Labour reforms: If the country needs to create quality jobs, it needs to ensure a minimalist labour regime in the country. Too many labour laws both in Central and State government have resulted in many bottlenecks, which has affected industry’s growth and investment. For example the growth of SMEs is being mainly constrained due to large number of regressive laws, which needs to be addressed soon enough to ensure growth in the manufacturing sector.
Labour reforms must be framed in such a manner that it ensures the ease of doing business and simultaneously leads to jobs creation. India’s labour laws are extremely rigid and discourage industrial employers to hire. Rather, it encourages contractual labour without social security benefits.
The need is to have a modern labour law that encourages employers to keep more workers in formal roles, with work-linked wages and social security benefits. Besides, the laws should also focus on easing the compliance burden on small and medium enterprises. Some steps have been taken in this direction with the introduction of unified labour portal. However, a lot more needs to be done.
Road ahead
The government along with the industry needs to frame a holistic policy identifying the sectors that have high job potential like healthcare, tourism as well as MSMEs. The Government should involve more industry people in sector specific areas to mainstream their efforts and also get industry perspective on job creation.
For example, the Pharmaceutical sector, which is growing at around 15-20% per annum has a potential to create quality jobs in our economy. As per FICCI estimates, around 2.5 million people are currently employed by the life-sciences industry (including chemists, stockists, etc.) and with growth projected to continue at around 20% per annum, the sector will create several jobs in pharma manufacturing, sales and marketing as well as pharma R&D. There have been a number of major scientific and technological advances, coupled with socio-demographic changes that have revived the job prospects in the pharma industry. In areas like sales and marketing, there is a tremendous need for skilled workforce in our business. High burden of disease, good economic growth leading to higher disposable incomes, improvements in healthcare infrastructure and improved healthcare financing will all drive the job prospects in this sector. As per Life Sciences Sector Skill Council and KPMG’s Skill Gap study, the industry is expected to create 1.31 million new jobs between 2015 and 2024.
In addition, healthcare sector has a huge potential for expansion in rural sector, where it is highly under-penetrated. At present more than 50% of the villages in India do not have any pharmacy shop and are being served largely through medical vans. The way we talk about electrical connectivity, healthcare access and availability is also a necessity. To ensure deeper penetration, we need to create many healthcare practitioners, which is one of the biggest challenge given the current system of medical education. We may also need to rethink the concept of minimum education degree for practicing medicine. For instance, create an acceptable qualification below the minimum MBBS degree – especially to serve the needs of rural India.
To sum up, a holistic approach is needed to address the issue of a large number of poorly educated labour force and the skills mismatch prevailing at present. Once education reforms are introduced and implemented, it will be revolutionary and will have a long lasting impact on the future growth and development of the country.
Habil Khorakiwala, Past President & Chairman, Wockhardt writes this piece for FICCI publication “Economy of Jobs”.
