organisations to engage in a productive dialogue with the government on these issues.