Model 24X7 law is right step in creating new jobs

At a time when employment generation has nose-dived to the lowest levels in the last six years, the recent approval of the Model Shops and Establishment Bill by the Union Cabinet is a refreshing move. The latest figures of Labour Bureau of the Union Ministry of Labour show that 1.35 lakh jobs were created in 2015, the lowest figure since 2008, lower than the 4.9 lakh new jobs in 2014 and 12.5 lakh in 2009.

Job creation is the ultimate goal

Job creation is a humungous task for any government given that every month, a million Indians become age-eligible to join the workforce. While we work on overhauling the education system and imparting large scale skilling programmes, the key is to not veer away from the solemn goal of job creation.

But how many of these eligible candidates are employable in fast growing sectors like Information Technology, banking and financial services, manufacturing, infrastructure or even recession proof industries like pharmaceuticals, education and healthcare? The stark reality is that not too many of the larger population may fit into the specialised roles that these sectors demand.  However, it is an undeniable fact that services sector today is the largest sector in India.

As per data from the economic survey, its contribution to the GDP is almost 58%. So it is a no brainer that services sector is what we should, as a rising economy, focus on to sustain our growth rate and more importantly create jobs.

It is pertinent to note that the retail and hospitality sector in our country have not achieved their full potential — both in terms of contribution to the GDP and providing employment. This despite the fact that we have the largest young population in the world, rising per capita income and purchasing power parity. The model law when implemented will most certainly boost consumerism.

The biggest driver will be retail shopping malls, as it will give a level playing field between online and offline retailers as now customers will have better options available all the time. Hospitality will also see a larger impact.

The recent announcement of centre’s decision to implement the recommendations of the seventh pay commission will also impact consumer spending in real estate, hospitality and retail sectors. More importantly, we have just started witnessing a slowdown as far as jobs are concerned in the ecommerce sector, as it fights funding crunch and cash burn to focus on unit economics. This slowdown in jobs can now be offset with new jobs in brick and mortar retail outlets.

Job growth of 8-10%
So again as pointed out earlier, the model law allowing malls, cinema halls, restaurants and shops to remain open 24X7 is a right step in the long path of creating more jobs.  If implemented by various states in its current form (as it is only suggestive and onus is on state governments to adopt it in full), will boost employment across many sectors. It will create tremendous job opportunities with a spike of 8 -10% in growth in jobs across India. These opportunities will also drive workforce movement across cities as skilled labour from tier II and tier III cities will find greater options of livelihood with the opening up of more jobs.

The Bill is also expected to lead to greater gender diversity as women will get better opportunities to work and make better decisions based on their work life situations.  Considering that the retail and hospitality sectors have more women oriented job profiles, this can only spell hope for the larger women population.

The most far reaching suggestion in the Bill is the onus on establishments to ensure the safety of their women workforce working late. They will have to provide safety not only at work but also while travelling to work. 

India has only about 30 million jobs in the organised sector and nearly 440 million in the unorganised sector. Policy initiatives alone can help the unorganised sectors organise and informal employees to move into formal jobs where they can also avail the comfort of social security.

The recent referendum in Britain has shown that globalisation will hit a speed bump and that export-led growth will not be sustainable in the long term. It serves us a very valuable lesson that we need to focus on domestic consumption of products and services. Policy initiatives like the model law are vital to expanding our domestic market and creation of new jobs.

(The author is Managing Director of Kelly Services and Kelly OCG India, a recruitment and staffing company)