Confederation of Indian Industry (CII) recommended the creation of a National Employment Board consisting of members from key Union Ministries, all state governments, industry experts and trade unions, among others, to look into and address issues faced in employment creation in the country.
It also suggested that the government initiate a comprehensive National Employment Mission.
“Employment generation extends to multiple dimensions and a national mission is required to address all aspects holistically. The Government National Employment Mission should include flexibility in hiring, tax incentives, education and skill development, and promotion of labour-intensive sectors,” CII Director General, Chandrajit Banerjee said in a statement.
Recommending immediate action, CII outlined a five-point agenda for the upcoming Budget.
It said that states should introduce “fixed term employment”, while other labour law reforms should receive priority in new central government infrastructure project funding. Transport and power projects along with industrial parks can be fast-tracked for these states to enable them to leverage such employment policies.
“Benefits under Section 80JJAA of the Income Tax Act should be extended for all workers earning up to Rs 50,000 in any sector,” it said.
The industry body also said that under the Prime Minister’s Rozgar Protsahan Yojana (PMRPY), the wage threshold should be increased to Rs 25,000 from the current Rs 15,000.
PMRPY provides for government contribution to Employees’ Provident Fund (EPF) and Employee’s Pension Scheme (EPS) for new employees for three years, and is applicable to workers earning less than Rs 15,000. With wages increasing, the threshold for applicability should also be raised, said CII.
It further said that corporate income tax rebates should be considered for enterprises employing over a certain number of formal workers.
“Skill vouchers and skill wallets may be provided for boosting skilling. This is in accordance with the Skill India Mission of incentive-based support rather than subsidy-based support. Skilling should be demand driven and focussed on the identified 24 high-growth sectors for higher impact.”
Regarding the concept of national minimum wage, CII said that states should have the power to determine minimum wages based on three criteria — geographic location, skill and occupation.
However, this cannot be lower than the minimum wage fixed by the Centre. The concept of a national minimum wage will affect job creation, so it is necessary to give states power to fix their own minimum wages, CII said.
According to CII, while the government should fix the minimum wages of unskilled workers, the wages of the skilled and semi-skilled labour force should, however, be determined by market forces.
To encourage more women to participate in the workforce, CII recommended providing child care and maternity benefit subsidies under the Maternity Benefit Amendment Act.
“While industry is not asking for a hire-and-fire policy, a more flexible labour regime would enable India to align with multiple global trade challenges at a time when other nations are attracting new investments,” the statement said.