State Governments can strike out on their own and undertake implementation of whichever components of the four labour codes they may want, V Anantha Nageswaran, Chief Economic Advisor, said on Wednesday.<\/p>\n
\u00a0\u201cThey don\u2019t have to necessarily wait for entire set of the four labour codes to be ratified by all States and become legislative reality to act on them\u201d, Nageswaran said at a plenary session at the 51st National Management Convention of All India Management Association in the capital.<\/p>\n
Nageswaran said that States are free to implement these four Codes in partial fashion picking out components where it\u2019s possible.\u00a0<\/p>\n
He said that two labour codes out of four (enacted into law and received Presidential assent in 2020) are notified already. Other two are in different stages of being ratified by States, Nageswaran said.<\/p>\n
The Chief Economic Advisor was replying to a question from the audience on the delay in implementation of the four labour codes in entirety and how it may come in the way of boosting\u00a0\u00a0economic growth.<\/p>\n
In his plenary session titled \u2018Role of Capital and Labour in New Growth\u2019, Nageswaran also made it clear that there was no one to one causality between labour market regulations and job creation.<\/p>\n
\u201cHiring is a function of private sector investments in new businesses and new capacities, function of skill level, function of technology, function of competition and labour market regulations. Labour is just one factor\u201d, he added.<\/p>\n
\u201cIt is not that labour laws are the only binding constraint. I don\u2019t see Labour as a one shot magic wand. There are multiple action points that are needed by stakeholders concerned\u201d.<\/p>\n
Capital and Labour choice<\/b><\/p>\n
Nageswaran said that the choice between capital and labour deployment cannot be regulated as it will create unintended consequences. \u201cI don\u2019t see need for a regulatory framework. I would rather prefer it to be a consensus building voluntary process for a compact between industry, government and public. I don\u2019t see regulation as first cut resort to the problem\u201d, he added.<\/p>\n
On deglobalisation, Nageswaran said that though there has been a degloabalisation of trade in goods and services, capital is still welcome to move freely across borders. He argued that if other countries want access to Indian markets, India must seek access to their labour and services markets.<\/p>\n
\u00a0On the paradox of formalisation of business entities with\u00a0informalisation of jobs, the CEA said that greater formalisation of the economy has been achieved through GST and registration of MSMEs on portals. However simultaneously there has been an informalisation of jobs in the formalized enterprises, which is a cause for concern, he noted.<\/p>\n
Nageswaran also did not see any merit in introducing any universal basic income (UBI). \u201cIt has to be targeted and cannot be universal. It has to come with reciprocal obligations. There are fiscal constraints, behavioural constraints and law of unintended consequences. There is no space for the \u2018U\u2019 in this\u201d, Nageswaran said.<\/p>\n