The Union Budget 2021, the first ever paperless budget in India, is all set to be announced on 1 February 2021 by Nirmala Sitharaman, Union Minister of Finance. All eyes are on the announcements and subsequent reforms that the Government of India wishes to bring about as this the first budget that is being announced post the COVID-19 pandemic in India. Considering the losses that industries had to bear, and the number of people who lost employment, Industry leaders from various domains share their views on what the Government needs do to create jobs in India.
One of the main focuses in the Union Budget 2021 should be to enable SMEs of the country as they in-turn create a lot of jobs, says Jatin Jakharia, co-founder and CFO, WorkIndia. “Since 98% of our employer base is SME, we have closely witnessed the economic activity among SMEs. Hiring is 70% of pre-COVID levels, implying SMEs haven’t been able to still recover. SMEs are the heart of India; Government can do more to provide more relief so that economic activity among the SMEs increases, which leads to more job creation and which in turn leads to more hiring in the blue collared segment (almost 23.7 crore in India),” he said.
Also, investing in digitisation and paying importance to reskilling of employees in new age technologies can result in more opportunities being created in the country says Alok Bansal, managing director and country head, India at Visionet. “The government should pay attention to employing technologies that can be used to upskill or reskill the workforce employed by India’s MSME sector. Specialized tech centers can be set up and operated by the government and industry groups to equip the workforce with the required skills and perform AI-empowered hybrid jobs. Such interventions by the government have numerous upsides to them, starting with increased earning potential that will pave the way towards the strong economic growth of the MSME sector,” he stated.
Niraj Hutheesing, founder and managing director, Cygnet Infotech, shares a similar view as well. “The Union Budget 2021 provides two big opportunities. Firstly, boost economic growth by scaling investment in digitization. Secondly, drive technology enabled rationalization of the country’s tax infrastructure. The former will bring employment and self-employment opportunities for the youth through digital initiatives of Start-ups and MSMEs. The latter will enable businesses to thrive in a simplified indirect- tax compliance regime powered by new technologies like hyper automation. This will also ensure that the funds collected through GST are used efficiently and help in generating economic growth in this financial year. It is important to have a set framework and policy for GST compliance for all businesses in India, let us see how the government addresses this,” he said.
Union Budget 2021 Should Bring About Labour Reforms
The migrant exodus and the situation that ensued was one of the most significant incidents to occur during the lockdown. Considering the importance labourers hold in India, the Union Budget 2021 must include measures to bring about labour reforms says Sangeet Kumar, CEO and co-founder, Addverb. “Increasing minimum wages is the need of the hour as during the COVID pandemic most of the labourers left for their hometowns and to bring them back while providing them with a meaningful life, their wages should rise. According to a recent study, the total number of jobs related to developing and deploying new technologies, i.e. Automation, AI and robotics-related applications, may grow to 20 to 50 million globally by 2030 and more than 375 million workers globally will have to master fresh skills as their current jobs evolve alongside the rise of automation, robotics, AI, and the capable machines thereby enabled. Thus, the Government should come up with more upskilling programs to make the workforce ready to work with robots and other automation through industry partnerships,” he observed.
Rituparna Chakraborty, co-founder and executive vice president, TeamLease Services, made similar comments with regard to her expectations from the Union Budget 2021. “The budget must build on recent reforms like labour and education to grant choice to our firms and citizens to improve their productivity. Given the COVID induced multi-lac crore shortfall taxes, we propose three non-fiscal flick-of pen reforms for formal job creation and employability,” she said while adding the following pointers:
- Make employee contribution to Provident Fund voluntary- Mandatory payroll confiscation levels that are higher than savings rate breed informality. And hence making it voluntary will accelerate the current cycle of enterprise formalization. Further, this money belongs to employees and it is most prudent to give them the freedom to choose how to invest.
- Modernisation of ESIC- India’s largest health insurance program – ESI, has been missing in COVID because of governance that is too large, old, and unrepresentative. The budget should announce modernization of ESI governance in parallel with a June 1st, 2021 deadline so that employees have the freedom to opt the service provider for their payroll deducted health insurance contributions.
- The four labour codes rules will soon be notified and hugely increase manufacturing employment; the budget should announce a three year timetable to move to one labour code. In addition the budget must announce a cross Ministry compliance commission tasked with the rationalization, digitization, and decriminalization of India’s regulatory cholesterol of 65k+ compliances and 6.5k+ filings and issuing a single Universal Enterprise Number.
Time to Ensure Equal Participation from Women
One of the positive trends that the lockdown gave rise to was the work-from-home culture, which made it possible for a large number of women to re-enter the workforce. JobsForHer recently conducted a survey around women professionals and job seekers which revealed that over 40% of respondents consider ‘flexible options that allow a certain amount of work from home’ in the post-COVID world as the deciding factor when it comes to their jobs. The option of working from home and/or visiting the office only when required is the best one according to them as they adapt to the changing corporate world and family needs. However, IT leaders believe that the Government must now introduce certain measures in the Union Budget 2021 to encourage more participation from women.
“The Union government should endorse women’s welfare by incentivizing women employment. Consider providing tax breaks to companies that employ a higher percentage of women in their workforce. This will strengthen the employment opportunities for women while companies can utilise the tax sops to fund women-centric initiatives,” said Anshuman Das, CEO, and Co-founder, CareerNet.
Neha Bagaria, founder, Jobsforher, said: “We expect the Budget 2021-22 to ensure we create the talent pipeline required to service business needs in this new post-Covid world which has become increasingly digitised. As the jobs of the future become increasingly tech-based, we need to ensure women are equal participants also. The budget should accommodate for skilling programs for women to upskill themselves in the latest technologies which further helps them contribute to the country’s GDP. Also the pandemic has seen a huge increase in flexible and contract workers who will need inclusive policies, perks and benefits so that we can benefit from the wide talent of women who are seeking flexibility with arrangements.”