Reform of labour laws vital to create employment-intensive manufacturing industries
Updated: Nov 14, 2014 11:52:22am
New Delhi, Nov 14 (KNN) It is imperative for the country to set up employment-intensive industries to create jobs and set the standards for small and medium enterprises to face competition at the international level.
This was stated by Dr. Arvind Panagariya, Professor of Economics and Jagdish Bhagwati Professor of Indian Political Economy, Columbia University, USA, speaking at an interactive session organized by FICCI on the theme ‘Current State of Indian Economy and Future Prospects,’ here yesterday, according to an official release.
He said that the Indian economy was at a juncture where China was almost 15 years ago. China took huge strides towards growth by encouraging manufacturing and labour intensive industries. India could well replicate the success story of China with a series of reforms in policies such as labour laws and sectors such as infrastructure, power, land, agriculture, higher education and healthcare.
Commenting on the existing labour laws in the country, Panagariya said that the present labour laws make it difficult for many businessmen to set up shop as the law proves to be more of an obstacle than facilitator. He added that Rajasthan has showed the way for labour law reforms and to get growth back on track more states need to reform their labour laws.
On the other hand, former Chief Economic Advisor, Ministry of Finance, Government of India, Dr Arvind Virmani, was of the opinion that, at present, with a booming stock market, India was experiencing a gap between financial growth and real growth. The situation can only be improved by increasing investments.
He said that although the IIP numbers have been encouraging in the last few months, consumption has dropped. He suggested that the tightening of fiscal policy and easing of monetary policy could improve the economic health of the country.
Also speaking on the occasion, Chief Economic Consultant, FICCI and Research Professor, Center for Policy Research Dr Bibek Debroy said that the labour laws have a host of sections and these need to be unbundled first. Various sections of labour laws come under the ambit of the Union list, the State list and the Concurrent list, which makes the reform process complex. However, the reforms in labour laws will improve employment elasticity. He added that the government is conscious of the factor market also and would need finesse to confront the issues.
Stating the industry perspective, Chairman, FICCI Economic and Public Policy Council and Past President, FICCI, Y K Modi said that policies should encourage productive job creation and entrepreneurship, and labour laws reforms could be a step in the right direction.
Also, investment in employment intensive industries was the need of the hour, besides ease of doing business. Enforcement of contract and ease of exiting a business were two other major concerns for business, he added.
Modi added that to tame inflation, RBI and government policies were curbing demand instead of increasing supply. He said that investment needs demand and for that the government should focus on enhancing supply, which would eventually contain prices. (KNN Bureau)
This was stated by Dr. Arvind Panagariya, Professor of Economics and Jagdish Bhagwati Professor of Indian Political Economy, Columbia University, USA, speaking at an interactive session organized by FICCI on the theme ‘Current State of Indian Economy and Future Prospects,’ here yesterday, according to an official release.
He said that the Indian economy was at a juncture where China was almost 15 years ago. China took huge strides towards growth by encouraging manufacturing and labour intensive industries. India could well replicate the success story of China with a series of reforms in policies such as labour laws and sectors such as infrastructure, power, land, agriculture, higher education and healthcare.
Commenting on the existing labour laws in the country, Panagariya said that the present labour laws make it difficult for many businessmen to set up shop as the law proves to be more of an obstacle than facilitator. He added that Rajasthan has showed the way for labour law reforms and to get growth back on track more states need to reform their labour laws.
On the other hand, former Chief Economic Advisor, Ministry of Finance, Government of India, Dr Arvind Virmani, was of the opinion that, at present, with a booming stock market, India was experiencing a gap between financial growth and real growth. The situation can only be improved by increasing investments.
He said that although the IIP numbers have been encouraging in the last few months, consumption has dropped. He suggested that the tightening of fiscal policy and easing of monetary policy could improve the economic health of the country.
Also speaking on the occasion, Chief Economic Consultant, FICCI and Research Professor, Center for Policy Research Dr Bibek Debroy said that the labour laws have a host of sections and these need to be unbundled first. Various sections of labour laws come under the ambit of the Union list, the State list and the Concurrent list, which makes the reform process complex. However, the reforms in labour laws will improve employment elasticity. He added that the government is conscious of the factor market also and would need finesse to confront the issues.
Stating the industry perspective, Chairman, FICCI Economic and Public Policy Council and Past President, FICCI, Y K Modi said that policies should encourage productive job creation and entrepreneurship, and labour laws reforms could be a step in the right direction.
Also, investment in employment intensive industries was the need of the hour, besides ease of doing business. Enforcement of contract and ease of exiting a business were two other major concerns for business, he added.
Modi added that to tame inflation, RBI and government policies were curbing demand instead of increasing supply. He said that investment needs demand and for that the government should focus on enhancing supply, which would eventually contain prices. (KNN Bureau)
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