Economies around the world have witnessed multiple unprecedented scenarios in the past three years. Massive shifts in consumer demand, supply chain disruptions, immense liquidity infusions by central banks, followed by rising inflation, funding booms, climbing interest rates, and dried-up capital markets; every country suffered gravely due to so many ups and downs in such a short span. In the phase of this turmoil, the Indian economy emerged victorious with the support of our strong human capital and progressive leaders with incredible foresight. But, our success shouldn’t make us complacent because the incessant economic volatility is far from over.
While COVID-19 cases start to surge again in some countries, the upcoming Union Budget is one of the important occasions to take proactive and corrective measures to maintain future stability. Here are some expectations and recommendations from the human capital perspective.
For the Gig Economy: As per the NITI Aayog, The Indian gig economy is expected to rise by nearly 3 Times from 7.7 million in 2022 to 23.5 million by 2030. While the new wage codes have some clauses for the welfare of the gig workers, we need a lot more attention to this emerging workforce.
When compared to full-time employees, gig workers need more support with social security, health security, financial support to scale self-employment, and assistance with taxation, legal, and compliance-related activities. The Union Budget can have allocations to improve the safety and security of gig workers. At the same time, we also need capital resources to spread awareness about the existing support facilities available to the gig workers like NPS, e-shram, PMSBY, etc. Simplification of labour laws, taxation and compliance processes will make it easier for gig workers to operate and flourish with fewer impediments.
For Employees: There are many implementations due for employees that may need immediate attention. To begin with, the current tax slabs should be revised as per the rising inflation to promote savings and investments. In case of an outbreak of COVID-19 infections, many employees may shift back to remote working. In such a scenario, the availability and affordability of 5G data will play a key role in ensuring productivity. Tax benefits on Work-from-home allowances would also be a meaningful step.
The 1.5 million IT/IT-es employees in Bengaluru also deserve the HRA benefits equivalent to the employees working in Delhi, Kolkata, Chennai and Mumbai. Annexing Bengaluru to the list of metro cities would improve affordability amidst the rising house rents in India’s Silicon Valley.
For Businesses: The economic uncertainty is bringing a slowdown in some sectors. This is why we are seeing layoffs, hiring freezes, and a lack of funding for startups. The pressure on such sectors might increase further if the COVID-19 virus causes disruptions in more countries. The union budget should focus on ensuring that the momentum in our economy either remains the same or increases for continuous growth. Any kind of deceleration can be dangerous for the vulnerable sectors, and the damage can cause a ripple effect in other sectors as well, especially with the present global outlook.
The union budget can take measures to encourage investment in startups and small businesses so that job creation is accelerated. An emphasis should be placed on digitalization as well to improve productivity and employee efficiency in private as well as public sectors. Taxation on sectors like HR Tech and IT can also be relooked to support hyper-growth. It should enable companies to be more competitive in the global markets and open new export frontiers of growth.
This union budget is coming during a critical period. It has to improve the current economic conditions, and at the same time, prepare the economy for future emergencies looming around due to COVID-19. Resilience is the key to success, no matter how difficult is the situation.
Views are personal. The author is CEO of TeamLease HRtech.
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