Financial Daily from THE HINDU group of publications
Sunday, Apr 24, 2005
Industry & Economy
Kamal Nath hints at `hire and fire' in special economic zones
New Delhi , April 23
THE Commerce and Industry Minister, Mr Kamal Nath, has indicated that the Central Government would not come in the way of States that are keen on adopting some form of hire and fire labour policies in special economic zones (SEZs).
Mr Kamal Nath, who is expected to introduce a comprehensive Bill on SEZs in the current session of Parliament, told the BBC programme Hard Talk India that there are proposals from the State Governments that they should be able to have the labour policies that they would like for the export-oriented units and SEZs.
"The State Governments asked for it. The question now is should the Central Government stand in the way of the State Governments implementing labour laws that they think are more befitting and more employment generating? I don't think so," Mr Nath said.
He also made it clear that the Centre would in the SEZ Bill enable States to decide which of the labour laws they would like to have. "We (Centre) are not relaxing labour laws," he said.
Asked specifically if this would enable the States to have some form of hire and fire, Mr Kamal Nath replied, "Absolutely. It's for the State Governments to decide."
On allowing foreign direct investment (FDI) in retail trade, Mr Kamal Nath insisted that he would not permit foreign investment unless he had a model that would suit India's purposes and not create unemployment.
"I am saying we need to look at a model. I don't have that model (as yet)... I'm the Minister responsible for this. I have said this very clearly that we will only have FDI in retail when we have a model that takes care of the incrementality in retail and create jobs... There are models, which we are examining and if there is a model that suits me (then) sure we are going to have it. (But) if there is a model that is going to create unemployment we are not going to," he said.
When asked whether he would create laws that would determine the location and size of foreign retail outlets, Mr Kamal Nath said, "I will have a law that ensures that the model that could be worked works. First, I have to have a model and then think of the law."
Explaining the way he approached the issue of allowing FDI into the country's retail sector, Mr Kamal Nath said, "When I talk about retail and allowing FDI in retail I talk of what is incremental. Today our retail sector is growing at 20 per cent and incremental retail which does not replace or displace the existing retail structure we have is what we are looking at ... We are looking at a model for opening up the retail sector to FDI that does not
risk, displace or replace my existing retailer. We are looking at incremental employment."
On the sort of retail sector he would want to see in the future, Mr Kamal Nath said: "I want to see that our retail sector which comes in future is modern, creates a cold-chain for my fruits and vegetables and trickles down to my agri sector. That's what I want to see."
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