India's archaic labor laws strictly regulate hiring and firing, while an onerous "inspector raj" deluges employers with paperwork, discouraging them from expanding and taking on new staff. "Fifty types of departments chase them, 50 types of forms have to be filled in. The world has changed," Modi said, adding that companies would now only need to fill a single form online.
The change would chiefly benefit firms that employ just a few employees, he said. In 2009, 84 percent of India's manufacturing workers were employed by firms with fewer than 50 workers, research by the Asian Development Bank shows.
It is difficult to estimate the size of this workforce, but just 8 percent of Indian workers have formal jobs with any security and benefits, such as the Provident Fund, while most are employed in the informal sector, experts say.
Even though the World Bank says India has one of the world's most rigid labor markets, fears of a trade union backlash and partisan politics have deterred successive governments from reform measures.
Business leaders have high hopes that Modi, an advocate of smaller government and private enterprise, will change that.
On Thursday, the Hindu nationalist leader also promised easier movement of accounts in India's Provident Fund scheme by using a universal account number. The payroll-funded program has 80 million members.
Sources: Reuters - globaltimes.cn
16/10/14
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