New Delhi, Sep 14 (KNN) With the Finance Minister Arun Jaitley entrusted with an inter- ministerial initiative to simplify the labour laws, the MSME sector is hopeful of implementation of his own Budget announcements on EPF and ESI reform.

Labour reform appeared to be high on the agenda of the Modi Government initially and during the first year itself, it initiated quite a few Bills to amend the draconian labour laws. However, due to strong opposition from the vested interests, all of them have been put in cold storage.

KNN has learnt from reliable sources that after passage of the GST Bill the Government is putting high priority to simplification of labour laws and an inter-ministerial group has been formed under the Finance Minister to expedite the process.

In his budget speech 2015, Jaitley mentioned that both EPF and ESI have hostages, rather than clients.  Further, he had mentioned that the low paid worker suffers deductions greater than the better paid workers, in percentage terms.

Elaborating his mind the finance Minister had mentioned that under the Employees Provident Fund (EPF), the employee needs to be provided two options the EPF or the New Pension Scheme (NPS).

He also suggested in his budget speech that for employees below a certain threshold of monthly income, contribution to EPF should be optional, without affecting or reducing the employer’s contribution.

And for ESI, his prescription was that the employee should have the option of choosing either ESI or a Health Insurance product.

Jaitley had also announced that the Government intends to bring amending legislation in this regard, after stakeholder consultation.

Commenting on the issue, Mr. Dinesh Singhal, entrepreneur and past President, FISME, mentioned that the budget announcements were a paradigm shift in the approach of the Government towards social security and the MSME sector was eager for its implementation. We were really disheartened when Government simply ’forgot’ to implement it, commented Singhal.

Though the announcements in the budget speech are required to be implemented before the next budget, in this case there is no action taken report in budget 2016.

With his new responsibility, the MSME sector is reminding Jaitley to keep his promises and implement his own announcements about the reforms in the EPF and ESI Act, mentioned Singhal. (KNN/ DB)