Indian Union Budget 2022: Upgrading skills is of utmost importance. Image courtesy of Wikimedia Commons

Less than two years ago, the world as we know it changed. The pandemic posed what seemed like an insurmountable challenge, one that few had witnessed in living memory or even in the past 100 years. However, the world resisted and India was able to recover and the economy was on a steady slope.

What the economy mainly needs right now is fuel – in this case, land, labor and capital. Capital is being pumped in by central banks around the world over the past 20+ months, including India’s central bank. At the same time, organizations and businesses have had faster than expected debt repayment, so money supply is not an issue. India is blessed with abundant land for both agricultural and non-agricultural productive use. What India needs to address is its labor problem and this should be one of the main focus of the upcoming budget.

Budget 2022 is expected to address job creation and growth in various sectors. While the government has activated fiscal capacity and implemented several measures to support the economy over the past two years through initiatives such as the PLI programs, changes in the MSME sector and Atmanirbhar Bharat, it It is now imperative to focus on job creation.

The following measures can be implemented to ensure the same:

• Online upskilling should be the primary focus going forward as most Competence Centers have remained non-functional due to COVID-19 for the past 22 months. This can be achieved by government and the Ministry of Skills pushing all skills partners to convert curricula to digital and supporting entities with grants and credits.

• The Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) plan scheme which was designed to incentivize employers to create new jobs should be reinstated immediately, allowing EPFO ​​subsidies for the first 3 years for all new UAN generators . Although the scheme has been extended, it has been modified to mainly benefit organizations with less than 1,000 employees despite the massive job creation that only takes place in companies with more than 1,000 employees.

• Extension of benefits offered under Section 80JJAA of the Income Tax Act which supports job creation. Additionally, considering wage inflation over the past few years, entry level employment should be considered at salaries of up to Rs 30,000 per month for the purposes of Section 80JJAA for employers which create a net addition to employment, instead of the current Rs 25,000. per month.

• Large employers that implement the Net Addition to Employment should be awarded Gold status as “Champion Employers” across the government ecosystem.

• According to EPFO ​​records, the growth of “expert services”, i.e. staffing, security and facilities management services, creates almost 40% of total new formal jobs . These organizations and industries need industry status. Today, this labor services industry would also be one of the biggest GST contributors, in addition to the social security coverage of all their entry-level employed talents.

• The new social security code offers protection to odd job and platform workers who, given the arrival of the third wave, are increasingly in demand. However, their implementation is essential and the government must accelerate the use of these funds to ensure maximum benefits for workers.

• Accommodations for employees working from home: As the COVID-19 pandemic and subsequent protocols have created an environment in which employees today work from anywhere, arrangements must be made to supplement expenses incurred when working from home, such as electricity expenses, internet and connectivity expenses, office furniture as well as a one-time installation cost. To meet this one-time set up cost, up to Rs 50,000 for the financial year can be provided and medium support expenses of up to Rs 5,000 per month or Rs 60,000 per year can be allocated as as tax-deductible expenses beyond Section 80C.

The “big quit” trend and resulting wage inflation have highlighted talent shortages across all industries. This problem will only get worse as borders open up and Indian talent is pursued by more developed countries.

Another critical aspect to consider, especially for MSMEs, which traditionally hire around 90% of India’s workforce, is their inability to enter the formal sector due to a lack of growth. As a result, employees do not yet benefit from social security benefits. To solve this problem, the Ministry of MSMEs must take active measures to ensure sustainable growth of at least 10% every year to eventually achieve large-scale development. The transition of the MSME sector from a minor category to an entry into the major leagues should be reinforced by the support of wages and social security by the government.

The author is President – Workforce Management, Quess Corp. The opinions expressed are personal.

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