Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Tuesday 30 June 2015

Labour Law Reforms

amitabh.kant@nic.in



Dear Amitabh ,

You may like my following blog that I just posted on a few web sites

regards,

hemen

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Hire ,  when   you   need  :   Fire ,  when   you  don't  !



What is the amount of investment required to create 1 Million jobs per month ? ( = No of jobseekers joining India's labour market each month )


That would depend upon the " Industry " for investment


There are some , " Capital Intensive " industries which would require a huge investment , whereas , there are some " Labour Intensive " industries , where a much smaller investment can generate 1 Million jobs


For example , to generate 1 Million jobs would need :


*  Industrial Instruments ( Labour Intensive )................... Rs  10,000  Cr

*  Boilers / Steam Generating Plants ( Capital Intensive )... Rs 500,000 Cr


{ Source : DIPP , Investment and Job Creation from Aug 1991-Mar 2014
   as reported in Times of India / 17 March , 2015  }


Of course , we don't have to create all of those 1 Million jobs per month , in just one or two industries


If we take an " Average Investment " required across ALL the industries , then , may be , we need :


Rs 200,000 Cr to generate 1 Million jobs every month


ie :   Rs 2 Lakh*Crores   per month

ie :   Rs 24 Lakh*Crores  every year


Now , who has got that kind of money to invest , even if we assume that


>  there is a " Ready Market " for all of those products , here and now ?


>  this market will not shrink in the foreseeable future  ?


Obviously , the Governments ( Central + States ) , don't  !


If we include FDI , may be Private Sector can raise that kind of money


But will it invest in " Capital Intensive " industries or in " Labour Intensive " industries ?


Given the current labour laws , it is clear that the investors will choose to invest in Capital Intensive industries


Even if that means , creation of only 1 Lakh jobs instead of 10 Lakh jobs !


At this point , it is worth researching whether USA succeeds in creating some 150,000 / 200,000  new jobs every month , due to its policy of  :


"  Hire when you need : Fire when you don't  "


Before hiring , do USA industrialists ask of themselves :


"  If things go wrong and I am forced to trim my work-force , will this recruit
   become a permanent burden ? "


Question that the Labour Laws must answer :


" What comes first ?  Creation of new jobs , or , retention of existing jobs ? "


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hemen  parekh

June 30 , 2015

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