NEW DELHI: The government is developing a “Labour Welfare and Employment Index” (LWEI), which would rank states/UTs on parameters of employment, labour welfare, social security coverage, and productivity. Through the index, it aims to encourage “healthy competition” between the states, and enhance ease of doing business, official sources told FE.
The labour ministry is likely to unveil the LWEI in a few weeks, after consultations with the states, NITI Aayog, the International Labour Organisation (ILO), and other union ministries, the sources added.
An official said the index would ensure uniformity in labour laws’ implementation across states, and will have the broader objective of improving labour welfare. The plan may be announced by the finance minister Nirmala Sitharman in her Budget speech, set to be presented in the fourth week of July.
Worldwide, the Labour Rights Index is a comparative tool and an international qualification standard which allows users to compare labour legislation around the world, encompassing markets in 135 countries. The purpose of the tool is to make available all such information to workers in order to improve their working lives, say experts.
Jasmine Damkewala, senior partner at Circle of Counsels said that ranking of states on the basis of LWEI would make the states more competitive and sensitive to growing and often changing employment and labour needs. It would enable them to focus on the areas where codification is missing or lax, which would directly benefit workers and push in transparency and ease of doing business.
“For businesses, particularly those with operations in multiple states, a push by different states to achieve a common minimum, would ultimately lead to clarity in setting more uniform employment policies and benefits, across their establishments,” said Akshay Jain, partner, Saraf and Partners.
Last week, FE had reported that the coming Budget may reiterate the government’s intent to operationalise the four labour codes, passed by Parliament in 2019-2020, and lay a new road map for their implementation in phases, rather than at one go. It may also unveil a clutch of proposals for the benefit of the unorganised-sector workers.
Official sources earlier said that among the proposals being put forth by the labour ministry for the Budget are integration of the e-shram portal, a national database of the informal sector workforce, with the social security schemes run by different ministries, and extension of coverage of EPFO and ESIC benefits to more of them.
The Narendra Modi government in 2019-2020 had undertaken a plethora of facilitative reforms to reduce the multiplicity of labour laws. As many as 44 labour related acts were consolidated into four codes with the objective of reinforcing trade and investment, facilitating ease of doing business and reducing compliances, addressing the issue of decriminalisation, addressing skill development needs, and dispute resolution.
The four codes are: Code on Social Security 2020; Occupational Safety, Health and Working Conditions Code 2020; Industrial Relations Code 2020; and Code on Wages 2019. However, they are yet notified, as the government’s intent is to first align all states’ labour rules with the four codes, and then enforce them in phases.
Source: The Financial Express
