'It's now imperative that the focus is on job creation'

By Lohit Bhatia, President-Workforce Management, Quess Corp & President, Indian Staffing Federation

Budget expectations on employment generation

"An important aspect that the 2022 Budget should address is employment generation and growth across various sectors. While the Government has enabled fiscal capabilities and implemented several measures to support the economy in the last two years through initiatives such as PLI schemes, changes in the MSME sector, and Atmanirbhar Bharat, it is now imperative that the focus is on job creation.

The following measures can be implemented to ensure the same:

Online upskilling needs to be the primary focus going forward, as most skill centres have remained non-functional due to Covid-19 in the last 22 months. This can be achieved through the government and Ministry of Skills pushing all skill partners to convert programs digitally and support entities with grants and credits.

The Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) Plan Scheme which had been designed to incentivise employers for generation of new employment should be immediately brought back allowing EPFO grants for the first 3 years for all first time UAN generators. While the scheme was extended, it was tweaked to primarily benefit organizations smaller than 1000 employees despite massive employment generation taking place only in companies with more than 1000 employees.

Extension of benefits offered in Section 80JJAA of the Income Tax Act which supports job creation. Further, given the wage inflation that has been happening in the past few years, entry-level employment should be considered as wages up to Rs 30,000 per month for the purposes of Section 80JJAA for employers that create net addition to employment, instead of the current amount of Rs 25,000 per month.

Large employers which implement net addition to employment should be bestowed the Gold status as “champion employers” across the government ecosystem.

The new Social Security Code offers protection for gig and platform workers, who, given the incoming third wave are increasingly being sought after. However, their implementation is key and the government needs to expedite the utilization of said funds to ensure maximum benefit for workers."

Accommodations for Work From Home employees

“As the Covid-19 pandemic and subsequent protocols have created an environment in which employees are today working from anywhere, they should be supplemented for additional expenses that are incurred while working from home, such as electrical expenses, internet and connectivity expenses, office furniture as well as a one-time set-up cost. To address this one-time set-up cost, up to Rs 50,000 for the financial year can be provided and average support expenses up to Rs 5000 per month or Rs 60,000 per annum can be allocated as tax-deductible expenses over and above the section 80C”.

Government measures for buoyancy of economy

“Due to the ‘Great Resignation’ and consequent inflation of wages, talent shortages are already visible. This problem would only compound further as borders open and Indian talent is pursued by more developed countries. The Indian government must also begin benchmarking individual income tax rates to neighbouring countries, especially as income tax rates on individuals in South East Asia hovers near the 15-22% mark in comparison to Indian rates at 30%+ cess. The government can also look at doing away with the various cesses as the economy recovers, allowing more money in the hands of individuals to enhance consumption.

The implementation of the PLI scheme will be key, and there should be annual targets for each ministry in place under which the scheme falls. There is tremendous opportunity with the PLI scheme, which encompasses reduced interest rates, lower tax rates on new manufacturing companies, etc. If the implementation of the labour codes can be timed with start of new financial year, we would be able to attract more FDI into manufacturing at this time.”