The Planning Commission on Monday asked states to undertake labour law reforms to generate employment, but cautioned that even 8 per cent annual economic growth would be insufficient to absorb the jobless populace.
The call comes in the wake of the Tenth Plan target being set to generate 50 million employment opportunities by 2007.
"Many state-level labour laws have outlived their utility and their continuation should be reconsidered. Their rationalisation will encourage employers to formally hire more labour," Deputy Chairman Planning Commission K C Pant said.
Addressing a conference of the state planning secretaries here on the employment strategies in the Tenth Plan, he said even with economy growing at 8 per cent per annum, demand for labour generated by the growth process would not be enough to productively absorb new entrants to the labour force.
He said it would be therefore necessary to alter the structure of growth in favour of labour intensive sectors and to create conditions for higher labour absorption in each sector, without affecting the overall growth target.
He lamented that rigidities and procedural complexities in the application of labour laws has become a source of harassment of employers by the enforcing agencies.
"Such practices only discourage an entrepreneur from either hiring labour or from formally acknowledging hiring of workers, an outcome which is opposite to the purpose that labour laws were supposed to serve -- protecting the interest of workers," he said.
Planning Commission, Member, S P Gupta said in measuring employment, no headcount, but gainful employment by counting hours of work should be done.
Rationalisation of labour laws and procedural simplification in their application will improve compliance and will also encourage employers to formally hire more labour, Pant said.
He said, at the same time, certain effective labour laws are needed to guard against the exploitation of labour.
The number of rules, regulations and laws which have a bearing on use of labour is rather large. A focal point in states is required to regularly assess and fine-tune the balance between various interests, such that the net effect leads to creation of new employment opportunities.
Pant said the Tenth Plan reflects the Centre's commitment to create 10 million employment opportunities annually.
While 30 million new employment opportunities will come about in the process of growth; special programmes and schemes, aimed at enhancing the labour intensity of growth process, will have to be undertaken to generate approximately 20 million more jobs.
He told the states that they have to play a crucial role towards achievement of the employment targets and their role and responsibility has been built into the macro growth and employment perspective of the Tenth Plan.
Pant suggested all states identify a nodal department to track and report the developments in the area of employment generation.
Gupta said the relation between poverty and employment and the asset of the poorer sections in terms of labour and skill dependency ratio needs to be studied.
The Centre says there are a range of initiatives, which states can take to provide gainful employment like creation of new economic establishments and sectoral initiatives that can yield large benefits.
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