Chief economic adviser Arvind Subramanian has come up with a comprehensive road map to address India's most demanding labour market task of creating jobs in the formal sector and identifying ways to help country climb the technology ladder which can promote faster medium-term growth.
According to the survey, out of the 10.5 million new manufacturing jobs generated between 1989 and 2010, 3.7 million, about 35 per cent, belonged to the formal sector. However, after 2000 informal sector establishment calculations have flattened and employment has reduced while formal sector jobs have increased.
The survey said, "This might be related to the increasing use of contract labour, "warning that "any overall assessment of contractualisation must also account for its impact on worker protection and workers' plight."
According to the Survey, one of the major roles of the Centre is to make sure that labour regulation is worker-centric, by intensifying workers' choice and decreasing mandatory taxes on formal sector jobs.
It has suggested that policymakers should consider giving lower earners the choice of whether to add part of their salaries to the EPF while retaining the employers' contribution.
The survey said, "This would both introduce competition in the market for savings, which may improve EPFO's service standards, and allow the poor, some of whom may be liquidity constraint, to optimise as per their personal requirements."