Labour Reforms

  • Referring to the labour reform policies of the Narendra Modi government, where measures are being taken to make it easy to hire and fire workers, with an eye on foreign investors likely to invest in the country under the ‘Make in India’ programme, Ms. Polaski said that such measures alone cannot guarantee better Foreign Direct Investment (FDI).
  • More and more investors from the West were finding that ‘portfolio investment’, where bonds and stocks are purchased in the short-term and them sold for a profit, especially with government bonds, provided a higher rate of return, and were opting for it, she said.
  • Therefore, a balance of domestic demand and increase in export demands was the way forward for countries like India to improve growth.
  • According to a recent report by the McKinsey Global Institute, India could add 60 per cent to its 2025 GDP by bridging gender gap at work. At present India seriously lags behind in female labour force participation, having missed its Millennium Development Goal target in this area.
  • To this, Ms, Polaski said relatively strong growth and implementation of MGNREGS has perhaps pushed female labour participation down from 34 % earlier to 28 %.
  • With the garment export industry suffering due to reduced demand globally, and India’s inability to compete with cheaper labour provided by countries like Bangladesh, she said that tapping into the domestic market was a better way to sustain these industries and also ensure that women, who dominate such industries, get to keep their jobs.

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