Union Budget 2021: Budget must focus on formal job creation

Indian Union Budget 2021-22: The Budget must build on recent reforms like labour and education to grant choice to our firms and citizens to improve their productivity, says Rituparna Chakraborty, co-founder & executive vice-president, TeamLease Services.

“We propose three non-fiscal, flick-of pen reforms for formal job creation and employability,” she says.

One, make employee contribution to provident fund voluntary: Mandatory payroll confiscation levels that are higher than savings rate breed informality. Making it voluntary will accelerate the current cycle of enterprise formalisation. This money belongs to employees and it is prudent to give them the freedom to choose how to invest it.

Two, modernisation of ESIC, India’s largest health insurance programme: ESI has been missing in Covid-19 because of governance that is too large, old and unrepresentative. The Budget should announce modernisation of ESI governance in parallel with a June 1, 2021, deadline so that employees have the freedom to opt the service provider for their payroll deducted health insurance contributions.

Three, 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. It must also announce a cross-ministry compliance commission tasked with rationalisation, digitisation and decriminalisation of India’s regulatory cholesterol of 65k+ compliances and 6.5k+ filings and issuing a single ‘universal enterprise number’.