Expert Talk

Forget toxic shortcuts

01.09.17_Business Standard (Hindi)_Pg 05The Ministry of Labour is clearly more ignorant than the young boy at a job fair in Gwalior who told us: “Give me a monthly salary of Rs 4,000 in Gwalior, Rs 6,000 in Gurugram, Rs 9,000 in Delhi, and Rs 18,000 in Mumbai; my bags are packed, so tell me where you want me to go.” The proposal for national minimum wages of Rs 18,000 is like the Mahatma Gandhi National Rural Employment Guarantee Scheme – a rigged benchmark – and will murder formal sector job creation by mandating wages not linked to cost of living.

This article is on the national minimum wage which will murder formal job creation the youth needs and corrode competitive federalism. And this is an authored article by Manish Sabharwal Co-Founder and Executive Chairman and  Sonal Arora Vice President, TeamLease Services Limited.

Minimum wage code bill 2017: Base pay will differ for states and geographical areas

The new Wage Code Bill which, if passed by the Parliament, will seek to set minimum wages for different states and geographical areas. This will ensure that no State Government fixes the minimum wage below the National Minimum Wages for that particular area as notified by the Central Government.

Rituparna Chakraborty, Co-Founder and Senior Vice President, TeamLease says that instead of the centre it is the state governments that are in the best position to decide the minimum wages because they have a better view of is required locally and have a better understanding of the economics of their

The code on Wages Bill 2017 states that the Central Government, before fixing the national minimum wage, may obtain the advice of the Central Advisory Board which will have representatives from employers and employees. Therefore the Code will provide for a consultative mechanism before determining the national minimum wage, said the statement from Press Information Bureau.

Protecting Employee Interest: Why trade unions must embrace labour law reforms

Article Written by Sonal Arora, Vice President TeamLease. Formation of trade unions alone will not solve employee problems; we need an overhaul of labour laws, and trade unions must work with the government, employers and employees towards reforming labour laws. This will boost job creation in the formal sector.

Last month saw the first trade union from the Indian information technology (IT) industry getting registered in Tamil Nadu. This got many worried, lest it opens the floodgates with more trade unions coming up, leading to a possibility of unionism or collective bargaining or industrial unrest in an industry that was so far away from such contentious phenomenon. While there is nothing wrong with trade unions as such, most employers and industry bodies view them with suspicion because, unfortunately, trade unions in India have always made ‘job protection’ as their primary agenda. It is important to recognise that, unlike some developed economies, India does not have a ‘jobs problem’—our unemployment rate is 5%—but a ‘wages problem.’ Almost everyone in India who wants a job can get one, just not at the salary they want. It is also important to recognise that higher wages or value that people demand can only be provided by formal sector jobs. Our ‘wages’ problem arises because most of our enterprises are dwarfs (small companies that will stay small), rather than babies (small companies that will grow big). This massive informalisation of our enterprises is an important source of poverty for the average Indian worker because enterprises can only pay the wage premium if they are productive. The real agenda for trade unions in India should, therefore, not be a protection of jobs, but enabling job creation in the formal sector.

Empowering women through job creation

Article Written by Sonal Arora, Vice President TeamLease. According to the World Economic Forum’s “Global Gender Gap Report 2017”, India’s ranking has fallen by 21 places from last year. Not only are we currently far below the global average but also behind our neighbours China and Bangladesh. One of the areas where we have fared poorly is in wages and participation of women in the economy where our rank is an abysmal 139. This is not the first report to highlight the plight of our women. In fact, as per the World Bank report, we have one of the lowest workforce female participation rates, ranking 120th among 131.

Even in terms of contribution to the gross domestic product (GDP), women are currently under-represented. At 17%, India has a lower share of women’s contribution to GDP than the global average of 37%. What is even more alarming is that the participation levels have been dropping in the last few years. The National Sample Survey found that while in 1999-2000, 25.9% of all women worked; by 2011-12 this proportion had dropped to 21.9%.

Expanding formal employment: India’s labour laws need desperate surgery

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Article Written by Manish Sabharwal and Rituparna Chakraborty of TeamLease. The Employee State Insurance Corporation (ESIC) is a monopoly for employer-financed health care.

This monopoly gives it a return on equity (ROE) of over 17,000 percent, which is worrisome since the ROE for great companies with satisfied customers like, TCS, and Hindustan Lever are 105 percent, 33 percent, and 67 percent respectively.

The ESIC not only has millions of unsatisfied customers but offers poor value for money — the ESIC pays out less than 50 percent of contributions as benefits while there is hardly an Indian commercial health insurance plan.

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