Ravi S Singh
Tribune News Service
New Delhi, January 29
The Union Government’s Economic Survey Report – 2021 has validated the gnawing concerns that Covid-19 pandemic induced lockdown had adversely impacted the job and livelihoods in service sectors more than the manufacturing sector.
With regard the labour law reforms rung in by the government through passing of the four codes by Parliament, the report expressed optimism of them having salubrious effect on the economy. They will give leg up to the MSME sector which has taken a hit due to the lockdown.
Till this report, it was a moot point on whether the service sectors or the manufacturing sector had been greater victim.
The report says that the public health response needed to slow transmission of Covid pandemic together with the need for social distancing and minimising contact, meant that service sectors reliant on face-to-face interaction, particularly wholesale and retail trade, hospitality, and arts and entertainment, have “seen large contractions than manufacturing”.
It puts the matter in perspective saying that the service sectors contribute a significant portion of both incomes and employment in most economies
“The scale of disruption in these sectors has, therefore, had severe impact on the livelihoods of sections engaged in these sectors.”
The lockdown led to local, regional and global supply disruptions hitting economic activity, rendering a “first order “ supply shock. This in turn led to demand shock both through disruptions in the labour market, which affect household income, and through the precautionary motive to save, which stemmed from the uncertainty amidst the health crisis.
With regard to the labour law reforms, the reports termed them as among major structural reforms having potential for “unparalleled opportunity to grow and prosper”. They will contribute to job creation in the primary and secondary sectors.
It underlined that these “historic” reforms will benefit MSMEs to increase employment, enhance labour productivity and thereby wages.
The reforms were undertaken by rationalising or merging a clutch of 41 central labour laws into four in the form of codes.
The codes will become operational after the Union Government frames “rules” under them.
The Labour Ministry has held a series of “tripartite” consultations on draft of the proposed rules. The rules are likely to be announced during this Budget Session of Parliament.