Budget 2022: From regulatory relaxations to spending boost, what HR sector hopes for
The Indian economy is on the road to recovery after some forgettable quarters of negative GDP growth affected by the COVID-19 pandemic. It is imperative that besides the usual expectations, many are hoping that this budget will provide a much-needed boost to the HR sector, especially in the form of regulatory and taxation relaxations, along with spending boosts to help the industry get back on track.
With the upcoming budget, the industry anticipates improvements that will be helpful to employees and the employment process of each company that is firmly established. In addition, the forthcoming budget is expected to place a strong emphasis on job development and skilling through the Digital India mission.
Employee-related tax reliefs and other benefits
As we observed, the significant breakout of COVID-19 in early 2020 altered the working patterns of every company in the world. The new work-from-home culture has arisen, and it has unquestionably increased the cost of an employee's expenditure. Previously overlooked bills such as office stationery, whole-day electricity costs, and internet bills, have now entirely shifted to the employee’s wallet, increasing their overall spending.
According to reports, employees are expected to experience more "work-from-home related expense", which means the company must offer finances and allowances to satisfy basic demands, and it has to be considered by income tax regulations.
Considering the high medical costs that most employees have incurred amid COVID-19, the HR industry expects a tax reduction in this area of concern. It also anticipates increased deduction limits, such as Section 80D, covering paid medical insurance premiums, and various other improvements in the health insurance sector (as effected by IRDA). The focus shall be to enhance coverage and include treating critical illnesses within a shorter waiting period.
Some tax experts also urge the government to allow tax deductions for medical expenses for employees who have been affected by COVID-19. It also anticipates an additional Rs 50,000-100,000 tax reduction for workers who work from home.
Talking about the new schemes, the Indian government has launched the Aatmanirbhar Rozgar Yojana, a new initiative. During the COVID-19 pandemic, the Aatmanirbhar Bharat Rozgar Yojana was introduced to encourage employers to increase employment while providing social security benefits and re-establishing lost jobs.
The sector expects further addition to this initiative wherein the government recognises employment generation as part of ‘merit services’ so that the GST rates currently applicable on the segment could be reduced (up to 0 percent), thereby benefitting a wide range of stakeholders.
Skill development and increased employment opportunities
The financial outlay must increase to stay up with the rate of technological advancement and the people's ability to learn new skills. Artificial intelligence, machine learning, and data science are examples of new-age technologies that have witnessed significant growth over the years and require stable funding to reach the people in need.
It is also believed that the union budget will be more focused on the country's economic recovery by concentrating on areas that ensure a stable financial situation even in the face of a pandemic, such as employee welfare and job development.
According to the India Skills Report 2021, India's youth's employability fell 45.9 percent in 2021 from 46.21 percent in 2020, and 47.38 percent in 2019, owing to the loss of skilling over the previous two years. It demonstrates the importance of working on the skilling programme in conjunction with the Digital India Mission, ultimately contributing to job development.
There is an anticipation of a new Labour Code, which will help in boosting business continuity and assist the MSME sector in job creation and skill development. It is expected that the new labour code will help in better relationship management and improved transparency between the parties (employer and workers), especially safeguarding the interests of contractual workers and the unorganised labourers.
However, the greatest challenge in a labour-surplus economy such as India would be to take care of the unorganised sector.
The country had recently seen migrant workers crisis during the first wave of COVID-19. Hence, an effort to consolidate the existing labour laws (including the unorganised sector's interest) through a comprehensive ‘Code on Social Security’ shall be something eagerly anticipated by the HR sector.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)