New Delhi, June 23 (KNN) The government on Wednesday announced a special package with an estimated annual outgo of Rs 6,000 crore for the garment industry, one of the much awaited labour reforms in the textile industry. It is expected to create additional 1cr jobs in the sector.

Labour reforms were due for a long time and concrete reforms were demanded post 1991 liberalisation period.

A recent study of Confederation Of Indian Industry ( CII) highlighted that Indian textile industry can create over 50 million jobs. Recognising this potential, the government announced reforms like elimination of rigid contractual employment rules by introducing fixed-term employment; bring in parity between the contractual and permanent labourers in terms of wages and all other incentives; increasing over-time limit to 8hours/ week as was required by textile ministry that was pushing for overtime limit to 100 hours per quarter.

The other major landmark decision has been taken with respect to Employees’ Provident Fund Scheme   where the government has decided to bear full 12% of the scheme for new workers earning less than Rs15,000 per month for the initial three years.

Talking to KNN, Ashok Rajani, Chairman, Apparel Export Promotion Council, said, “These reforms would bring out the best in apparel industry. The government has realised the fact that the apparel industry has highest potential to generate jobs in the formal sector. India was waiting for long for this pull factor in employment generation and these will be definitely providing them.”

He further added, “The government has also taken a good decision to make it optional for employees earning less than Rs. 15000 per month to contribute to EPO Scheme.”

However, Arvind Sinha, President, The Textile Association Mumbai said, “The recent labour reforms are definitely a good step. But somewhere they would also be affecting the manufacturing units as their costs would shoot up even more as even contractual workers would have to be brought under the incentive system of sector.”

But he applauded government’s decision of providing fixed-term employment.

“This is expected to give more positive result to industry than workers as labour turnover rate is quite high. This would ensure that workers do not leave their jobs frequently.

Retrenchment of workers is not an issue today because its firms today who are facing high turnover rates. Overall, the problem of job insecurity has been tackled which is commendable” he concluded.

These labour laws are set to push ahead the agenda of employment generation and increased textile export. Rigid labour laws caused India to lose its competitiveness to Bangladesh and Vietnam in 2000s decade. The landmark reform has been in providing job security to workers, which was also the bone of contention between firms and unions. The fixed-term employment would help in channelizing the unorganised, unskilled workforce to the formal sector leading to the increase in quality employment.  (KNN/ TL)