Favouring labour reforms but without 'hire-and-fire' system, Planning Commission Deputy Chairman Montek Singh Ahluwalia on Friday said rigidities in labour laws were affecting the domestic job market and raising costs of companies especially in manufacturing sector.
"We (the UPA government) have categorically said that we are not in favour of hire-and-fire. But there should be some flexibility in labour laws. We need to find a consensus," Ahluwalia told a conference of trade union body AITUC.
Flexibility in labour laws, contract farming and speedy infrastructure development were vital for attaining 10 per cent economic growth.
Ahluwalia also agreed that trade unions in India need to be strengthened as, at present, they represented only 8 per cent of organised labour, a level lower than most nations.
Admitting that the country was witnessing jobless growth, Ahluwalia said higher growth will generate more jobs. There was a need for generating "quality jobs" for which stress has to be given to education.
He outlined the need for faster infrastructure development, which would push up growth and create more jobs. "The country is slated to grow by 8.1 per cent this fiscal and the average growth will be 7.5 per cent in the last three years. . . Now, 8 per cent growth is taken for granted. We are looking at 10 per cent," he said.
However, he said: "This is not going to happen unless there is a massive increase in investment." He said the decline in investment in farm sector has led to lower growth and wide-spread distress to farmers.
In this context, he said contract farming should be encouraged with proper safeguards for farmers.