New Delhi: India needs to unleash second generation labour reforms and capitalise on demographic advantage for creating new firms and jobs, a government document said Wednesday.
"It is imperative to use India's unique demographic moment wisely and unleash the second generation reforms," the Economic Survey for 2013-14 stated.
The suggestion assumes significance as the employment growth during 2004-05 to 2011-12 only 0.5 percent compared to 2.8 percent during 1999-2000 to 2004-05.
India with a large and young population has a great advantage. The average age of the 125 billion strong country's population will be 29 years in 2020, even younger than the 37 years of China and the US.
Besides, the proportion of working-age population in India is likely to increase from 58 percent in 2001 to more than 64 percent by 2021, adding about 63.5 million new entrants between 2011 and 2016 with a large number of young persons in the 20-35 years age group.
Taking advantage of such an opportunity is contingent upon the progress on the human development front, the survey suggested.
According to the document, the ultimate goal of the economic policy is to create a sustained renaissance of high growth in which hundreds of millions of good quality jobs are created.
Good quality jobs, as per the survey, are created by high productivity firms, so this agenda is critically about how firms are created, how firms grow, and how firms achieve high productivity.
In present scenarios, it observed, labour laws create strong incentives for firms to avoid hiring a large number of low skill workers and an array of problems holds back the entry and maturation of new firms which protects existing businesses, even if inefficient, and limits entry and competition.
Taking a first step to revamp labour laws in a decade, the new government has planned to amend the archaic Factories Act, 1948. Earlier most governments have avoided labour reforms for fear of a backlash from the politically powerful labour lobby.
Minister of State for Mines, Steel and Labour Vishnu Deo had recently told the Lok Sabha in a written reply that the proposed major amendments would include relaxing restrictions on night duty for women in factories subject to certain conditions and increase in the limit of overtime to 100 hours (existing 50 hours) in a quarter.
The survey also said farm employment has decreased from 58.5 percent of entire workforce in 2004-05 to 48.9 percent in 2011-12 whereas industry workers proportion increased from 18.2 percent in 2004-05 to 24.3 percent in 2011-12.
Besides the employment in services sector has increased from 23.3 percent of entire workforce in 2004-05 to 26.9 percent in 2011-12.
Survey pointed out that slowdown in employment has been a serious concern in recent years.
As per the National Sample Survey Office (NSSO) data, the number of persons in he workforce increased from 398 million in 1999-2000 to 458 million in 2004-05 an increase of nearly 60 million or 15 percent in five years.
The data further revealed that the workforce increased to 473 million in 2011-12 and recorded an increase of 15 million in absolute terms and by 15 percent over a span of seven years.
The data further revealed that there was a decline in agriculture workforce by over 36 million between 2004-05 and 2011-12. On the other hand the, employment in non-farm sector increased by 51 million with industry and services contributing nearly 31 million and 20 million, respectively.
The survey said that the decline in the share of employment in agriculture has been observed in most countries in their development process.
On the industrial relations, it said, "Owing to constant endeavour of industrial relations machinery of both center and states, the industrial relations climate has by and large remained peaceful and cordial".
While the number of lockout and strikes reported in 2008 at 421, the figure stood at 181 in 2013. Similarly the figures of man-days lost were 17.43 million in 2008 and 3.29 million in 2013.
