If serious about creating new manufacturing jobs, the next government must immediately address the labour law issues to create a ‘win-win’ for both factory owners and workers, new President of Confederation of India Industry (CII) Ajay Shriram has said.
'We have found that manufacturers are willing to spend up to Rs.5 lakh extra on capital equipment just to be able to avoid hiring one single labourer owing to the archaic labour law restrictions,' Mr. Shriram told The Hindu. 'Any government that wants to create 10 crore new jobs must introduce the fair play approach in labour laws.'
Praising the Centre’s Project Monitoring Group (PMG) that, in the last leg of the UPA Government, pushed stalled projects worth more than Rs.1.50 lakh crore, he said the focus now needed to shift to the States. 'If the States can also replicate what the Centre achieved with the PMG, investments and economic growth will receive a big fillip,' he said. According to data available with the CII, about Rs.6.50-lakh crore worth of projects are stuck at the States level. The implementation of these projects could expand infrastructure and, thereby, reduce transaction costs, he said. The CII estimated that transaction costs in India constituted about 10-12 per cent of total cost of production. In comparison, he said, transaction costs in China ranged between 3 and 5 per cent.