The Hindu Business Line : States may be allowed to enact labour laws in specific areas

(From left) Mr Kamal Nath, Minister for Commerce and Industry; Mr Murali Venkatraman, President, Madras Chamber of Commerce and Industry; and Mr E.V.K.S. Elangovan, Minister of State for Commerce and Industry, at the MCCI AGM in Chennai on Friday. — Bijoy Ghosh

Chennai , Aug 5

THE Centre is considering empowering States to enact separate labour laws in specific areas such as special economic zones, according to the Commerce and Industry Minister, Mr Kamal Nath.

Responding to questions from delegates at the 169th annual general meeting of the Madras Chamber of Commerce and Industry here today, Mr Kamal Nath said that some State Governments had sent proposals to the Centre stating that they be allowed to enact separate labour laws in specific areas. There was growing competition among the States to attract investment and enacting separate labour laws at least in special economic zones was one such way of getting foreign direct investment.

The Minister said that within the political space available to the Government, "it does seem an uphill task" to carry out labour reforms.

To another question on global trade negotiations and the use of anti-dumping provisions by the US and EU against Indian exports, Mr Kamal Nath said the next round of negotiations would focus on these non-tariff barriers. The Government would make it clear that it was not in favour of any agreement that did not take into account non-tariff barriers like environmental standards, be it with regard to negotiations on agriculture or NAMA (non-agricultural market access).

The Minister said that he had asked all sectors to prepare a list of non-tariff barriers used by developing countries for the Centre to take necessary action.

On concerns expressed over the fringe benefit tax, he said he would convey these concerns to the Finance Minister and assured the delegates that "I am on your side." While revenues were essential, the Government must find the least cumbersome way for this and also unshackle some of the procedures. There would be a 2-3 per cent delinquency in any system, which must be built into any new proposal.

In his address to the AGM, Mr Kamal Nath said the Centre was keen that exports should be employment generating rather than just dollar generating. Last year, one million new jobs had been created by 22 per cent increase in exports. India's global trade was $185 billion and this was expected to increase to $500 billion in the next 3-4 years. "We in India are in the departure lounge, ready to take off," he said.

The Minister said the biggest challenge was to ensure that "India is shining" for all, for which business and government had to work together. There had to be all-inclusive growth, the pattern for which had been laid in 1991 when economic liberalisation was initiated. The country had to integrate the growth of business with the goals of government and the Centre was talking of public-private partnership as one that resulted in social empowerment.

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