New Delhi, Feb 2 (KNN) A remark made by a senior bureaucrat in the Government sums up the dilemma of all political parties when it comes to labour reforms. He said, “since 1991 not-withstanding who is in power, the Ministry remains perpetually in ‘labour pains’ for reforms but delivers nothing”.

Things may be up for a change. 

For the first time, the Economic Survey 2016-17 deviated from the annual customary remarks of need for labour reforms to the specifics of changes required.

It advocates a pragmatic approach of focusing on reducing the cost of compliance of social security related labour laws than pushing for complete overhaul.

The Survey advocates for providing more choices to the workers while opting for service providers of Provident Fund or Insurance which would foster competition amongst service providers. 

Currently workers as well as employers are frustrated with both Employees’ Provident Fund Organisation (EPFO) and the Employee State Insurance (ESI). So much so the Finance Minister had in his budget speech last year said that EPFO and ESI had captives than clients.

Besides highlighting the need for choice to workers,  the Economic Survey suggests ‘a gradual move to ensure that at least compliance with the central labour laws is made paperless, presence-less and cashless’.

The Union Budget (2017-18) takes it further. 

In his Budget speech Finance Minister Arun Jaitley promised that “Legislative reforms will be undertaken to simplify, rationalise and amalgamate the existing labour laws into 4 Codes on (i) wages; (ii) industrial relations; (iii) social security and welfare; and (iv) safety and working conditions.”

The Industry particularly MSMEs have raised the issue vociferously in the wake of drive for cashless economy and push for digital payments.  The MSME sector employs millions but many of their workers are off record to save on social security and compliance costs.

The Federation of Indian Micro and Small & Medium Enterprises (FISME) approached PMO and had a series of interactions in December and January to bring forth the need to rationalize social security costs for small businesses and to bring in more competition  to improve services of social security providers. 

“We have emphasized before the Government that the cost of social security needs to be brought down from over 30% currently to around 10%”, says Dr. Sangam Kurade, President of FISME.     

FISME also pointed out that the contribution of the central government  towards an employee did not exceed 10% and that is what the private sector especially the MSMEs could at best be expected to bear. (KNN Bureau)