The Labour Ministry has revived the Small Factories Bill two years after the first draft was unveiled, as the government enters into a mission mode to improve the ease of doing business in the country.

The draft Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014 was floated by the Labour Ministry in October 2014, based on the recommendation of the Second National Commission on Labour in 2000. The proposed Bill seeks to bring all small factories under a common regulation and exempt these units from 14 central labour laws. It envisages rules for wages, overtime hours, social security and appointment of factory inspectors in units employing fewer than 40.

The Bill, which benefits companies with less than 40 employees, is likely to get the Cabinet’s approval shortly, a senior Labour Ministry Official told. “The Ministry has tried enough to take all stakeholders on board“, the official added.

The idea of a standalone Small Factories Bill is to make life simple for Small and Medium Enterprises, the official said, speaking on the condition of anonymity. “This will help SMEs to flourish, which in turn will create more jobs.”

SMEs account for 30 per cent of the country’s total industrial production, and a dedicated legislation could spell a boost for the government and the ruling BJP ahead of assembly elections in sates which account for a large number of Small and Medium Enterprises. The Bill also proposes to move out workers in small factories from under the Employee Provident Fund Organisation Act to provident fund schemes approved by the Insurance Regulatory and Development Authority, a move that trade unions aren’t happy about.

“Every employer shall ensure that all workers in the small factory are covered by a provident fund scheme, approved by the Insurance Regulatory and Development Authority,” the draft Bill says.

Source: The Economic Times