One Year of UPA Government : Major Decisions and Initiatives - Labour & Employment

            In keeping with the National Common Minimum Programme (NCMP) of the UPA Government to ensure welfare of all workers, the UPA Government held extensive consultations with social partners through tripartite mechanism to protect the interest of workers.  Labour Reforms and EPF interest rate were among the dominant issues.

EPF Interest Rate

The government approved the 9.5 per cent rate of interest on EPF amount of subscribers as recommended by the Central Board of Trustees for the years 2002-03 and 2003-04. The issue was pending for the last three years. The Employees Provident Fund Organisation (EPFO) brought 19,854 establishments with 6,02,669 members under the purview of the Employees Provident Funds & Miscellaneous Provisions Act, 1952 as a result of country-wide Special Coverage Drive launched during January-March 2005.  The EPFO recovered Rs. 1,894.82 crore as EPF dues from the defaulting establishments during 2004-05.

In an unprecedented move, Members of the Parliamentary Consultative Committee interacted with Regional Provident Fund Commissioners from all over the country on the functioning of the EPFO at grassroots level and suggested improvements. 

Labour Reforms

To strengthen the tripartite consultation process as specified in the NCMP, extensive consultation were held with the social partners on labour welfare issues.   The Labour Minister held consultations with representatives of the Employers and the Central Trade Unions to build a consensus on labour reforms. The government’s view on the issue of labour reforms stipulating policies and schemes that would promote greater production and labour welfare and fewer regulatory labour laws was impressed upon. The employers were told to share greater financial responsibility for providing adequate social security net for workers.

Unemployment Benefit Scheme

            A new scheme called “Rajiv Gandhi Shramik Kalyan Yojana”, the first of its kind, has been launched to provide unemployment allowance to workers during involuntary unemployment.  Under the Scheme, effective from April 1, 2005, workers covered under Employees State Insurance (ESI) Scheme, who lose their jobs due to retrenchment, closure of factories/establishments and permanent invalidity not arising out of employment are to receive a monthly unemployment allowance for a maximum period of six months.

Extension of ESIC Scheme

The Employees State Insurance Corporation (ESIC), functioning under the aegis of Labour Ministry, has increased wage ceiling limit from Rs. 6,500 to Rs. 7,500 to net in more workers into ESI Scheme.  It has also extended its coverage to new geographical areas bringing within its ambit 1.5 lakh more workers.  Adding more sectors to coverage, ESIC decided to extend the scheme to educational institutions and to all municipal corporations, municipalities, cantonment board areas and other notified town areas in a phased manner. The ESIC brought within its net additional 8,000 factories and establishments following intensive surveys in implemented areas. 

Relief in Tsunami Hit Areas

ESIC deployed medical relief teams comprising doctors and para-medical staff to coastal areas of the country affected by Tsunami fury. The medical teams provided emergency medical services including free supply of drugs and dressings to the affected people.

The Employees Provident Fund Organisation also made special arrangements for expeditious disposal of claims from the entitled claimants in the affected areas.  It set up special cells in the affected areas to facilitate payment of Provident Fund and pension to the families of the members of the Fund who were killed in the Tsunami.  

Welfare of Unorganised Sector Workers

The welfare of workers in the unorganised sector, who constitute 93 per cent of the total workforce, remained the focus of concern of the Labour Ministry.  The Ministry held consultation with social partners for redrafting the Unorganised Sector Workers Bill, 2004.  The objective of this legislation is to regulate employment and conditions of service of workers in the unorganised sector and to provide for their social security, safety and health.

The Integrated Housing Schemes for beedi workers was revised and the financial assistance (subsidy) for each unit doubled upto Rs. 40,000. The eligibility ceiling has also been increased from Rs. 3,500 to Rs. 6,500.  These changes are applicable to iron ore, manganese ore, chrome ore, mica & limestone and dolomite mine workers also.

In order to improve healthcare of 40 lakh beedi workers, the Labour Ministry also launched a pilot scheme to provide a one-time maximum grant of Rs. 2 crore per hospital to State Governments, Employees State Insurance Corporation and NGOs for construction of hospitals.  Further, an amount upto Rs. 10 lakh per annum will also be available to such hospitals for reimbursement of medicines.

In order to further augument the Beedi Workers Welfare Fund, the rate of cess has been enhanced from Rs. 2 to Rs. 4 per thousand of manufactured beedis.

Amendment to Labour Laws

A Bill to amend the Payment of Wages Act, 1936 for enhancement of existing ceiling of Rs. 1600 to Rs. 6500 per month has been introduced in Parliament.  This has been done to enlarge the scope as well as prescribe more stringent grievance redressal machinery.  The Rajya Sabha has passed the Bill while it awaits consideration in the Lok Sabha.

To provide flexibility in the employment of women, the Cabinet has approved to amend Sec.66 of the Factories Act, 1948 to allow women to work in factories during night shifts with adequate safeguards.

Enforcement of Minimum Wages Act

In order to monitor the Minimum Wages Act, 1948 more effectively, the Central Government directed States/UTs to develop and introduce a new system of external monitoring through civil society.  Accordingly, State Governments are now including more persons from the civil society to the Advisory Boards constituted to oversee the implementation of the Act.

Skill Upgradation

Skill upgradation and imparting of modern skills to workers is another priority of the UPA Government as only 5 per cent of the total labour force are skilled. The Labour Ministry has formulated a scheme for upgradation of 500 existing Industrial Training Institutes (ITIs) into Centres of Excellence for meeting international standards. The upgradation process is estimated to cost Rs. 160 crore. To begin with 100 ITIs were taken up for upgradation during the year, meeting the cost through internal resources. The World Bank has been approached for financial assistance for upgrading the remaining ITIs. The measure has been taken to improve employability of workers in global and domestic markets. 

New ITIs have been sanctioned under a Centrally sponsored scheme in Jammu & Kashmir and North Eastern States including Sikkim at an outlay of Rs. 130.60 crore.  This will more than double the capacity of training seats in North Eastern States including Sikkim from 7,244 to 16,144.   The training seats in Jammu & Kashmir will also increase from 4,153 to 5,959.

Employment Generation

The Government is targeting creation of five crore employment opportunities during X Plan period. Out of this, nearly three crore employment opportunities will be created in the normal growth process and the remaining two crore through special employment generation programmes.

Elimination of Child Labour

Efforts to elimination of Child Labour particularly in hazardous occupations and processes in a sequential manner received further impetus.  The Government decided to extend the National Child Labour Projects (NCLPs) Scheme from 150 districts to 250 districts during X Plan to rehabilitate children withdrawn from work.  Implementation of 100 additional NCLPs has started with increased inputs for nutrition, health, vocational training, etc.

Core Group

In order to fulfil the commitment made in NCMP, a high-level Core Group under Labour Secretary has been set up to monitor implementation of the policies and programmes contained in the NCMP concerning the Ministry of Labour and employment.

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RK:LV

PIB  SF-31 (15.5.2005)

(Release ID :9274)

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