NEW DELHI: With the ease of doing business report unveiled by the NITI Aayog on Monday blaming labour regulations for lack of employment generation, Union minister for law Ravi Shankar Prasad said the government would soon amend the Contract Act suitably to address the concerns of the industry.
The report noted that “labour-intensive sectors, which employ more jobs per unit of capital investment, feel more constrained by labour related regulations”. It stated that compared to other enterprises, labour-intensive sectors are 19 per cent more likely to report that finding skilled labour is a major constraint. “The labour-intensive sectors are 33 per cent more likely to report that hiring contract labour is a major or severe constraint. Also, they lose a greater number of days on account of strikes and lockouts, besides witnessing longer duration of getting environmental approvals, added the NITI Aayog report.
The report of the think tank panel also noted that firms with more than 100 employees saw more time taken for getting regulatory approvals compared to those who employed ten people. Sharing the outcome of the survey, NITI Aayog vice chairman Arvind Panagariya said only 20 per cent of the start ups knew the existence of the single window system for clearance in state governments, while stressing the need for more attention for spreading information. The NITI Aayog also said that even among the experts, only 41 per cent were aware of the existence of the single window system set up by the state governments for attracting investments.
Lauding the NITI Aayog for conducting the survey, Prasad said his ministry has begun consultations to initiate amendments in the Contract Act, which will address the issue of labour regulations highlighted by the report. He also said the government is working on steps to be taken to make India a preferred destination for domestic and international arbitration. He added that steps are being taken to set up accreditation councils to facilitate India becoming an arbitration hub.