Govt to frame job policy afresh; labour ministry begins talks with industry

The government is likely to come out with a fresh national employment policy (NEP) amid concerns over the high unemployment rate in the country.

This was proposed by the labour and employment ministry at a Council of Ministers’ meeting on January 4, held to frame five-year sectoral vision plans by the National Democratic Alliance (NDA) government.

The labour ministry has decided to frame the NEP from scratch, a top government official said. An NEP in India has been in the works for over a decade; the first such policy was circulated for inter-ministerial consultation in 2007.

The government had in 2018 formed an inter-ministerial committee to formulate a policy document on jobs and the Noida-based VV Giri National Labour Institute was supposed to submit a draft to the labour ministry.

“However, the labour ministry is not happy with the draft NEP,” another government official said. This will be the second time that the NDA government, under Prime Minister Narendra Modi, is working on a comprehensive policy on employment.

The draft NEP had sought to address policy issues at a sectoral and macro-economic level. It proposed addressing the policy hurdles related to labour laws and issues being faced by the micro and small enterprises.

In 2014, after the NDA government came to power, a two-page NEP was made public for inviting comments but it was later withdrawn. This draft was already in the works when the United Progressive Alliance (UPA) was in power and had talked about focussing on providing skills in the unorganised non-farm sectors, especially construction, to boost job creation.

The basis of the new NEP document would be consultations with industry, labour unions and state governments; the labour ministry has already initiated this process. In September 2019, Labour and Employment Minister Santosh Kumar Gangwar had written a letter to industry bodies and trade unions, s eeking their opinion on employment generation, measures required to set up new establishments, and to increase women participation in the workforce.

“We have received inputs from industry and trade unions. We have also taken feedback from the state governments through regional meets on these issues. A consultative meeting of all stakeholders will be held soon,” a labour ministry official said.

A slowing economy has led to many companies announced laying off workers as a way to cope with it. OYO Group has announced to sack around 1,000 workers and Walmart India has retrenched 56 employees recently “as a part of restructuring exercise”. 

The official statistical agency has pegged gross domestic product growth at an 11-year low of 5 per cent in the current fiscal year. The latest annual survey conducted by the National Statistical Office (NSO) on the country’s labour market showed the unemployment rate at a 45-year high of 6.1 per cent in 2017-18. The labour force participation rate among women declined by around 8 percentage points to 23.3 per cent in 2017-18 compared to 2011-12. The decline was twice as much as for men in the same period.

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