NEW DELHI: The 11th Five Year Plan will focus on flexibility of labour laws to help India compete in the international market.

"It is time for India to compete, but these are sensitive issues on which opinions differ, and we should evolve a consensus on the scope for reforming key labour laws, including the Industrial Disputes Act and the Contract Labour (Regulation and Abolition) Act," says the Planning Commission's Approach Paper.

Greater flexibility

It says, all over the world efforts are being made to introduce greater flexibility, while protecting the legitimate interests of labour. Labour flexibility does not mean "hire and fire." There are many areas in our labour laws that require greater flexibility to generate employment in the organised sector by encouraging employers to expand employment. This flexibility is needed if we want to exploit the enormous opportunities offered by export markets, the paper says, citing the example of China.

States' role

To increase the employment intensity of economic growth, the Plan will focus on the labour-intensive manufacturing sectors. An accelerated growth of manufacturing, at 12 per cent a year or higher, will contribute enormously to creating more jobs. It will ask State Governments to play an important role in making such a growth possible by creating an investor-friendly environment, particularly for the labour-intensive sectors.

The focus industries will be food processing, textiles, small and medium enterprises, tourism and construction. The dismantling of textile import quotas in industrialised countries offers India a huge opportunity to expand textile and garment exports and thus generate substantial additional employment, it says.

Tourism, both domestic and international, provides large possibilities for employment generation in hotels, catering, entertainment, and travel industries. It can also create a market for handlooms and handicrafts. Substantial employment can be generated in the construction sector, given the need to build houses and expand infrastructure.

The National Rural Employment Guarantee Programme must be adequately funded and effectively implemented. Employment programmes in the past have suffered from the poor design of projects and large leakages, including misuse of funds arising from false muster rolls.

It is important for the States to ensure that the implementation does not suffer from these deficiencies, the paper says.

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