Govt: India Inc not investing in labour-intensive sectors
The Union government on Thursday questioned India Inc over its “reluctance” to invest in labour-intensive sectors even in states where labour laws had been made flexible. The government flagged the issue at the release of the NITI Aayog’s three-year action plan, which disagrees with the critics who have suggested that economic growth has been jobless so far.
The action plan, which replaces the five-year plan process of the Nehruvian era from the current financial year, is optimistic that the economy will return to an 8 per cent growth rate in two-three years, if not sooner.
Releasing the action plan, Finance Minister Arun Jaitley said the Indian economy would hugely benefit if it managed to adhere to the strict fiscal and revenue deficit targets laid down in the action agenda (2017-18 to 2019-20).
The action plan, released more than three months after it was first circulated among chief ministers, proposes reduction of the fiscal deficit to 3 per cent of GDP by 2018-19, and the revenue deficit to 0.9 per cent of GDP by 2019-20.
“Sticking to stiff fiscal and revenue deficit targets given in the action agenda would bring huge benefits for the Indian economy,” Jaitley said.
Responding to the criticism of inflexible labour laws being a hindrance to private investment, Labour Secretary M Sathiyavathy said when many states had adopted flexible labour laws, industry should also come up and invest in sectors which were labour-intensive.
She said eight states so far had amended the Industrial Disputes Act, giving more flexibility to firms to fire workers, while the government had extended the benefit of fixed-term employment in apparel and textiles.
Anand Mahindra, chairman of Mahindra and Mahindra (M&M), said big industries didn’t go to labourintensive sectors perhaps due to scars from the past. “We need to create bi-focal approach to growth as we need big firms alongside small scale industries, which are in bigger need for flexible labour laws,” he said.