Union Budget 2021: Government must build on labour, education reforms, say HR experts

New Delhi: The upcoming budget must build on recent reforms in labour and education and the government should continue to provide policy as well as financial support for skilling to ensure that the workforce in India is future ready, say HR experts.

The scale of provisions under the Digital India mission and the Skill India campaign needs to increase as there has been a rapid rise in new-age digital technologies like Artificial Intelligence, IoT, Machine Learning, Cloud Computing, and Big Data, they suggested.

"One place where India Inc is looking for clarity from the government is on Wage code implementation – both on timelines and certain policy issues," said Nitin Sethi, CEO, India and South Asia, Performance, Rewards and Organisation Effectiveness, Aon.

Last year, Parliament passed three labour codes on Industrial Relations, Social Security and Occupational Health Safety & Working Conditions (OSH).

The Code on Wages was approved by Parliament last year and its rules have been firmed up. But the implementation of the rules for Code on Wages was held back because the government wanted to implement all four labour codes in one go. These four codes are likely to be implemented from 1 April this year.

"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," said Rituparna Chakraborty, Co-Founder & Executive Vice President, TeamLease Services.

Experts also advocated for sector-specific allocations as the prolonged lockdown has had its economic impact, especially among retail, manufacturing, FMCG, travel, aviation, and automobile, to name a few.

"The Finance Minister could address the sectoral sensitivities following the impact of the prolonged pandemic on the companies by extending budgetary provisions with tax relaxations for businesses, increase scale of provisions under the Digital India mission and Skill India," said Kamal Dutta, Managing Director, Skillsoft India.

TeamLease Services' Chakraborty also advocated for modernisation of ESIC and asked for reforms to make employee contribution to Provident Fund voluntary.

"The budget should announce modernisation of ESI governance in parallel with a 1 June, 2021 deadline so that employees have the freedom to opt the service provider for their payroll deducted health insurance contributions," she said.

She noted that mandatory payroll confiscation levels that are higher than savings rate breed informality. And hence making it voluntary will accelerate the current cycle of enterprise formalisation.

According to Mala Chawla, Managing Partner, Global Practice Group Leader for Diversity and Inclusion, Stanton Chase, the budget must also look at building confidence for investment by Indian companies and promoters. Over the last decade, India has realised that innovation and technology have the potential to bring about a serious change. This needs a push by the government to bring back the lost confidence in the market".

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