Jobs: No Perks Here
Soothing policies aren’t adequate, given the measure of jobs crisis India is facing
Photo Credit : Shutterstock
Going by the government’s fifth Budget, one would think that PM Narendra Modi might have forgotten his widely promoted electoral promise. Budget 2018 has missed the opportunity to focus on job creation. Not just this year, but, the Centre hasn’t shown greater commitment to job creation even in its last two Budgets — 2016 and 2017. Budget 2015 was certainly a progressive one with most of the proposals boosting ‘Make in India’ with an aim of making India a manufacturing hub.
Currently, around 10 lakh young job seekers enter the market every month. According to the government’s own figures, only 135,000 jobs were created in 2015 — the lowest total in seven years and 67 per cent lower than the number created in the last year of the previous government.
Dissecting the Budget 2018
Quoting an independent study while announcing the Budget, Finance Minister Arun Jaitley said that the measures taken by the government have started showing results and a recent study has shown that 70 lakh formal jobs will be created this year. However, human resource experts do not agree. “Formalisation of jobs from unorganised sector to organised sector should not be treated as job creation. Even in this Budget, there appears no clear direction on expenditure for creating jobs and this might stay as a declaration only,” says Subramanyam S., CEO of Ascent HR.
The industry has also criticised the reduction of women’s EPF contribution to 8 per cent in the first three years. “There is no reason to cheer the move because women employees are not lacking net pay as the only driver for their first three years in employment. They hardly get married given the current trends during that period. On the contrary, PF is a great investment given its current return on investment as good small savings, which should be encouraged and not dissuaded,” adds Subramanyam.
Moreover, the proposal to amend the EPF Act to provide a specific reduction of the EPF contribution rate for women employees for a period of three years appears to aim at appeasing the significant female workforce in India.
Indian Staffing Federation, an apex body on flexi staffing industry has highlighted that among the several asks of the association, one of the requirement was a step towards ease of doing business and to promote entrepreneurship labour law compliances across the country. “We need these processes to become paperless, presence-less and cashless. There hasn’t been any significant announcement in this regard,” said Rituparna Chakraborty, president, ISF.
The Indian arm of US-based search engine for job listings, Indeed, too points out that while there was anticipation about the new employment policy, there was no indication of a formal policy being announced anytime soon.
“In addition to improving employability, the need of the hour is to modernise the Indian hiring industry through a more advanced platform that caters to the evolving requirements of job seekers in the 21st century,” says Sashi Kumar, MD, Indeed India.
Palliative Policies to Create Quick Jobs
With the job market opening up for contract workers, recruiters expect creation of 2 lakh job opportunities immediately. “I am happy to announce that… the facility of fixed-term employment will be extended to all sectors,” Jaitley said during his Budget speech.
Relaxation of minimum fixed employment term from 240 days to 150 days has been termed as an innovative move to generate more jobs across the industry, especially footwear and leather. “This will boost contractual workers and companies would immediately dole out about 2 lakh vacancies,” said Sunil Goel, managing director of a staffing firm, Global Hunt.
Gayathri Vasudevan, CEO, LabourNet appreciates the efforts of government with a pinch of caution. “I hope the next step forward will be to set up a brisk execution mechanism to take things forward, which might prove to be the next big challenge for the government.”
Recapping Budget 2017 and 2016
During 2017, the idea of the budget was also an exercise to do damage control considering that how gravely the centre’s decision to demonetise 86 per cent of India’s currency had hurt the economy.
The Centre for Monitoring Indian Economy, a think-tank that tracks business and economic data, believes that 1.5 million jobs were lost in January-April 2017, a likely result of demonetisation. Another study by the All India Manufacturers’ Organisation (AIMO) in January had projected a 60 per cent drop in employment and a 55 per cent loss in revenue before March 2017.
Recruiters also discouraged government’s move to prune corporate tax rate for small companies to 25 per cent but the tax for larger companies remained at 30. The move was labelled as “the one which encourages companies to remain small.” During 2016, the government announced an ambitious tax revenue target which was expected to impact the job market.
While Budget 2018, too, hasn’t given much joy to the job market, probably efforts and luck are something the candidates need to depend on.