'UNIONs didn't discuss workers' bill with me'

Q&A/ Oscar Fernandes

After three years of consultations, the ministry has come out with a Bill on unorganised sector workers' social security which has got flak from all quarters, including trade unions, for being toothless. How do you think you are going to get it passed in Parliament?

We are going to bring the Bill in the monsoon session of Parliament. About objections of trade unions, I got no representation from them. Nor did they have any discussions with me. (But the minister said he was aware of the nation-wide strike call given by CITU on August 8 to protest the Bill). Let them bring up the issues in Parliament. May be this would lead to a constructive debate and the incorporation of some good provisions. What I can say is: we are open to all kinds of suggestions from all sides.

There are no financial commitments in the Bill. Unions say the Bill is not worth the paper it is written on, if it makes no binding financial commitments. Unions are demanding 2 per cent of GDP for the welfare of 93 per cent of the workforce in the country. There is even a proposal to levy a tax on the salaried class if the government feels it doesn't have resources.

Social security through this Bill is just one element in the gamut of welfare programmes that our government is delivering, like the NREGA which provides 100 days of livelihood security to workers. Instead of asking for a specific percentage of GDP, we should be utilising the available funds in the most efficient manner.

The suggestion of levying tax on the salaried class to ensure social security of the workers is welcome. But bear in mind that this can only be voluntary. How much money can we expect to mop up from a tax on salaried employees in public and private sectors, who are just a small proportion of India's earning population?

What about the social security schemes suggested by the National Commission for Enterprises in Unorganised Sector (NCEUS) on Unorganised Labour? Can they be made part of the legislation which would require the government to deliver the provisions on demand?

Why not? Social security schemes can be made part of the legislation. The Group of Ministers (GoM) is considering the matter.

The Central Board of Trustees has fixed the rate of interest for contributions to the Employees' Provident Fund (EPF) at 8.5 per cent for 2006-07. Unions are asking for 9.5 per cent. Prime Minister Manmohan Singh had assured that the rate would be maintained at 9.5 per cent. This was the rate of interest the NDA government had offered.

Given the resources that we have, the rate we have fixed is the best one possible. There is no surplus in the fund to propose a higher rate of interest. I concede that the prime minister had given an assurance. But we also have to consider the circumstances in which the commitment was given. The situation has changed and in the present circumstances, a higher interest rate is not possible. We had the same rate of interest last year. Why make it an issue now?

Is the ministry considering a differential rate of interest for EPF subscribers of different income groups? A higher rate of interest for low income workers and lower interest for high income employees?

We cannot have a system of graded rates. Such a proposal can be disputed. As of now, we are not thinking of introducing a differential rate of interest.

What about the proposal to invest 5 per cent of the EPF funds in mutual funds?

Yes, the ministry had a proposal but the EPFO is not in favour of the scheme and did not permit such an investment. The employees think it is risky as it involves complications. Share values can go up but not the earnings every time. I think the risks involved are worth taking but stakeholders are not in favour of such a move.

While the EPFO records around four crore accounts in the country, the actual number of subscribers is only around 2.5 crore. What steps are you taking to get rid of these double and triple accounts in the name of an individual subscriber? Also, employees are facing problems in shifting their EPF accounts, whenever they move from one company to another.

We are computerising all EPF accounts and will take care that the accounts which are not in use are removed. For the smooth transfer of the accounts, we will provide a permanent EPF number like PAN or a social security number, which will be the same, no matter where your account is. Such a system can be used for contributions made by the unorganised sector as well.

Labour laws need streamlining. The bonus ceiling under the Payment of Bonus Act also requires to be increased.

We are in the process of reviewing some labour laws and will make necessary changes, wherever required. There is a proposal to enhance the eligibility limit for bonus from Rs 3,500 to Rs 7,500 per month and calculation of ceiling from Rs 2,500 to Rs 3,500 per month.

What about employment and vocational training programmes that your ministry has proposed? The finance minister in his Budget speech has proposed to upgrade all the 1,896 ITIs run by the government.

Upgradation of 200 ITIs is taking place. Another 300 ITIs are to be taken to levels of excellence over the next three years. We are also drawing up plans to upgrade all ITIs in partnership with the industry (PPP model).