By Rituparna Chakraborty
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-lakh crore shortfall taxes, we propose three non-fiscal flick-of pen reforms for formal job creation and employability;
1. 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 in
2. 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 modernisation 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.
3. 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.
(Author is Co-Founder & Executive Vice President, TeamLease Services.)