NITI Aayog proposes scheme to save jobs from automation
Federal think-tank NITI Aayog has proposed the creation of a so-called Labour Utilisation Fund that can be used to increase the skill-level of the country’s workforce, and paying some of their social security costs, both of which will encourage businesses to hire more.
Niti Ayog vice-chairman Rajiv Kumar said in an interview that the government should consider setting up the fund, which will foot the bill for training and social security of workers . The training, he explained, would make the workers more productive, and therefore, more competitive (in terms of costs).
Kumar suggested that instead of capital subsidy for businesses to make them more competitive in terms of technology, for instance, there was a need for labour subsidy now.
Much like the Technology Upgradation Fund the government set up for the textile industry to adopt new technology, there is need to create a Labour Utilisation Fund, he said.
“We should have a Labour Utilization Fund. It doesn’t have to pay salaries but can be used for better training, for paying provident fund contribution and for covering health costs. In advanced economies, all these things are provided by the public sector,” said Kumar. Doing that would effectively lower the cost of providing employment for companies. Since social security benefits in India do not match those in developed economies, there is a need for dedicated policy and schemes to lower labour costs, said Kumar, adding that it will also help in bridging income inequality in the country.
From the time Kumar took over from his predeccessor Arv- ind Panagariya, the federal think tank has been working on a blue print for the government to create jobs.
“The objective of our policy should be maximizing employment generation. If you do that, everything will fall in place,” said the economist, adding that labour-intensive sectors such as housing, construction, exports, garments, tourism, education and health should be the primary focus of LUF.
Kumar also suggested that the impediments to growth in these sectors should be studied in detail to “figure out where the shoe pinches”.
According to Kumar, economic growth will accelerate further from the 6.3% growth recorded in the September quarter . He added that indications are that private investment, a key to faster growth, was picking up, as hinted by bond issuances and initial public offerings by businesses so far this fiscal.
“Private capital expenditure cycle will start in 2018. I am confident that (because of) the drive to have a more formal and tax compliant economy with no cronyism, private capex cycle is bound to go up. As that goes up, economy can only go better from now,” Kumar added.
NEW DELHI:
Bankers to Essar Steel Ltd may consider extending the deadline for signing binding agreements with resolution applicants when it meets next week, two people close to the development said on the condition of anonymity.
The committee of creditors (COC), led by State Bank of India (SBI), is considering the extension following recent changes in the insolvency and bankruptcy code (IBC) that would require a thorough due diligence of bidders to assess their eligibility.
The deadline for a binding agreement is fixed by the resolution professional and approved by the committee of creditors. The deadline for Essar Steel ends in the last week of December, one of the two people mentioned above said.
According to the bankruptcy code, the resolution process should be completed within 180 days, which can be extended by another 90 days with the approval of the NCLT.
MUMBAI: