The Confederation of Indian Industry (CII) has recommended the creation of a National Employment Board in order to look into and address issues faced in employment creation in the country.
The board would consist of members from key Union ministries and state governments. The suggestion was made by CII Director General, Chandrajit Banerjee.
The CII also suggested that the government initiate a comprehensive National Employment Mission.
"Employment generation extends to multiple dimensions and a national mission is required to address all aspects holistically. The government's National Employment Mission should include flexibility in hiring, tax incentives, education and skill development, and promotion of labour-intensive sectors," Banerjee said, in a statement.
The CII also laid down a five-point agenda ahead of the upcoming Budget that is to be presented on July 5 by Finance Minister Nirmala Sitharaman.
It suggested that states should introduce "fixed-term employment". Other labour law reforms should receive priority in new central government infrastructure project funding, it added.
It also recommended the acceleration of transport and power projects along with industrial parks.
"Benefits under Section 80JJAA of the Income Tax Act should be extended for all workers earning up to Rs 50,000 in any sector," it said.
Wage threshold should be increased from Rs 15,000 to Rs 25,000 under the Prime Minister's Rozgar Protsahan Yojana (PMRPY).
PMRPY provides for government contribution to EPF and EPS for new employees for three years, applicable to workers earning less than Rs 15,000.
The CII also suggested that states should be given the power to determine the minimum wages, which should be based on three basic criteria -- geographic location, skill and occupation.
The labour ministry is set to seek Cabinet approval for the Code on Wages Bill next week.
The CII further said the minimum wages determined by the states should not go below the national minimum wages, set by the Centre.
"The concept of a national minimum wage will affect job creation, so it is necessary to give states power to fix their own minimum wages," CII said.
The Code on Wages Bill provides that these minimum wages would be revised every five years.
To boost employment generation, corporate income tax rebates should be given to those organisations which employ more than a set number of formal workers.
According to CII, while the government should fix the minimum wages of unskilled workers, the wages of the skilled and semi-skilled labour force should, however, be determined by market forces.
To encourage more women to participate in the workforce, CII recommended providing child care and maternity benefit subsidies under the Maternity Benefit Amendment Act.
"While industry is not asking for a hire-and-fire policy, a more flexible labour regime would enable India to align with multiple global trade challenges at a time when other nations are attracting new investments," the statement said.
(With inputs from IANS)