'Reform Labour Laws To Increase Formal Enrolment'

<div>Time has come to move from the bravado of campaigning to the serious task of governing which includes all the difficult decisions on labour laws, higher education regulations, changing the Right to Education Act (RTE) from focusing on enrolment to focusing on outcomes, says <strong>Manish Sabharwal, </strong>co-founder and chairman of <strong>TeamLease Services </strong>to <strong>Rozelle Laha </strong>of <strong>BW|Businessworld. </strong>The fundamental problem in India is not money. What is needed is essentially a more holistic view of the three Es -- education, employment and employability.<br /><br /><strong>What are the key points for you in the forthcoming budget?</strong><br />The new government campaigned on jobs, won on jobs and therefore should focus on jobs. The budget should set an agenda for labour reforms, skill development and education reforms.<br /><br /><strong>How can the labour laws be best reformed? Which components of the law should be amended on priority?</strong><br />Make labour laws a state subject and let chief ministers decide on labour laws' legislation. Why should we decide from Delhi what needs to be done? Labour reform is a very important component. Labour laws in India are like marriages without divorce. It is very important to have labour law reforms to increase formal employment, so that we can reduce the capital intensity of India&rsquo;s employment and increase manufacturing jobs.&nbsp; Hundred per cent of net job creations since 1990 have happened in the informal sector.<br /><br />Low wage workers see 48 per cent of their salaries earmarked for PF and ESI. People can&rsquo;t live on half their salary. The labour law needs to be overhauled.<br /><br /><strong><img width="200" vspace="3" hspace="3" height="300" align="right" src="/image/image_gallery?uuid=bb2a9f6a-b795-402f-9aff-84795bc7f67c&amp;groupId=36166&amp;t=1403009647818" alt="" />What hurdles do you see in creating a business environment in India? What should be the primary agenda of the Ministry of Entrepreneurship?</strong><br />The regulatory framework makes life very difficult for small entrepreneurs in India. India has a hostile habitat for entrepreneurship. Things like complying with the labour laws and service tax have to be made easier to start a company. A massive simplification and de-regulation is needed. All these definitely won&rsquo;t happen in the budget. The budget at this stage should focus on infrastructure &ndash; soft and hard. Soft infrastructure is the three Es (education, employment and employability). Hard infrastructure is the the Goods and Services Tax (GST), roads and power.<br /><br />The geography of work in India has to change. India has only 35 cities with more than a million people. China has 350 cities. We have six lakh villages, two lakh of those villages have less than 200 people. We need to take people to job and not job to people and hence, changing the geography of work in India is about infrastructure.<br /><br />Sixty per cent of India is already self- employed. The poor cannot afford to be unemployed. They are self employed. The Ministry of Entrepreneurship must be given the mandate to pray to one God, and to do everything to remove the barriers in job creation.<br /><strong><br />What are the challenges in job creation and what are our recommendations for creating more jobs?</strong><br />There is obviously an infrastructure deficit and labour law hurdle in the long run for creation of new businesses. Fifty per cent of Chinese exports come from multinationals who have invested in China. We need to be open to foreign investments because they not only create jobs but train managers and transfer technology. The most important part of foreign investments is not the money they bring in but the management technique and technology they bring which train Indians. We need to think of attracting more FDIs which bring technology and management techniques.<br /><br />Infrastructure reforms, labour law reforms, Apprentices Act reforms, higher education reforms and employment exchange reforms are very important. Last year, the employment exchange has placed only 4 lakh people out of four crore registered jobseekers. We have only three lakh apprentices in India against three million in Germany, 20 million in China and 10 milion in Japan.<br /><br /><strong>Is there a need to reform education system?</strong><br />We should have a complete de-regulation of higher education. Higher education regulations confuse university buildings with building universities. A shift towards learning outcomes is needed. The only hurdle when we set up more and more IITs and IIMs is quality faculty. It&rsquo;s not only more cooks in the kitchen, it&rsquo;s about the recipe. We need to think about innovation and boldness.<br /><br />RTE should be re-named to right to learning act. Its focus should shift from hardware to learning outcome. Focus should shift from enrolment to learning. unemployability is a bitter problem than unemployment. Focus on learning outcomes than enrolment.<br /><br />&nbsp;<br />&nbsp;</div>