Govt to provide unemployment allowance to jobless workers

August 01, 2009 - India

Following is the Text of the Statement of the Union Minister of Labour & Employment, Shri Mallikarjun Kharge in reply to the Calling Attention Notice given by Shri Gurudas Dasgupta, Shri Basudeb Acharia and Advocate A. Sampath Members of Parliament(Lok Sabha) regarding “Situation arising out of large-scale loss of jobs due to retrenchment and closure of industries, including IT sector, and steps taken by the government in this regard”.

Text of the Minister’s Statement
“The impact of global slowdown on the Indian economy has been felt since the middle of 2008. Keeping in view the importance and multi-faceted nature of the challenge, the Ministry of Labour & Employment convened the 42nd Session of Indian Labour Conference, which epitomizes the process of tripartite consultation, in February, 2009.

An Agenda Item on “Global Financial Crisis – its effect viz., large scale downsizing, lay-offs, wage cut and job losses,etc.’ was discussed by the Conference in this sitting. Measures suggested by the Conference to fight global slowdown include urgent steps to stimulate domestic demand, greater investment in infrastructure and housing, and strict implementation of labour laws.

To counter the negative fallout of the global slowdown on the Indian economy, Government of India provided three focussed fiscal stimulus packages in the form of tax relief and increased expenditure on public projects while the RBI took a number of monetary easing and liquidity enhancing steps in order to boost domestic demand.

These measures have helped in keeping the Indian economy on growth trajectory, though at a moderate level when compared with the performance of recent past. As is evident from the budget for the year 2009-10 presented by Hon’ble Finance Minister, the Government has continued with the policies aimed at boosting demand, generating employment and creating infrastructure in rural and urban areas through measures such as enhancing the exemption limit in personal income tax, eliminating the surcharge on personal income tax, raising the deduction limit under section 80-DD in respect of maintenance of a dependent who is a person with severe disability, and increased public expenditure, especially on social sector programmes.

These measures are also likely to act as a safety net for the vulnerable sections of society including the workers who may have lost their jobs as a result of economic slowdown.

To boost the construction activity which generates substantial employment in the economy, interest rate subsidy has been offered for housing loan borrowers from the lower and middle-income groups.

In addition, individual Ministries and Departments have also taken steps to counter adverse effects of global slowdown on Indian Economy. These include Interest subvention of 2% to intensive sectors for exports viz., Textiles (including Handlooms), Handicrafts, Leather, Gems & Jewellery, MarineProducts and SMEs; additional funds of Rs. 1400 crore for Ministry of Textiles to clear the backlog claims of textile units under Technology Upgradation Fund (TUF); and putting in place a high level monitoring mechanism so that immediate further corrective measures can be taken as may be required.

Industrial Disputes Act, 1947 puts restriction on lay-offs and retrenchment and provides protection to the workmen in case of lay-off, retrenchment and closure of establishments. Moreover, Ministry of Labour & Employment is implementing the Rajiv Gandhi Shramik Kalyan Yojna through the ESI Corporation which provides unemployment allowance for upto one year to those insured employees who have put in five years of service and have been rendered jobless due to retrenchment, closure of factories or permanent disability due to non-employment injury.

Our Ministry is closely monitoring the situation. The state governments have also been advised to make their industrial conciliation machinery more effective and sensitive to ensure industrial peace and implement labour laws in an appropriate manner so that the interest of the workmen is protected.

I share the concerns of the Hon’ble Member(s) on the matter and assure the House that our Government is taking all possible steps to successfully address this challenge. However, I welcome the suggestions of the Hon’ble Members to successfully handle the situation which has arisen due to the courrent global economic slowdown.”