New Delhi: Aimed at helping investors and accelerating growth, the Modi government is planning a new labour legislation that would merge 44 labour laws under four categories — wages, social security, industrial safety and welfare, and industrial relations.
The decision has been taken at an inter-ministerial meeting chaired by Home Minister Amit Shah and attended by Finance Minister Nirmala Sitharaman, Labour Minister Santosh Gangwar, Commerce and Railway Minister Piyush Goyal among others.
"A new Labour Bill will be introduced in the coming session of the Parliament," Gangwar told reporters Tuesday after the hour-long meeting. Gangwar said the draft bill will be placed before the Union Cabinet after which it will be introduced in Lok Sabha, possibly in the second week of the coming Parliament session.
"All major labour unions in the country were consulted by the government for the new labour laws," he said. The four categories will deal with wages, social security, industrial safety and welfare, and industrial relations, an official said.
It is expected that the laws related to social security, including the Employees' Provident Fund and Miscellaneous Provisions Act, Employees' State Insurance Corporation Act, Maternity Benefits Act, Building and Other Construction Workers Act and the Employees' Compensation Act will be merged to create a single social security law or code.
Several industrial safety and welfare laws such as the Factories Act, the Mines Act and the Dock Workers (Safety, Health and Welfare) Act, will be merged to create a single category on industrial safety and welfare. The Minimum Wages Act, the Payment of Wages Act, the Payment of Bonus Act, the Equal Remuneration Act and a few others are likely to be merged. The Labour Code on Industrial Relations will combine Industrial Disputes Act, 1947, the Trade Unions Act, 1926, and the Industrial Employment (Standing Orders) Act, 1946.
The proposed new labour law will help investors and is expected to accelerate growth, another official said.
Meanwhile, India Inc on Tuesday made a case for reduction in corporate tax rate, abolition of minimum alternate tax, halving dividend distribution tax to 10 per cent and increase in outlay for infrastructure sector in the upcoming Budget with a view to arrest economic slowdown.
Representatives of industry chambers made these suggestions during their customary pre-budget consultation with Finance Minister Nirmala Sitharaman, who on her part, recalled the steps taken by the government since 2014 to improve the country's business climate. Sitharaman will present the first Budget of the Modi 2.0 government on July 5.
In the meeting, CII President Vikram Kirloskar suggested bringing down the dividend distribution tax to 10 per cent from the present 20 per cent, saying it should also be not taxed at the hands of the investor.
In her opening remarks, Sitharaman said since 2014 the government has taken measures to simplify and rationalise existing rules and introduced Information Technology in a big way to make governance more efficient and effective.
As a result, she added, India has considerably improved its ranking to 77th position among the 190 countries and has kept 23 ranks over its rank of 100 in the Doing Business Report 2018 as per the World Bank Doing Business Report, 2019. Sitharaman also said that industry should accommodate more work force to reap the benefits of demographic dividend. Among other things, Assocham President B K Goenka recommended that 100 per cent depreciation should be permitted in the first year of investment for all new investments.