Budget 2018: Here’s what India Inc. had to say
The last full budget before the General Elections of 2019 was announced yesterday. It has evoked a wide range of responses from different stakeholders. Here’s a quick look at what leaders and experts have to say with regard to the various proposals of Budget 2018:
On Job Creation and Impact on Workforce
Ms. Rituparna Chakraborty, President, Indian Staffing Federation
“We had three specific asks to drive formal job creation from this year’s budget:
A) Reduce the gap between chittiwali tankha and haathwali tankha by reducing the burden of mandatory deductions and give more in the hands of employees – This has been addressed by FM’s proposal of Government contributing 12% of wages to EPF for new employees for three years across all sectors. While our recommendation of allowing salary choice might have been more effective in the long run, however, this is good move to drive immediate formalisation of jobs.
B) Our second expectation was creating a Universal Enterprise Number – a sort of Aadhar for enterprises – by which a single number would replace the 25+ number every enterprise should have to operate as a legitimate business in India. It’s heartening to hear that Government shall evolve a scheme to assign individual enterprises a Unique ID just like individuals have Aadhar.
C) Our final ask was towards ease of doing business and to promote entrepreneurship labour law compliances across the country needs to become Paperless, Presence-less and cashless. There hasn’t been any significant announcement in this regard.
Overall a score of 2/3 is encouraging towards the process of creating more formal jobs in the country. The budget scores high on our immediate priorities of formalisation, urbanisation, and industrialisation (the specific impetus for MSME and Startups) however it is muted around skill development and human capital. Noteworthy is the government’s focus on greater inclusion of women in the workforce and clearing the air on the legitimacy of fixed-term employment across sectors.”
Gayathri Vasudevan, CEO & Co-Founder, LabourNet
“The freshness of this year’s budget is in addressing the rural population. In my view, the budget has rightly addressed this to a large extent. Relaxation of minimum fixed employment term from 240 days to 150 days comes as an innovative move to generate more jobs in the footwear and leather industries, which was otherwise limited to the textile industry so far. Reduction of EPF to 8% and extension of maternal leaves come as good news to employed women and is an evident sign of a women-friendly budget. The substantial focus of agriculture is to increase rural income, thereby resulting in an increase of farm-based employment opportunities. Overall, on an employment generation perspective, nothing new in this budget except for taking forward what has already been introduced. However, the consistent effort to increase employment opportunities is commendable.”
Mr. Sashi Kumar, Managing Director, Indeed India
“While there was anticipation about a new employment policy, there was no indication of a formal policy being announced anytime soon. However, it is heartening to hear that there have been 70 lakh formal jobs created in the past year and that the government plans to spur job creation in the country through various incentives and reforms that were announced, such as the EPF contribution. Additionally, the EPF reprieve for women employees will improve the female participation rate in the Indian workforce. It is particularly gratifying to see that the government is also taking steps to tackle the issue of talent gap due to a lack of adequate skilling. Given the thrust on reforming the education system, it is safe to say that we will be seeing a much more equipped potential workforce. In addition to improving employability, the need of the hour is to modernize the Indian hiring industry through a more advanced platform that caters to the evolving requirements of job seekers in the 21st century.”
Abhiraj Bhal, Co-Founder, UrbanClap
"Fundamentally, the government should focus on 4 pillars to spur job creation. These are investments in core infrastructure, regulatory ease, impetus to manufacturing and accelerating upskilling in our services sector... This four-pronged approach can help India's GDP grow at 8-10% per annum, emerging from a low-income economy at $1900 GDP per capita, to a middle-income economy at > $5000 GDP per capita by 2030. I am glad the government recognizes this and has given it enough attention in this budget."
Priya Krishnan, Founder & CEO, KLAY Schools:
"Despite all the benefits provided during the last fiscal to promote women's inclusiveness at the workplace, the lack of any mention of support in the Budget 2018 to corporates that provide these benefits to women is disheartening. It does not do anything to promote women's employment. This will further increase the discrimination against women's employability and make it difficult for companies that are striving for gender equality... The government's decision to reduce a woman's contribution to EPF to 8% from 12% for the first three years is a notional change where the increase in take-home salary still comes out of women's savings. This still doesn't address how the government can help subsidize the cost of high-quality childcare for mothers."
Anshul Prakash, Partner, Khaitan & Co.
“The proposal to go out of pocket in respect of the 12% contribution mandated under the EPF Act for all ‘new employees’ across sectors for a period of first three years, is a populist move aimed at appeasing the younger workforce... Furthermore, 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. The industry may have to struggle with structuring the staff salaries accordingly from a cost to the company perspective. The modalities will have to be looked into considering that the employer will be required to contribute at the extant rate of 12% against 8% proposed for the women employees.”
Ms. Sonal Arora, Vice President, TeamLease Services.
“The decision of the govt. to contribute 12 percent of wages of new employees in employee provident fund for all sectors for the next three years will help in bringing more employees in the formal sector to some extent and increase job creation. The govt. footing at-least a part of the employers’ contribution bill should encourage more employers to adhere to compliances and increase formalization of the MSME sector... With respect to bringing down the contributions from women employees will be brought down from 12 % to 8 %, one does hope that employers will pass on the benefit of lower PF contribution rate to the employee by way of increased take home ( as against reduced CTC. ) Maybe, the govt. could also have considered contributing an additional differential amount of 4 % for women employees.”
Education and Learning
E. Abraham S.J., Director, XLRI- Xavier School of Management
“We welcome the education-sector related budget announcements. Setting up more Eklavya schools for tribal children and allocating funds for migrating from Blackboard to digital board and most importantly treating education holistically with integration of "class 2 to class 12” are steps in the right direction and will help school-going students in rural and urban India in the long-run, especially as we are increasingly moving towards a digital economy. Also, the decision to allocate Rs. 1 lakh crore over 4 years for infrastructural upgradation in educational institutions will give a much-needed impetus to Research and Development activities in the realm of higher education.”
Association of Publishers in India (API)
“It is commendable that the government has given a significant focus on education and digitalization. We whole-heartedly welcome the Government's plan and focus to move classroom blackboards to digital boards. This will help immensely in standardizing and ensuring teaching content and quality and increasing outreach particularly in rural areas where there are impediments such as teacher availability and teaching materials... We also welcome the emphasis to be given to the training of untrained teachers and allocation of 1 lakh crore for education research. It's also very commendable about the plans if coming up with 24 new Medical Colleges. Also, praise-worthy is the plan of at least one medical college every three constituencies. However, the government further increased the education cess by 1 percent which will be a blow to the middle class.”
Arun Rajamani, Country GM, Pluralsight India
“India has been slower to adopt technology in learning than other countries. We have observed that technology-led learning is highly effective in closing the skills gap. It is encouraging to see that the Finance Minister has announced an initiative to digitize teaching methods in India.”
Ratnesh Jha, Managing Director, Cambridge University Press, South Asia.
“This is a balanced budget as far as education is concerned. While on the one hand, the government has rightly focused on improving educational infrastructure in the country, there is also a clear intent to strengthen capacity building through improvement in teacher training. The decision to treat education holistically without any segmentation is a welcome move and will lend greater synergy in planning and execution of important schemes and programmes. This is also expected to help smoothen the process of mapping learning outcomes with curriculum across all levels. It is also heartening to see a greater emphasis on the all-important area of teacher training which will help in achieving the target of training all teachers by 2019. With a focus on increasing digital intensity in education, the budget is quite futuristic as it looks to address the needs of today’s India emerging as a powerful knowledge economy.”
Dr. Kiranmai Dutt Pendyala, Corporate Vice President, Global HR Operations, AMD
“Union Budget 2018-19 with 2x allocations towards ‘Digital India’ is the right step and will further bolster our investments and focus on Artificial Intelligence, and Machine Learning which is paving the path for the next major technology disruption. The PM fellowship program to pursue Ph.D. at IIT and IISC will help build innovative engineering talent in India"
Col. Rajendra Prasad Nadella, CO-FOUNDER, MANAGING DIRECTOR, iScholar
“Education for once got due attention from the finance minister in the budget speech. Mr. Jaitley acknowledged that technology will be the biggest driver in improving the quality of education. Among other major announcements are Eklavya schools in tribal districts on the lines of Navodaya schools, integrated B.Ed, an initiative for teachers training. The announcement of five lakh WiFi hot-spots in rural areas will enable access to high-quality education to even rural regions of the country.”
Gaurav Burman - VP & Country President, India, 75F
"I had imagined more emphasis on technology adoption and support for startups in areas such as AI and IOT in this year's budget. While the allocation to digital India has increased, there could have been a more focused outreach to encourage the country's entrepreneurs. India needs more of 'Make in India,' and I believe that can only come from our entrepreneurs' building companies from India and catering to the world. Technologies like AI and IOT are bound to revolutionize the way we operate, and India should become an early adopter to stay ahead of the technology race. Furthermore, the startup sector could have also benefited from the dissolution of the angel tax introduced by the government previously and further extending the tax holiday period for companies to help them achieve a certain scale. "
Kunal Kislay - CEO & Co-Founder, Integration Wizards
"The lowering of corporate tax directly increases the available capital with startups that can be used for funding R&D to compete with the best in the world. In this budget, the government has taken a positive step in announcing the NITI Aayog initiative, a national programme to conduct research and development in areas like machine learning, artificial intelligence, and other futuristic technologies... I think the steps taken by the Indian government by increasing allocation to digital India in this current budget will also empower startups further... With this initiative, the government can also look at steps to boost manufacturing... Furthermore, Indian start-ups can lend a hand to NITI Aayog, since they have a distinctive idea about how a country like India works - in terms of demographics, social fabric and also government processes can devise a better strategy for implementation of AI and Machine learning."
Mr. Ravindra Agrawal, M.D and Promoter, KisanKraft
“We welcome the overall budget 2018-19 and appreciate the efforts of the government for refactoring MSP, the idea of gramin rural market agencies, an extension of Kisan credit to fisheries and for animal husbandry, etc. It’s definitely a pro-agriculture Budget this time... However, clarifications with regard to the cost of production and if it is in line with Directorate of Economics and Statistics definition from A1 to C2 are needed. Additionally, there was no mention of reduction in GST for farm inputs like pesticide, fertilizers, fuel and farm mechanization products, etc. No details were given on the measures taken for agricultural infrastructure like dams, canals and irrigation infrastructure to reduce farmers’ dependence on rains... We highly appreciate government's emphasis on generating higher incomes for farmers, by helping them produce more with lesser costs involved.”
Housing and Real Estate:
Aniket Haware, Managing Director, Haware Builders
”… The focus on the growth of Smart Cities, digitization, sustainability, and the provision of basic utilities shows an ongoing commitment towards expansion. The budget also highlights the formation of additional construction and urban development bodies to fulfill the much-needed skill gap in the environment. The additional commitment to affordable rural housing is also a welcome addition... Affordable housing, where the real deficit exists, saw an encouraging boost with the creation of a dedicated Affordable Housing Fund by the National Housing Bank (NHB) to address the issue of funding constraints faced by all stakeholders. (But) GST rates should have come down for real estate that would have helped middle-income groups from pricing point. Except tax benefit for the slab from 2.5lakhs to 5 lakhs, no announcement has been made related to Housing loan, interest rate, etc.”
Sudeep Anandapuram - Co-Founder & CEO, Zippserv
“I envisaged more sops for the real estate sector which was hit hard by demonetization and some policy reforms like the implementation of RERA and GST. However, it has been balanced with the emphasis on Agriculture, Education, Infrastructure and healthcare which will help boost growth. Companies will have to keep faith in the fact that there is a stable government in the Centre and that the markets are performing well. Increasing wifi and broadband access in rural markets are also a step in the right direction to infuse growth in these regions".
Pankaj Bansal, Founder, PeopleStrong
“We feel it is a very positive budget. The kind of push the government has given to "formal employment" and healthcare initiatives has been long overdue. Initiatives pushing infrastructure development, healthcare facilities, corporate tax reduction will create a positive push for formal employment creation. Also delighted to see government's push for digital with the adoption of AI and Blockchain.”
Sachin Gupta, CEO, and Co-Founder, HackerEarth
“The budget’s focus on healthcare and agriculture indicates that it’s largely structured to benefit the rural economy. There are few initiatives that impact corporate India and even fewer aimed at startups. However certain initiatives aimed at employment such as PF contribution by government and talent development through education grants are highly welcome... The move by the government to focus on technologies like AI, IoT, Big Data and others through Digital India is appreciated.”
Paul Dupuis, MD, and CEO, Randstad India
“Budget 2018 is a holistic one with the Government selecting a combination of benefits, targeted spending and fiscal prudence to put the Indian economy on an accelerated growth trajectory. The lion’s share of the attention has gone towards revitalizing the stressed rural sector... The Finance Minister’s special emphasis on Healthcare & Infrastructure spending will help boost economic growth and consequently aid in job creation. In addition, steps towards relieving the pains of the MSME sector through tax sops and easy access to credit from banks should bode well for job creation given the critical role the sector plays. While the Government’s effort to skill 1.3 million teachers is laudable, the skill development plank was lacking in detail, both in terms of outlay and programs targeted. That being said, the INR 3,073 Crores allocated towards the Digital India campaign with specific investments to be made in up-skilling professionals in new age technologies like cyber-security and robotics was a welcome move.”
Mukesh Agarwal - Founder & CEO, RevX
"In this budget, I think the impetus for rural infrastructure, focus on digital India and increase in funds allocated for education and healthcare among others are steps in the right direction. It is no secret that India is a supply constraint market, and can’t achieve its growth targets unless structural improvements are made to increase the supply of goods and services. The lack of proper infrastructure is the main impediment to bringing efficiency and scale in the supply of goods and services. And I believe the budget has addressed most of these concerns keeping long-term goals in mind.”
Neeraj Dotel, Managing Director, India, and SAARC, SAP Concur Technologies
"The budget FY 18- 19 did not have many surprises, but must say some of the initiatives are quite welcoming. The government is quite bullish on Digital India & Green India Mission. We see an increased focus on compliance and reduced time for filing tax and dependency on paper receipts, which will help propel the business processes. We also laud the initiatives towards the national programmes focusing on R&D and innovation and the increased focus on AI, ML and data sciences... Ease of doing business with a focus on MSMEs and increased rural lending capacities by the Banks and Institutes are clearly high on this year’s agenda. The MSME sector getting Rs 3,794 crore in the form of capital support and interest subsidy is a welcome change.”
Sanjay Bahl, CEO, and MD, Centum Learning
" For the most part, the Finance Minister has presented us with a conducive environment by creating policies that would lead to skill development and employment generation... The focus on digital education is a very positive step towards Digital India... The Finance Minister has rightly recognized the most critical aspect, which is taking a step towards technology-enabled learning solutions... The launch of Sankalp to skill youth and increase of Pradhan Mantri Kaushal Kendras will give major impetus and thrust to the skill development movement in India. The initiative to establish India International Skill Centres to offer advanced training and courses in foreign languages will not only help our skilled manpower to seek job opportunities outside our country but also make these skilling programs aspirational. One of the areas which we were looking forward was GST exemption on all skill development programs. But looking at various other announcements supporting the skill development arena, I would like to congratulate the Finance Minister for a very forward-looking budget."
Watch this space for more detailed coverage of the Union Budget 2018.
(This is the seventh of an eight part-series of the People Matters: Budget 2018 Series)
In case you missed, here are the Top 10 Budget 2018 Highlights