Government should amend Apprentice Act to generate more employment
NEWDELHI: India’s economy is set to accelerate in 2019-20 on the back of improving investment conditions, but the Centre needs to amend the Apprentice Act for greater job creation, said Sandip Somany, president of Federation of Indian Chambers of Commerce and Industry (FICCI), and also the vice chairman and managing director of Hindustan Sanitaryware and Industries Ltd. Edited Excerpts:
The Modi government carried out many important reforms such as the GST and insolvency code. Given its brute majority in the lower house, which other areas it could have carried out more reforms?
They did a fair amount of reforms. The reforms which they have not done, and which future governments will have to do is judicial reform. Our judiciary is clogged. We need more judges, we need more courts and speedier justice, fundamentally. Any new government will also have to focus on agricultural reforms to improve productivity and product mix. From an industry point of view, we also need to have low cost of capital, which is not the role of the government directly, but the role of the RBI. The real interest rates are at a life-time high. With low inflation—at 2.3% in November— there is no justification in the rates of interest being so high. So, there should be at least a
reduction of 100 basis points.
What about land and labour reforms?
On labour reforms, the government has passed this legislation about hiring people on a con-
After the general elections, will a coalition government hinder or facilitate the reforms process?
FICCI is a body to promote trade and industry. I would refrain from commenting what kind of government will be formed, that should be left to the people of India. I would just like to say that the people should elect a government which is reformist, decisive, stable and honest. That is what will serve the people of this country. We will have to be worried if there are many people, with very diverse views, cobble themselves together to form a government.
Job creation is one of the biggest challenges. Why can’t the Indian industry create more jobs?
A few things need to be done to create jobs. Firstly, the Apprentice Act should be changed. The Act says you can hire 2-10% of people as apprentices in a company. There are 76 million small scale firms in India. The average employment is less than six people. So, they should change the Act and say that a small scale firm can hire even one apprentice. If half of the companies hire one apprentice each, one, the person will get trained, he will also get paid. You will create 35-40 million jobs immediately. Secondly, if I hire a person as an apprentice, his wage is subsidized by the government by ₹1,500 which should be made ₹2,500. Third, we need a ministry for employment generation. At present, employment generation is nobody’s baby. Fourth, we need reliable statistics for where labour is being used.