The government should reform labour laws and make them more flexible to make it easier to do business in the country, the NITI Aayog said in an Ease of Doing Business report.
The report, based on an enterprise survey of 3,276 manufacturing firms, was prepared jointly by NITI Aayog and IDFC Institute and released on Monday by Union Minister for Law Ravi Shankar Prasad and Minister of Commerce and Industry Nirmala Sitharaman.
“According to our survey’s finding, firms in labour-intensive sectors find compliance with labour-related regulations particularly onerous. This fact translates into enterprises avoiding the labour-intensive sectors,” according to the report.
The survey found that more enterprises in labour-intensive sectors reported that finding skilled workers, hiring contract labour and terminating employees was a major or a severe obstacle.
Such sectors also reported a significantly higher average time taken for environmental approval and more days lost due to strikes and lockouts, it said.