labour welfare & social security - planning...

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CHAPTER 3.5

LABOUR WELFARE & SOCIAL SECURITY

3.5.1 The productivity of labour is an essentialcondition for the prosperity of enterprises and thewell being of the workers and their families. Whilethe production facilities at workplace and theremuneration are important, attitudes towards work,and the value placed by the society on dignity oflabour are equally important in influencing theproductivity of labour.

3.5.2. The planning process supports theattainment of economic and social objectives inthe labour sector through a set of strategies. Thesupply of labour is kept in tune with demandthrough skill development and vocational training.Appropriate conditions at work are ensured bymeasures taken to promote safety at theworkplace and minimising occupational hazards.A reasonable return on labour is facilitated bylabour laws that regulate payment of wages andprovision of social security to workers.

3.5.3 Situations where the supply of labourexceeds demand by a huge margin can lead tohighly exploitative forms of work. Therefore, aneffective implementation of the existing regulationsrelating to prohibition of bonded (forced) labour andchild labour and monitoring the conditions of migrantworkers is required.

Tenth Plan Objectives

3.5.4 The present infrastructure for improvinglabour productivity and for ensuring the welfare ofworkers covers only a very small segment of thelabour force. The objective of Tenth Plan will be toincrease the coverage of the labour marketinstitutions. The essential condition for this is theprovision of gainful employment to the entire labourforce.

3.5.5 However, certain recent trends make theattainment of these objectives a more challenging

task. The growth of population in the working agegroup is at a substantially higher pace than that ofthe average population. Agriculture used to provideemployment to a major part of the workforce.However, the number of workers deployed inagriculture cropping activities has not increased inrecent years and it has even declined in certain partsof the country. The pace of growth of jobs in theorganised sector has slowed down primarilybecause number of jobs in the public sector (whichhas a three-fourth share in organised sector jobs)has reduced and employment elasticity in the privatesector has decreased significantly. The economicpolicy in general, and labour policy in particular, mustfacilitate the opening up of new employmentavenues. In agriculture and related sectors, thereis need to create more employment opportunitiesin horticulture, animal husbandry, poultry, anddevelopment of watersheds. However, the non-agricultural sectors of the economy will have toabsorb the bulk of the increase in labour force. Thelabour sector has to focus at those kinds ofestablishments where much of the labour finds work.

Labour Policy and The Smaller Establishments

3.5.6 The Economic Census enumerateseconomic activities other than those which arepurely for self-consumption and agricultural cropproduction. It identifies two types of enterprises thatoperate in such economic activities – the ownaccount enterprises (OAE), which operate withoutany hired workers and establishments which hireworkers. Labour regulations apply to the secondcategory. Ninety-five per cent of establishmentsemploy less than 20 workers, and 60 per cent ofthe workers serve in such establishments. (Tables3.5.1 and 3.5.2). In order to reach the bulk of theworkers, labour policies and programmes have tofocus on the requirements of the smallestablishments. This is in contrast to the situationin recent years, where the large enterprises and

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their workers have been the focus oflabour policy.

Development of Vocational Skills

3.5.7 One of the important determinants oflabour productivity is the working skills of the worker.Enterprises will be able to absorb the new entrantsto labour market only if they have the requisitetraining. Surveys have revealed that only about 5per cent of those in 20 to 24 year age group had

any kind of technical education, in contrast to thesituation in several developing countries (Table3.5.3). On the other hand, education levels haveimproved. Fifty-one per cent of those in 20 to 24age group now have middle school level or highereducation. With education becoming compulsory forthose in the 6-14 age group, this number is set toincrease in the future. If the youth do not have theworking skills required by the employers, theincidence of unemployment among the educatedyouth will increase.

Table 3.5.1Distribution of establishments by employment size class

Employment size 1 Agricultural establishments Non agricultural establishments

1-5 86.4 81.3

6-19 12.7 15.4

20-99 0.8 3.1

100-499 - 0.1

Above 500 - -

All establishments 100.0 100.0

No. of establishments (thousand) (371.9) (8,601.2)

1 Employment size includes both the hired workers and those working on ‘own account’ basis.Source: Economic Census, 1998

Table 3.5.2Distribution of workers by employment size class of establishments

Employment size 1 Agricultural establishments Non agricultural establishments

1-5 61.4 35.6

6-19 27.9 24.3

20-99 7.4 18.3

100-499 2.7 10.9

Above 500 0.6 10.9

All establishments 100.0 100.0

No. of workers1 (million) (1.39) (49.66)2

1 Includes both the hired workers and those working on ‘own account’ basis.2Economic Census covers enterprises in selected agricultural activities. These are livestock production and agricultural servicesincluding hunting, tracking and game production, forestry, logging and fishing. Crop production and plantations are not covered. All non-agricultural entrepreneurial activities are included. Activities purely for self-consumption are excluded.Source: Economic Census, 1998


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Table 3.5.3Proportion of vocationally trained among the youth in labour force - international comparison2

Country Age Vocationally trained(per cent of those in labour force)

India 20-24 5.06@

Developing countries

Botswana 20-24 22.42

Colombia (1998) 20-29 28.06

Mauritius (1995) 20-24 36.08

Mexico (1998) 20-24 27.58

Developed Countries

Australia (1998) 20-24 64.11

Canada (1998) 20-24 78.11

France (1997) 20-24 68.57

Germany (1998) 20-24 75.33

Israel (1998) 18-24 81.23

Italy (1997) 20-24 43.88

Japan (1997) 15-24 80.39

Republic of Korea (1998) 20-24 95.86

Singapore (1998) 20-24 66.24

United Kingdom (1998) 20-24 68.46

Note : 1. Vocationally trained persons are defined here as those having education level 3 or 5 as per ISCED Classificationwhich classifies the population across age groups and levels of education starting with level X i.e. no educationand the highest level being level 7 which is post graduate level specialisation in a field. Levels 4 and 8 are notused. Level 3 of education: General education continues to be an important constituent of the programmes, butseparate subject presentation and more specialisation are found at this level. Also classified under Level 3 areprogrammes consisting of subject matter mainly with a specific vocational emphasis of apprenticeship programmes,with an entrance requirement of eight full years of education, or a combination of basic education and vocationalexperience that demonstrates the ability to handle the subject matter of that level. Level 5 of education: Programmesof this type are usually “practical” in particular vocational fields in which they can qualify as high level technicians,teachers, nurses, production supervisors etc. It may be noted however that in developing countries, economicallyproductive skills are acquired orientation in that they are designed to prepare students for not only in training/education institution but also through the family. Only the formal institute/school vocationally trained are shownabove.

2. Only those who have received formal vocational training are shown as trained in this table. To the extent thattraining and skills in India are acquired through informal methods, including training in the family, the Indianfigures are understated

@ Estimates are based on (NSSO Report No.409 on Results of 50th round (1993-94) survey on Employment andUnemployment; Table 20) distribution of persons by technical education in India adjusted by labour forceparticipation rate by sex. The corresponding percentages by sex and residence are rural female 1.7, rural male2.3, urban male 9.4, and urban female 17.0.


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3.5.8 The projections of increase in labourforce indicate that 8-10 million new entrants arerequired to be trained each year during the TenthPlan period. Against this, the vocational training/technical/ professional education sector has acapacity of only 2-2.3 million. The resultant largegap is not entirely due to a shortage in theavailability of training infrastructure. In sometraining establishments, the enrolment is muchbelow the capacity and dropout rate in traininginstitutes is significant in certain instances. So apart of the gap can be attributed to a lack ofdemand for vocational training, since the youthmay not find the training at the vocational traininginstitute enhances their chances of finding jobs.There is a mismatch between the training facilitiesavailable and the skills that employers require.The factors which suppress the demand forvocational training have to be addressed. Inaddition, new ways of generating resources toexpand the capacity for training have to be foundso that the training system can absorb the largenumber of new entrants to the labour force. Areform of the vocational training system is,therefore, required.

Reform of the Vocational Training System

3.5.9 The objective of providing skills to allentrants to the labour force will have to be fulfilledby initiatives that (i) increase the demand fortraining; and (ii) increase the capacity for training.Thus, the process of reform will address both thefactors that influence demand for vocational trainingand the factors that influence supply. So far, themain thrust of Government policies has been onaugmenting the supply capacity. Since the factorsthat restrain the demand did not receive adequateattention, greater returns are expected, in the nearfuture, from the initiatives that increase the demandfor vocational training.

Demand For Vocational Training

3.5.10 The demand for vocational training comesfrom the returns to the trainee in the form of a joband better income and returns to the employer byway of a higher output from a trained worker. If theincome expectations of workers exceed the output

realised by the employer, the demand for trainingcannot be sustained, let alone be increased. Hence,the quality of training should be of a standard thatthe employer expects. On the other hand, if theexpectation from training is to get a job in theGovernment or public sector, which are notexpanding much, no useful purpose will be servedby acquiring such training.

Improving Linkage Of Training With ProspectiveEmployment

3.5.11 Employment prospects of trainedmanpower can increase if the employer has asay in imparting training. In the Ninth Plan,industry-institute interaction was initiated inIndustrial Training Institutes (ITIs), wherebyInstitute Management Committees (IMC) wereset up under the leadership of a local employer/industrialist. However, the IMC has been set uponly at 33 ITIs. There has been no such effortoutside the labour sector. In the Tenth Plan, StateGovernments will be encouraged to coverpractically all the training institutes by the IMCmode of management.

3.5.12 Industries/employers which require trainingfor new recruits will get priority in allotment of seatsin training institutes.

3.5.13 Though the bulk of the employmentopportunities arise in the small establishments,these enterprises do not have an adequate role inthe formulation of a policy for training and itsimplementation. Such involvement can bemeaningful only at the local level rather than at thestate or national level. The formulation of a trainingpolicy in Tenth Plan will give priority to the needs oflocal small employers.

3.5.14 Apprenticeships in establishments lead tobetter job prospects than the training based in theinstitute classroom. The Apprenticeship TrainingScheme under the Apprentices Act, 1961 hasremained confined to large establishments,especially those in the public sector. Smallemployers have not been a significant part of thescheme. In the Tenth Plan, the ApprenticeshipTraining Scheme will be modified keeping the smallemployers in mind. Payment of stipend should not


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be made mandatory for small employers.Absorptionof apprentice trainees by the establishment to whichthey are attached should be voluntary.

3.5.15 There is a social divide between those whoopt for vocational training after completing schooland those who enter the higher technical/professional/medical education stream. In the entryrequirements for higher applied education,vocational training and even vocational experienceshould be considered as fulfillment of some part ofthe requirement of basic education. Entry criteriato higher-level institutions should give higher priorityto those coming out of vocational trainingestablishments over those who join after basic andgeneral education in schools. Thus, the higherapplied education streams should be verticallyintegrated with the training institutes that providetraining in industrial trades, medical diagnostics,commercial practice, tailoring, cooking, travelservices, accounting, financial services, insuranceservices etc. This requires closer interactionbetween the authorities that regulate higher appliededucation and those regulating vocational trainingand related applied courses.

Capacity For Training

3.5.16 A massive expansion of training capacityis required if all the entrants to labour force are toacquire some vocational skills. New methods toenable skill building have to be created. Moreresources are needed and this requires new meansto mobilise resources. The informal sector mustreceive special attention since it absorbs a largepart of the labour force and enables the bulk of thenew entrants to labour force to acquire workingskills.

Skill Building And The Informal Sector

3.5.17 Training activity for entrants to organisedsector has always received a highly preferentialtreatment in contrast to those working in theunorganised sector. This trend has only gotaccentuated in the recent phase of economicreforms. This is reflected in the exorbitant capitationfees for medical education and the high fees inprivate establishments for newly emerging areasof employment like information technology –(IT) and

IT-enabled services, engineering, hotel andcatering, etc. The problem had already gotcompounded even before reforms, because theformal training certificates became a screeningmechanism for recruitment to the public sector/Government. Within the human resourcedevelopment activity, literacy and general educationalways received greater attention from Central andState Governments than vocational training. Inshort, a policy is needed for skill building for thebulk of the new entrants to labour force foremployment in the unorganised and the informalsector.

3.5.18 A strategy for skill building in the informalsector will be framed in the Tenth Plan. Theelements of this strategy are:

l Government to articulate a policyframework for support of informal sectortraining.

l Use all available methods to increaseliteracy standards and production skills ofpersons in the informal sector.

l Certification system to declare competencyin vocational skills acquired at work.

l Detailed surveys on training needs andexisting arrangements for training ininformal sector.

l Motivate associations in the informalsector to help develop skills andentrepreneurship.

l International agencies (such as theInternational Labour Organisation (ILO),United Nations International Children’sEmergency Fund (UNICEF) and WorldBank) to act in collaboration with theGovernment at grass root level foradministration and distribution of aid toinformal sector.

l Opening training-cum-production centresin informal sector to enable individuals toearn while they learn e.g., handicraftssector.


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l Common identity cards by local bodies andpolice to those working in the informalsector clearly specifying the places whereinformal sector activity is not wanted.

l Refinancing for urban micro-credit thatcreates training facilities for this sector toopen up entrepreneurship in this area.

l Private sector companies to be enabled tocreate foundations to finance community-based programmes which include trainingand business support to micro-enterprises,coupled with tax and credit incentives.

l Identify organisations through which actionprogrammes can be developed – trade-based guilds, trade unions (including thesmaller ones) and self-help groups.

l In the construction sector, the Building andOther Construction Workers Welfare CessAct, 1996 enables generation of funds forthe welfare of construction workers. A partof this can be utilised for financing thetraining of informal sector constructionworkers.

l Open learning systems for vocational skills.

Attracting Investment Into Skill BuildingActivities

3.5.19 Vocational skill building needs to bedeveloped as an entrepreneurial activity in whichthe private sector would be willing to invest. Incometax incentives are available to higher technical andmedical education establishments. Theseestablishments can also draw resources from themarket because of higher returns on sucheducation. Vocational skill building establishmentsneed more income tax incentives than highereducation establishments.

3.5.20 A skill development fund is envisaged toinstitutionalise the management, collectionmechanism, contributions, and utilisation of funds.The resources collected should be utilised forcreating training infrastructure in the area wherethey are collected. The purpose is to attract

resources from the beneficiaries of training includingthe employers, the employees in the organisedsector and the trade unions. Income tax incentivesfor these contributions could be considered.

3.5.21 Under Section 37(1) of the Income Tax Act,tax benefits for providing apprenticeship training isavailable to employers employing 500 or moreworkers. This benefit should be available to allestablishments registered under the Factories Act,1948, Shops and Commercial Establishments Act,(Central & State Acts), or any other relevant Actthat enables setting up of institutions.

3.5.22 Equipment donated to vocational traininginstitutes should be exempted from customs duties.

3.5.23 In urban areas, schools and highertechnical/professional/medical institutions get landat special rates. These institutions have a muchhigher income potential than the vocational traininginstitutions, and, therefore, it is the latter that needssupport and concessions in the allotment of plotsand other civic infrastructure. This should be doneespecially in small and medium towns where thebulk of the new entrants to the labour force is locatedor can have easier access than the metropolitantowns.

Training Services Provided By Governments atCentre and States

3.5.24 Much of the present capacity for trainingis provided by institutions financed by the Centraland State Governments. Most of the ITIs in the Statesector, and the Central Government institutes areorganised as subordinate offices of the respectivegovernments. Examples of this are theestablishments in sectors such as labour, technicaleducation, health, small industry, agro and ruralindustries, and agriculture. In contrast, similarestablishments under other departments like theMinistry of Information Technology are organisedas autonomous bodies. Administering theseestablishments through the normal governmentalprocedures greatly reduces the operational flexibilitywhich a specialised institution needs. Suchinstitutional structures also preclude the possibilityof raising any resources from the trainees forfinancing at least a part of the cost. Thus, the


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discipline of a consumer-server relationship thataccrues from claims against payments made is noteasily possible in the existing departmental set upof the services rendered. These training and trainingrelated establishments should therefore berestructured as ‘autonomous bodies’. Autonomousbodies publish their accounts and a review of theirperformance and place them before the relevantlegislature. This is more transparent than theoperation of an attached office of government whosedetails of operations and accounts get absorbed inthe voluminous accounts of the main ministry/department.

3.5.25 Under the departmental mode, all therevenue expenditure for salaries, raw materials, andmaintenance of equipment is financed by thegovernment budget directly to the trainingestablishment. Sometimes, even the expensesrelated to travel and daily allowances are fundedby Government through the training establishment.Thus the department that owns the establishmentfinances not only the production of the trainingservices but also the consumption of servicesproduced by it. There is little or no exchange ofservices taking place and the trainees are facedwith a ‘take it or leave it’ situation. While vocationaltraining definitely serves a social purpose, thetrainees should be allowed a choice of institutes.Therefore, rather than funding the revenueexpenditure to the institute, the trainees can beprovided stipends through the local bodies, and theycan choose among the approved institutes, whichcan either be Government establishments,Government-funded autonomous bodies,Government-aided institutes or privateestablishments. The performance of a trainingestablishment will be reflected in the number oftrainees attending it.

3.5.26 As a first step in the restructuring of ITIs,Central assistance for developing 100 State-run ITIsas institutes of excellence during the Tenth Planwill be extended to ITIs that are registered as anautonomous body and have a formal tie up withindustry.

3.5.27 In addition, financial aid given by StateGovernments to local bodies to introduce schemes

for payment of stipend to vocational trainees forattending approved institutes will also be looked into.This will not have a burdensome impact on thebudget because the funds given directly to traininginstitutes for revenue expenditure will be reducedby a corresponding amount.

District-Specific Policies And Programmes forVocational Training And Skill Development

3.5.28 The present system of governance ofvocational training is nearly four decades old(Box 3.5.1). The policy is framed at national leveland the establishments that implement the policyare mainly at the state level. A national forum isuseful for laying down guidelines but thetransaction of business (for example, design ofcurriculum, recognition of institutes, conduct ofexaminations, award of certificates, etc.) has tobe delegated to the field level or to autonomousprofessional bodies. The National VocationalTraining System (NVTS) is in contrast toeducation sector where the administrativeresponsibil i ty is delegated to the StateGovernments and State Governments are in theprocess of delegating the responsibility for theadministration of junior schools to panchayatsand local bodies.. In the vocational training field,however, only a few states have ‘State Councilsfor Vocational Training’ that are active and thereare no state-level organisations in fields oftraining not covered by the NVTS. Hence, mostState Governments rely on the CentralGovernment for operational decisionsconcerning their vocational training institutes.

3.5.29 In matters pertaining to vocational training,even the state-level arrangement cannot besensitive to local needs. This is because vocationaltraining has enormous linkages. It is concerned withthe local employing establishments, the servicesneeded by the local households, magnitude of newentrants to local labour force, the traditional skillsavailable with local population, out-turn from localschools at Class VIII and Class X level, and theexpectations of the local youth. Such inter-disciplinary linkages can be established better atthe district or block level, rather than at the nationallevel.


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Box 3.5.1Evolution of vocational training system in the labour and employment sector

The Second and the Third Five-Year Plans, which were designed to create a strong industrialbase, emphasised the need for expansion of training facilities. Vocational training in Institutesbecame the principal means of turning out skilled workers. However, even with such expansion asthe Government could undertake traditional methods of imparting training had to be continued formany sectors of the economy.

Based on the recommendation of ‘Training and Employment Service Committee’ (Shiva RaoCommittee), the administration of Industrial Training Institutes (ITIs) was transferred to the respectiveState Governments from 1 November 1956, with the Directorate General of Employment and Training(DGE&T) at the Centre retaining the functions of coordinating craftsmen training and laying downtraining policies. Recognising the need for expansion and improvement in the training centres, theCommittee recommended that the Central and State governments should share the expenditure inthe ratio of 60:40. The sharing of the cost of administration of training institutions continued tillMarch 1969 and thereafter was entrusted to the State Governments.

Starting from 54 in 1953, the number ITIs has now gone up to 4,274 with the seating capacityprogressively increasing from 10,000 to 6,28,000 over the same period. Out of 4,274 ITIs, 1,654are in government sector and the remaining 2,620 in the private sector. The Craftsmen TrainingScheme was complemented by introducing the Apprenticeship Training Scheme with the enactmentof Apprentices Act, 1961. Each State Government has a Directorate of Technical Training or aDirectorate of Employment & Training which is responsible for the implementation of trainingprogrammes run by the ITI, and for implementation of the provision of Apprentices Act in respectof State Government and private establishments.

The Apprentices Act essentially serves a dual purpose. – One, to regulate the programme of trainingapprentices in industry so as to conform to the syllabi, period of training, etc. prescribed by theCentral Apprenticeship Council, and secondly, to utilise fully the facilities available in industry forimparting practical training to meet the requirement for skilled workers. As on 31 March 2001, thenumber of seats in over 17800 public/private sector establishments covered under the Act, were2,20,000, out of which 1,58,000 seats were utilised. Many occupations in the emerging high-techareas, services sector and informal sector are outside the scope of the present system ofApprenticeship Training.

Although the Craftsmen Training Scheme and the Apprenticeship Training Scheme are the twoimportant schemes, the DGET runs several other schemes like Craft Instructors Training Scheme,Advanced Vocational Training, Supervisory Training Scheme, Women Training Scheme, ExecutiveTraining, Research and Development in Vocational Training, Development of Instructional Materialetc. Most of them are in the form of support to the core schemes (Craftsmen Training Scheme andApprenticeship Training Scheme) or in the form of continuing education/ training to the alreadyemployed people.

Source: Report of Working Group on Skill Building for Tenth Plan


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3.5.30 Besides the labour sector of Plan,vocational training facilities exist in many othersectors (Box 3.5.2). Most of these are national levelefforts, and individually they are able to reach a verysmall part of the new entrants to the labour force.Each authority in charge of subject sets up trainingestablishments in its field of specialisation. Thetarget audience at the local level is the same set ofhouseholds. The attempt to meet training needsthrough multiple authorities – labour, handlooms,handicrafts, small industry, education, health,women & child development, social welfare, tourism,etc. — does lead to redundancy at some locations.The local-level small industry establishments in theunorganised and the informal sector, and the locallabour force do not derive benefits commensuratewith the expenditure incurred by the Government.Sometimes, the locations where the labour forcehas a high density of tiny establishments may notget reasonable attention from any of the traininginstitutions set up by the Government. While eachof the training initiatives has a definite area ofspecialisation, there is need for coordinationamongst these and with the vocational trainingsystem at the district level, because the targetbeneficiaries are the same.

3.5.31 Information on the occupation profile of thelabour force, wages, gap between skills required

and available, the available and needed trainingfacilities at district or block level is needed forframing training programmes sensitive to localneeds. The nature of policy support required fromthe Government varies with the social and economicconditions in a district or block. This covers liaisonwith industry, role of local industry/market/trade/selfemployed persons associations in guiding trainingand providing employment to trainees; role ofassociations/unions of workers; involvement orotherwise of NGOs; direct financial support totrainees versus incentives to the trainingestablishment; institute-based versus industry-based apprenticeship training; provision of capitalequipment or technology to training establishments;restructuring of existing institutes versusestablishment of new institutes; inter-sectorallinkage among the developmental wings ofgovernments; nature of interface with localeducation and labour administration; and relativeroles for panchayat/district administration/localgovernment/State Governments/ Central Govern-ment at a location.

3.5.32 In the Tenth Plan a district-level vocationaltraining system will be evolved. A special group willbe set up to suggest the modalities of designingand implementing a district-based vocationaltraining system.

Box 3.5.2 Vocational Training activities in sectors other than labour and employment

Development head Training activityHuman Resource Development Vocational EducationHuman Resource Development Community PolytechnicsKhadi and Village Industries Commission - Khadi (cotton, silk and wool)

- Village industries including polyvastra- Entrepreneurship Development Programme

Small Scale Industry - Entrepreneurship- Skill Development- Management Development

Textiles Handloom WeaversCAPART NGOsHealth and Family Welfare Health & Para-MedicalConstruction Construction WorkersUrban Employment and Poverty Alleviation Self-employmentApparel Export Promotion Council Cutting, tailoring and fashion designInformal Training Sector Competency Based CertificationTourism Hotel ManagementSource: Report of Working Group on Skill Building for Tenth Plan


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Training Of Youth in Rural Areas

3.5.33 With the diversification of agriculture andfresh opportunities in the rural non-farm sector, anumber of new possibilities are emerging foremployment in rural areas with better income. Besidesthe State Governments rural ITIs, the lead agenciesof the Central Government are the Council for theAdvancement for People’s Action and RuralTechnology (CAPART), Khadi and Village IndustriesCommission (KVIC), and the Community Polytechnicsunder the Ministry of Human Resource Development.The envisaged district-level vocational training systemwill be useful in developing programmes relevant forlocal rural needs.

3.5.34 The programme run by KVIC and CAPARTimpart skills as a part of the effort at establishingnew production units and projects. Entrepreneurshipdevelopment, besides training in production skills,is a part of the programme of these twoorganisations. These will be strengthened furtherin the Tenth Plan.

Training of Women

3.5.35 Certain occupations are preferred more bywomen. Training in such trades is included underthe NVTS. State Governments have set up specialwomen wings in ITIs and the Central Governmenthas set up Regional Vocational Training Institutesfor women. Handlooms, handicrafts, and weaverdevelopment programmes provide trainingopportunities for women, along with the men. Thewomen and child development sector includesdevelopment of self-help groups of women andtraining programmes. There are special needs forvocational training for women, given the low femaleparticipation in the labour force, greater proportionof women in jobs which are of a seasonal or short-term nature and the phenomenon of womenresuming work after mid career breaks in theorganised sector. Since setting up two parallelstreams of training institutes for women and menwill be too expensive, vocational training of womenin existing institutes can be directly supported bypaying stipends to women candidates and bysupporting capital expenditure by institutes forspecific trades. The women component of the Planwill also be used for getting a better share for womenin the sector wise training initiatives.

Regions Requiring Particular Attention

3.5.36 The incidence of unemployment amongthe educated is higher in the northeast and inJammu and Kashmir. The economic activities inthese two regions are different from those in otherparts of the country. A centrally sponsored schemefor doubling the capacity of ITIs in the northeast isbeing implemented. A similar scheme for Jammuand Kashmir is also envisaged.

Occupational Safety and Heath of Workers

3.5.37 Ensuring a reasonable quality ofemployment requires safeguarding of workersagainst risk and the occupational hazards. In asituation of labour surplus, the workers take upwhatever work is available and are often exposedto risks. There is a plethora of laws that seek tosafeguard the safety and health of workers (Box3.5.3). However, in practice, it is very difficult toenforce their compliance. The result is that the bulkof the workforce does not get a reasonable level ofprotection. Such tendencies get accentuated whenmarket forces motivate the minimisation of the costof labour input. Compliance with safety measuresis confined to units in the organised sector.

3.5.38 Central Government establishmentsdealing with occupational safety and healthprovide mainly advisory and training services,except in the case of mines and ports and dockswhere enforcement is also with CentralGovernment establishments like the DirectorGeneral of Mines Safety (DGMS) and the DirectorGeneral Factory Advisory Services and LabourInstitutes (DGFASLI). Outside the labour sector,National Safety Council (NSC), located atMumbai, sponsored by insurance companies andoperating as a self-financing autonomousinstitution, conducts educational, training,promotional and consultancy services.

3.5.39 Typical industries, which are not coveredby effective safety measures commensurate withthe degree of exposure to risk, are:

o Agricultural workerso Small mineso Truck/buses operators


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o Hotelso Eating placesoo Machinery repair establishmentso Beedi & cigar makingo tiny/small unitso Building constructiono Brick kilnso Carpet manufacturingo Fire workso Power loomso Home-based workers

3.5.40 To reach a majority of the workers, thefocus has to be on the agriculture sector and onsmall establishments.

Agricultural Operations

3.5.41 There is a higher risk in agriculturaloccupations but it is difficult to administer safetyregulations in this sector. Hence voluntary safetycampaigns through agricultural universities andstate agriculture departments are needed.Awareness campaigns to demonstrate the degreeof risk and educate people about preventivemeasures should be conducted on television andradio.

3.5.42 The Dangerous Machines Act, 1983,should be supplemented by positive efforts. Designsof agricultural equipment that are safe and thosethat are risk-prone should be displayed in the safetyawareness campaigns.

Box 3.5.3Statutes on occupational safety and health of workers – multiplicity of enforcement agencies

Activity Authority for enforcement

Agricultural machinery Dangerous Machines Act, 1983

Insecticides sale, transport, distribution Insecticides Rules, 1981

Pesticides manufacture, packaging, distribution, Central Insecticides Board, Ministry of Agriculturehandling and use

Beedi workers DG (Labour Welfare),Labour Ministry (Empoweredunder Beedi & Cigar Workers (Conditions ofEmployment) Act,1966)

Factories State Government - Chief Inspector of Factories(Empowered by Factories Act, 1948)

Boilers State Government - Inspector of Boilers -(Empowered by Boilers Safety Act, 1923)

Shops and establishments Labour Commissioner, (Empowered by the Shopsand Establishments Acts of respective StateGovernments)

Construction workers Labour Commissioner, (Empowered by Building andConstruction Workers ( Regulation of Employment& Conditions of Service) Act, 1996)

Docks Central Government - DG(FASLI)

Mines Central Government - DG(MS) (Mines Act, 1952)

Gas cylinder rules Explosives rules Chief Controller of Explosives under the IndianPressure vessels rules Explosives Act, 1884.


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Small Establishments

3.5.43 Clusters of small establishments have tobe reached. Increase in worker productivity,reduction in worker fatigue, and curbing of diseaseneeds to be established through safety audits andareas with a high density of poor workers and wherework is done under extremely tiring physicalconditions should be selected for this. A recent studyby International Labour Organisation (ILO) (2000-01) at Moradabad in Uttar Pradesh showed that onlysmall investments in brass foundry chimney yieldedsubstantial benefits. Improvements in designs ofequipment were made after a study by technicalconsultants. To create a demonstration effect, suchinitiatives will be supported through the Plan.Awareness campaigns to disseminate successstories will also be supported.

3.5.44 The involvement of the insurance industryin promoting safety of workers in smallestablishments should be encouraged. Groupinsurance to share the risks of establishment ownersshould be promoted by the labour administration.

3.5.45 A simple safety code for smallestablishments — whether factories, shops,establishments, building construction sites, roadtransport etc. — should be devised. This can befollowed by umbrella legislation on occupationalsafety and health.

3.5.46 Safety as a profession should bedeveloped on the same lines as accounting practice,cost accounting, company law compliance, assetvaluation, insurance risk assessors, loss surveyors,etc.

3.5.47 Establishments should be encouraged tohave safety audit carried out. The practice of self-certification based on adequate expertise shouldbe encouraged. The NSC should establish itsbranches at the district level.

REVIEW OF LABOUR LAWS

3.5.48 The employer-employee relationshipcannot be left to be determined entirely in the

market place based on a voluntary contractbetween the employer and employee becauseworkers are not commodities and individualworkers are the weaker party in any employer-employee relationship. Hence, legislations aimedat protecting the rights of labour are needed in anumber of areas, e.g., to form unions for thepurpose of collective bargaining, laying downminimum obligations which employers must meetwith regard to social benefits, health and safetyof workers, provision of special facilities forwomen workers, establishing grievance redressalmechanisms, etc.

3.5.49 The primary purpose of labour laws is tofoster the growth of the employer-employeeacknowledged relationship, in lieu of relationshipsbased on voluntary contracts. Thus labour lawsshould enable the creation of jobs based on thisacknowledged relationship.

3.5.50 In the new economic scenario, the needfor changes in labour laws has been emphasised.A fresh look at the structure of labour laws is,therefore, envisaged in the Tenth Plan. However,this task is to be seen in the perspective of thestructure of the labour market.

3.5.51 Labour laws are relevant for the wageemployed, and not the self-employed. Out of thetotal estimated number of workers, 47.1 per centare wage employed (Table 3.5.4). Among these,25.3 per cent are in the agriculture sector wherelabour laws do not generally apply, 11.7 per centare in the services sector and 10.2 per cent inmanufacturing, mining and electricity, gas & watersupply. A good part of services is the employmentin government establishments where theindustrial labour laws do not apply. Among thewage employed, the labour laws apply to thosehired on a regular salaried basis. Only about one-third of the wage employed are hired on a regularsalaried basis.

3.5.52 Of the 83 million workers covered by theEconomic Census, 51.9 per cent are hiredworkers (Table 3.5.5).


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3.5.53 Thus the present structure of the labourmarket is such that the labour laws apply to a smallpart of the labour force. Hence, any immediateimpact of changes in labour laws will be rather small.At the same time, the long-term objective is toincrease the number of jobs, and, therefore, thegoal is to substantially increase the present smallshare of employment that is based on some simpleform of employer-employee contract.

3.5.54 The Government has already announcedits intention to review some of the labour laws.Subsequently the Report of Second NationalCommission on Labour has suggested restructuringof labour laws. The Report is being examined bythe Government.

3.5.55 The restructuring of labour laws must bearin mind that small establishments employing lessthan 20 persons account for more than 60 per centemployment.

Small Establishments and Labour Laws

3.5.56 Labour laws are drafted uniformly for allenterprises and some exemption is provided underthe common laws for smaller establishments. Thereis need to draft one single labour legislationapplicable to all establishments employing less than20 persons. Such legislation will provide for safetyand social security of workers. Business linkagesbetween large and small enterprises should befostered and be utilised voluntarily by the large

Table 3.5.4Structure of employment by industry and category of employment

Per cent

Self Employed Wage Employed All Workers

Agriculture 34.5 25.3 59.8

Non-Agriculture :

Manufacturing, mining, electricity etc. 7.3 10.2 17.5

Services sectors 11.1 11.7 22.9

All Activities 52.9 47.1 100.0

Table 3.5.5Share of hired workers in all workers in enterprises covered by the Economic Census1

Per cent

Workers employed in Agricultural Non agricultural All enterprisesenterprises enterprises

Enterprises not hiring any worker 6.4 32.3 38.7

Establishments hiring workers 1.7 59.6 61.3

(share of hired workers in establishments) (1.1) (50.9) (51.9)

All workers 8.1 91.9 100.0

Number of Workers (million ) 83.30a

1 Economic Census 1998.a Economic Census covers enterprises in selected agricultural activities. These are livestock production and agriculturalservices including hunting, tracking and game production, forestry, logging and fishing. Crop production and plantations are not covered. All non-agricultural entrepreneurial activities are included. Activities purely for self-consumption are excluded.


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enterprise to deliver social security benefits tolabour in the small enterprises

3.5.57 One of the reasons for rigidity in labour lawsis that the ‘employer’ is expected to provide,individually, for security of employment (i.e.,guarding against risks of loss of job, family sickness),retirement benefits and bear the costs of accidentsand other occupation-related risk compensation.This happens because the labour market institutions,which are designed to provide social security to theworkers, have a narrow reach, are almost exclusivelyadministered by the Central Government, providesecurity at a high cost, are highly specific to individualemployers and lack the concepts of ‘shared risk’.Therefore, a more innovative and broad-based socialsecurity system for workers is needed to smoothenthe process of labour reforms and enablerationalisation of labour laws.

Need For Making Changes in Certain Laws

3.5.58 The changes proposed in the IndustrialDisputes Act, 1947 are meant to provide moreflexibility in the hiring and firing of labour in order toincrease productivity, efficiency and allow a moreflexible adjustment process in the changing demandmarket. These proposals are being examined bythe Government.

3.5.59 The repeal of the Contract Labour Act, 1947will help provide more flexibility in recruiting labourwithout putting a long-term financial commitment onthe employer. This, in turn, will encourage morerecruitment. However, care should be taken to ensurethat, in this process, more casualisation of labour doesnot take place. Already, the growth of casual labourin the 1990s is very high. A proper social securitymeasure and a regulatory body to oversee the functionof the recruiting agencies should accompany anychange in the Act to safeguard the minimum qualityof the job provided.

Placement agencies, which are utilised for hiringcontract labour, should be registered. A forum tomonitor placement agencies against exploitation oflabour should be established. The principalemployer should deliver unemployment benefits andpension to contract labour through placementagencies.

3.5.60 The small-scale industry (SSI) sectorplays an important role in economic developmentand contributes significantly to industrial output,employment, and export. However, the sector isburdened with maintenance of an unmanageablenumber of forms and registers under differentlabour laws. The approach during the Tenth Planwould be to exempt it from the rigour of thevarious labour laws and make it vibrant andefficient. Efforts will, therefore, be made toconduct proper orientation and trainingprogrammes for the officers of the labour lawenforcement machinery and create a positiveclimate for growth in this sector.

3.5.61 The enforcement of various labour lawspertaining to SSI units falls under the jurisdiction ofthe State Governments. The entire onus ofcompliance in furnishing the returns and inspectionsfalls on the entrepreneur. Most entrepreneurscannot afford to engage a person exclusively forthis purpose. Therefore, the present system maybe replaced by a system of self-certification whereinthe return submitted on various labour laws by SSIunits may be treated as prima facie compliance.Alternatively, a system of random inspection of acertain percentage of units on annual basis withwell-defined criteria may be introduced.

3.5.62 The fact that labour laws are in theConcurrent List and are being implemented bothby the Centre and the State Governments createsmore complications. Various State Governmentsare demanding authorisation to carry outamendments in labour laws according to specificrequirements. Since the State Governments are inthe best position to enforce labour laws, in keepingwith the prevailing socio-economic conditions in theirstates, the approach in the Tenth Plan would be toauthorise them to amend labour laws as per theirrequirements.

3.5.63 In view of the increasing number ofindustrial disputes, industrial tribunals or labourcourts are overburdened, affecting the speedyresolution of these disputes. Therefore, theapproach in the Tenth Plan would be to set up LokAdalats wherever necessary. In addition, theconcept of social dialogue would be introduced


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where all concerned parties can participate to workout an amicable solution to major problems/issuesin labour market reforms.

Framework Of Procedures, AdministrationAnd Related Services Concerning LabourRegulations

l As labour laws are in the Concurrent List,the State Governments may be permittedto make amendments as per theirrequirement.

l While carrying out amendments, the needfor an adequate social safety net for theworkers may be kept in mind.

l Formulation of schemes for pension andunemployment benefit for the unorganisedsector workers may be considered,depending upon the availability ofresources.

l To avoid disproportionate regulatoryburden on small-scale units, the presentsystem of maintenance of various formsand registers under different labour lawsmay be replaced by a system of self-certification and treated as prima-faciecompliance.

l Inspection under the labour laws in SSIunits may be conducted only on the basisof complaints by affected persons likeworkers, neighbours etc., or whenabsolutely essential in the interest of safetyof workers in industry.

l Routine and periodic inspections ofinformation technology establishmentsmay not be necessary.

l Special quasi-judicial tribunals manned byofficers of the labour department may takeup hearing of disputes in case conciliationtalks fails.

l Health, safety and welfare of the workersmay be given due importance whilereviewing the labour laws.

SOCIAL SECURITY OF WORKERS

3.5.64 Out of about 400 million workers in thecountry, only around 50 to 60 million are covered bysome form of social security. For the rest, a job is thebest guarantee for social security right now. However,the labour market is moving in a direction that change-over of jobs by an individual will become more frequent,public sector which provides a comprehensive socialsecurity cover to its employees, is shrinking in size,the pension system for government employees isunder review, and more workers are seeking work inrural and urban informal sector, as the ability ofagriculture to absorb workers diminishes. In otherwords, the job related uncertainty would increase.Since any social security system stabilises over aperiod of 20 to 30 years, the efforts to be made in theTenth Plan should have a long-term perspective.

3.5.65 A budget-funded social security systemsimilar to that available in developed countries is notfeasible for India at present. Even in the present smallbase of coverage, a number of models to raiseresources for social security are in use (Box 3.5.4).

3.5.66 The annual resource flows in respect of afew selected schemes is of the order of Rs. 28,000crore (Table 3.5.6). A more comprehensive listingof schemes will increase this. Thus, the economyis able to generate a sizeable volume of funds forsocial security even at present, though it may besmall compared to the number of workers.Secondly, these funds are mobilised under somestructured arrangements, which are specific to thecategory of workers covered. Therefore,newsources will have to be explored to cover additionalcategory of workers.

Box 3.5.4Alternative models presently used forfunding of Social Security of workers

o Central Budget Funded – Plano Central Budget Funded– Non Plano State Budget Funded – Non Plano State Budget – Plano State Government Sponsored Insurance

(Employer & Employee)o Commodity Cess funded Welfare Fundso Insurance Schemeso Workers’ Fundedo Self financed pension schemes


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3.5.70 Awareness generation campaigns anddissemination of information to unorganised workerswould be strengthened. To improve the efficiencyof the delivery mechanism of existing programmesfor workers in the unorganised sector, localinstitutions like panchayati raj institutions (PRIs) andurban local bodies would be involved in monitoringthe social security programmes.

3.5.71 Considering the size of the country’sworkforce, a policy framework, at the national level,on social security provisions for different groups ofworkers and employees will be formulated.

3.5.72 The following approach will be pursued:

Minimum Wages

l The Minimum Wages Act, 1948 may beamended enhancing the penalty forviolations.

l A national policy on minimum wages maybe evolved to help deal with the problemof inter-state variations in minimum wages.Presently, there are significant variationseven in wages for the same occupations.

3.5.67 The social security presently in use canbe grouped under two categories organised sectorand the unorganised sector. Though the organisedsector social security system caters to a very smallpart of labour force, it has certain inefficiencies andweaknesses that need to be removed.

3.5.68 A legislative and administrative frameworkhas to be created for significant coverage of theunorganised sector by social security cover. Thestrategy would be to motivate and encourage theState Governments to formulate and implementschemes and programmes targeted at certainoccupational groups in the unorganised sectorwithout putting any additional pressure on thebudget.

3.5.69 To extend the coverage of social securitymeasures for the unorganised sector workers,setting up of the cooperatives, self-help groups,mutual benefit associations managed and financedby the occupational groups/workers and voluntaryhealth insurance and pension schemes would beencouraged. Also, attention would be focussed onalternative income generating activities with theprovision of credit arrangement for the supply ofraw materials, etc.

Table 3.5.6Resource flows In economy for social security – selected schemes

Scheme/ Institution Rs. Crore/ year

1. EPFO 10,700

2. ESIC 1,500

3. EPFO Pension Scheme 600

4. LIC – Jeevan Suraksha 600

5. Cess-based Central Welfare Funds 100

6. State Government Welfare Funds 100

7. SGRY 10,000

8. NSAP 600

9. Agricultural Workers- Central scheme 20

10. Handloom Weavers – Thrift, Health & Group Insurance Schemes 5

11. Central Government Employees Pension 4,000

12. State Government t Employees Pension NA

Total (1-12) 28,225


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l The enforcement machinery for minimumwages in the Central and the StateGovernments may be strengthened withinvolvement of NGOs, and PRIs.

l To prevent exploitation of workers in theunorganised sector, awareness generationmay be stepped up in collaboration withvoluntary organisations, trade unions andother committed individuals. The CentralBoard for Workers Education can beentrusted with the task of awarenessgeneration.

A Role For EPFO And ESIC

l The delivery of services in social securitythrough the Employees Provident FundOrganisation (EPFO) and the EmployeesState Insurance Scheme (ESIS) may beimproved with the help of IT.

l Priority attention may be given to thosesocial security covers for the unorganisedsector, which can provide medical care,accident benefits, old age pension andmaternity benefit.

l Provident fund schemes and EmployeesState Insurance schemes may beextended to the workers in the unorganisedsector through innovative approaches.Innovative schemes may be launched onexperimental basis targeting groups likerickshaw puller, auto rickshaw driver, headloader, etc.

Convergence Among Multiple Worker WelfareSchemes

l Emphasis may be given to theconvergence of services for various socialsecurity measures undertaken by differentministries/departments.

l Community-based and location-specificsocial security measures may beencouraged through self-help groups,voluntary organisations, PRIs etc.

Central Funds for Welfare of Workers

l Based on the experience of the existingwelfare funds for beedi, mine and cineindustry workers, efforts may be made toconstitute similar welfare funds for fishprocessing, salt workers, etc.

State Level Worker Welfare Funds

l State Governments may be encouragedto formulate and implement social securityschemes for the unorganised sector as pertheir requirements with minimum burdenon their budget.

l Concerted efforts may be made toenhance the coverage under the NationalSocial Assistance Programmes (NSAP) forproviding old age pension, maternity andother benefits to workers in theunorganised sector.

3.5.73 While an outline of possible initiatives isgiven here, a special group will prepare aperspective plan for social security for all workers.It would study the effectiveness of alternativemodels of providing social security to workers. Thespecial group will examine the problems faced byother countries in implementing social securitysystems and their solutions.

Pension System for Unorganised Sector:

3.5.74 The present pension system is confinedto organised sector, which covers less than a tenthof the labour force employed. And even in theorganised sector, there is no mechanism togenerate earmarked resources for pensionpayments. Employers, who are mainly governmentand public sector, have severe financial limitations.And the organised sector pension systems,including those for the private corporate sectorestablishments, are designed for a single life-longemployer-employee relationship. These featurescurtail the possibility of any significant expansionof coverage of workers by the pension system.

3.5.75 In the unorganised sector, there are a largenumber of self-employed persons with a reasonable


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level of income, but do not have a mechanism forearning a risk-free and reasonable return on theirsavings for retirement. And the low-income groupshave no credible institution, where they can saveduring their active working life and earn an assuredreturn for income support during retirement.Moreover, there is no prospect of a single employer-employee relationship in the unorganised sector,whether for the self-employed or for the wageemployed. The self-employed persons and the low-income wage employed frequently take recourseto informal market, where the failure rate is high. Inkeeping with the announcement in the Union Budget2001, Insurance Regulatory & DevelopmentAuthority (IRDA) is preparing a road map for apension system for the unorganised sector so thata self-sustaining pension system for unorganisedsector can be introduced.

Vulnerable Groups In Labour Force

3.5.76 The groups that need particular attentionare child labourers, bonded labourers, migrantlabour, building and construction Workers andlandless agricultural workers.

Child Labour

3.5.77 The best solution to this problem iscompulsory primary education for all children.However, till this is achieved, special measures tocurb child labour will include:

l Regular surveys to assess the number ofworking children, and placing them inspecial schools.

l Imparting vocational skills to all childrenbefore they attain the age of 14, in schoolsset up under the National Child LabourProject.

Bonded Labour

3.5.78 The centrally sponsored scheme on therelease and rehabilitation of bonded labour willcontinue. A new element of the scheme is the surveyof bonded labour-prone locations.

3.5.79 The effectiveness of the Bonded LabourAct 1976 primarily depends upon the identificationof bonded labourers. Except specifying the functions

of the vigilance committee, there is no inherentprovision in the Act to force identification of bondedlabourer. Therefore, the institutional mechanism inthe shape of a vigilance committee would improveconsiderably if these bodies were broad based.Accordingly, it would be appropriate to induct somevolunteers, including representatives from tradeunion organisations and local NGOs, as co-optedmembers in these committees. All vigilancecommittees should be reconstituted once in twoyears to ensure their proper functioning.

Migrant Labour

3.5.80 The Inter-state Migrant Workmen(Regulation of Employment and Conditions ofService) Act, 1979 There is a legislation to regulateinter-state flows of migrant workers through thecontractors. Key actions are required both at thedestination as well as at the point of origin ofmigration in order to reduce vulnerability andincrease the capacities of the targeted social groups.

3.5.81 Effective action requires the creation of areliable information system for labour migration, asmacro level data is often inadequate to capture theflow and pattern of migration. Apart from estimatingthe magnitude of migration, the database may covervital aspects like: causes of migration; processesof recruitment; occupational profile of migrants;working and living conditions of migrant workers;skill profile of migrants; expenditure and remittancepatterns of migrant workers; status of enforcementof legislations like the Minimum Wages Act, 1948Equal Remuneration Act 1976 etc. Initially such asurvey may be undertaken in the major lending andborrowing districts and, thereafter, in other districtsduring the Tenth Plan.

Building And Construction Workers

3.5.82 Only four states have set up welfare boardsprovided under the Building and ConstructionWorkers Welfare Cess Act, 1996 (Table 3.5.7).These welfare boards are meant to implementschemes like immediate assistance to beneficiaryin case of accident, pension at the age of 60 years,premiums for group insurance scheme for thebeneficiary and medical expenses etc. In theabsence of such an administrative mechanismprovided under the Act, resources could not becollected from construction contractors.


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3.5.83 Implementation of the Act by the StateGovernments will be pursued in the Tenth Plan. Ifnecessary, giving some incentive to StateGovernments that implement the Act may beconsidered.

Landless Agricultural Workers

3.5.84 The main effort of Plan is povertyalleviation through rural development programmes.There is a need to ensure the effectiveimplementation of the Minimum Wages Act,upgrading of skills, creation of awareness andintroduction of social security measures, withoutputting serious burden on the government budget.

3.5.85 In the absence of a consensus amongstates on the Bill for the welfare of agriculturalworkers, state-specific approaches will have to beworked out. Some State Governments haveintroduced group insurance schemes to protect theworkers against accidents and provide insurancein the case of death. Pension and other familybenefits are available only in isolated cases, as forexample, in Kerala. The number of workers to becovered is so large that the Central Governmentcannot by itself assume responsibility independentof the states.

3.5.86 The resources available with the MandiBoards need to be tapped for this purpose. Some

district-specific models for the welfare of thiscategory of workers through one-time assistancecould be explored. The problems of landlessagricultural workers merit consideration under theagriculture sector reforms that have been initiatedin the Union budget 2002-03.

THE PATH AHEAD

3.5.87 Much of the agenda for social andeconomic planning gets automatically addressed ifthe labour households get opportunities for gainfulemployment; are able to get a reasonable returnfor labour; have access to some insurance againstrisk of accident, death and against short spells ofloss of work. Mechanisms by which some savingscan be pooled, during the active working career,for an old age pension are also required.

3.5.88 The pre-requisite for improving the lot ofthe labour is the availability of gainful employmentto the entire labour force. Macro-economic policiesleading to 8 per cent GDP growth and promotion oflabour-intensive sectors should enable the creationof more jobs than the additions to labour force inthe Tenth Plan leading to a substantial reduction inthe incidence of unemployment by the end of thePlan period.

3.5.89 Labour policy (including the measurestaken for skill development and social security) has,

Table 3.5.7Implementation status of the Building and Other construction Workers Welfare Cess Act, 1996a

Building & other Construction Workers Rules framed 2 Expert committee constituted 2

Welfare Board constituted1

KERALA MADHYA PRADESH ANDHRA PRADESHASSAM WEST BENGAL MAHARASHTRA

GUJRATUTTAR PRADSHPONDICHERRYPUNJABRAJASTHANJAMMU AND KASHMIRDELHI

a As on 20.08.20011 Notification of the Welfare Board by a State Government enables implementation of schemes for providing various welfare

benefits to workers.2 Expert Committee drafts the Rules for conducting business under the Act, and approval of Rules by State Government

enables the creation of the Welfare Board.


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by and large, focused on the organised sector, whichhas a very small share in the total labour force and,in any case, provides a reasonable level of incomefor its average worker. The infrastructure for thelabour market that is presently available benefits onlyabout 8 to 10 per cent of the labour force employed.Labour policy and programme in the Tenth Plan willfocus on bulk of the labour force by taking upinitiatives for those workers who are outside theprivate corporate and the public sector, i.e., in theso-called unorganised sector.

3.5.90 It is possible to reach out to the entirelabour force through the labour market institutionsover a period of five to ten years. This requiresinnovations in the existing policies concerning thelabour market, and initiatives in a number of sectorsthat relate indirectly to work opportunities for, andincome of, labour.

3.5.91 Since the essential condition for improvingthe lot of the workers is the availability of gainfulemployment, the labour policy has to interact closelywith the economic policy that concerns growth oflabour intensive sectors, such as:

l Agricultural crop production, storage andmarketing.

l Agro forestry, medicinal plants, bamboodevelopment.

l Wasteland development and minorirrigation.

l Animal husbandry, livestock, horticulture,fisheries.

l Rural non-farm activities (ruraldevelopment).

l KVIC.

l Small industries, including the weavers, theurban informal sector.

l Construction.

l Urban infrastructure services.

l Road transport and road construction.

l Retail and distributive trade.

l IT and communication services.

l Education and vocational training services.

l Women and child development services.

3.5.92 At present, most of these economicactivities are dominated by the informal sector andthe small and medium enterprises. Economicinfrastructure to support these has to bestrengthened. Support from micro-credit institutionsand the insurance industry has to be provided tomeet the capital needs and to cover risk in suchventures. Since, the nature of the activities listedabove is not uniform, the labour policy must alsotake note of these variations.

3.5.93 To reach out to the entire labour forceemployed, many of the existing institutions, lawsand programmes have to be restructured. Thesepertain to:

o Reform of the vocational training system.

o Occupational safety and health.

o Labour regulations.

o Social security of workers.

3.5.94 Reform of the vocational training systemwill include measures to increase the demand forvocational training by linking it with the requirementsof prospective employers. Recognising the role ofthe informal sector both as a principal provider ofjobs and as a provider of on-the-job training, thevocational training policy has to specify a role forthe informal sector. Noting the variations acrosslocations in regard to employment opportunities,occupations, skill requirement, magnitude of andsocial characteristics of entrants to labour force, andtraditional skills available, a district-level system forvocational training has to be developed. The presentnational-level policies and programmes should onlylay down guidelines, leaving implementation to thedistrict-level authorities. To attract private capital intovocational training, skill building has to be developedas an entrepreneurial activity at par with technicaland professional education.

3.5.95 To ensure that the average worker iscovered by occupational safety and health


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measures, programmes will be taken up for clusterswith a high density of establishments and poorworkers. Special programmes for labour-intensivehigh-risk activities will be taken up. Safety and riskawareness media campaigns to reach out to theworkers in agriculture, small mines and roadtransport sectors will be taken up. Since the numberof small establishments is very large, all of whichcannot be supervised directly by labouradministration, occupational safety and health willbe developed as a profession. Such professionalswill supplement the efforts of labour administrationin promoting compliance with labour standards.

3.5.96 A new and simple labour law designed forsmall establishments, with the main objective ofproviding occupational safety and social security forworkers, will be taken up. Shared risk concepts (socialinsurance) for bearing the risks faced by smallestablishments workers will be developed further.

3.5.97 At present, there are a number of modelsto provide some form of social security cover tothe unorganised sector workers. A few stateshave set up welfare boards for unorganisedworkers. The EPFO and ESIC are developing

models to demonstrate the provision of socialsecurity cover to the informal sector workers atspecific locations. A role for associations ofworkers, and of the self-employed in the provisionof social security has to be explored. Given thelarge resource requirements, and the experiencein raising some resources through cess and otherlevies, the approach will be to provide socialsecurity through budget neutral measures.Provision of a comprehensive social securitycover to all workers is a gigantic task and requiresadequate preparation. A perspective plan toprovide social security cover to workers inagriculture, small establishments and in theinformal sector will be prepared.

3.5.98 The Tenth Plan will strive to ensure that,over a period of five to ten years, the labourmarket institutions for productivity improvement,safety, health and social security of workers coverthe bulk of the labour force through simplifiedprocedures.

3.5.99 The outlay under Central Plan forMinistry of Labour for the Tenth Plan is Rs. 1500Crore. The Schemewise break of the Tenth Planoutlay is given in the Appendix.


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labour welfare & social security - planning...

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