Article: Prioritize skilling, bridge the digital divide: Expectations from the Union Budget 2021


Prioritize skilling, bridge the digital divide: Expectations from the Union Budget 2021

What are some of the expectations of corporates and startups from the Union Budget 2021 when it comes to skilling, regulating gig economy, and making Indian talent employment ready? Read on to know more.
Prioritize skilling, bridge the digital divide: Expectations from the Union Budget 2021

The Budget session of the Parliament is all set to commence with the presentation of the Economic Survey of India on January 29. The Chief Economic Advisor Krishnamurthy Subramanian will present the Economic Survey 2020-21 on Friday. The survey will provide a glance at how Indian economy has progressed in the last 12 months.

Though there are no specific demands, there are certain issues that HR leaders want to address in the Budget. Like every year, skilling and employment generation have turned out to be the key expectations from the Budget for 2021-22. However, this year talent leaders also expect Union Budget 2021-22 to revive women-led businesses and skilling programs for women.

Edtech pining on formal recognition and tax sops from the Budget

Nilesh Gaikwad - Country Manager at EDHEC Business School shared, “The education sector is optimistic of Budget 2021. Among other things, this year’s budget will set the pace for implementing National Education Policy 2020. Upgradation of India’s education infrastructure will be high on cards. Government could set aside grants for fueling research-based degree programmes and specialized laboratories across institutions in tier-2 & tier-3 cities.”

He further added that hHaving proved their worth in gold during lockdown, Edtech will be hoping to get a formal recognition and tax sops from the Budget. In addition to the current schemes like free mid-day meals etc., the government should collaborate with telecom companies to offer subsidized data plans to under-privileged students taking online classes. Easy availability of funds and higher tax exemption on education loans will strengthen parents’ resolve to register their wards for higher education. In many ways, lockdown fast-forwarded adoption of technology and government should ensure we do not return to pre-2020 era”.

Dr Santanu Paul, Co-Founder and CEO, TalentSprint added that all encouragement should be provided  to entities and edtech platforms playing a pioneering role in accelerating hybrid and blended learning. 

“We need to enable home-grown edtech firms that are looking to build a strong human capital for India, as well as aspiring learners with vouchers and tax breaks,” he further added.  

As part of the upcoming union budget, it would be encouraging to both learners and edtech platforms if the government would introduce a reduction on GST for online education services, averred Krishna Kumar, CEO & Founder, Simplilearn. Also, with the need and demand for digital skilling going high, he also stressed upon the need for the government to encourage public-private partnership models with ed-tech companies at a national and state level with a larger agenda of making Indian IT workforce skill and job-ready.

Prioritize skilling, provide for reduced GST slabs

Rameswar Mandali, CEO and Founder, SKILL MONKS shared that keeping skilling as a priority, the Government must provide training institutions with financial support through the Union Budget 2021- 2022, by offering subsidies on basic infrastructural facilities, providing access to low-cost funds backed by an extended moratorium period and collateral free loans. 

Similarly, to encourage quality EdTech startups and more professionals to get into the skilling domain, the Government should look at a tax holiday for initial two years of operation. To give thrust to online training and education, more funds allocated to automate and digitise operations of training institutions will enable India to become a global hub for online education.

To ensure that skilling is prioritised the Government in this budget must provision for reduced GST slabs, encouraging young graduates and working professionals in getting skilled in a domain of their choice and stay relevant in a dynamic market environment. Additionally, the Government should look at incorporating additional sanctions to the National Skill Development Corporation (NSDC) to facilitate accelerated learning and to acquire relevant skills under Industry 4.0 domain.”

Similar views were shared by Sumit Kumar, Vice President – NETAPP, TeamLease who believes that while the past two budgets have taken strategic measures towards boosting education and skilling in India, one of which was allocation of more funds to augment the ecosystem. However much of this allocated budget still remains unutilized (close to 13% of the budget allocated in the last fiscal is unused). Firstly, we need to ensure better and optimum use of the funds which remain unused. Secondly, we need to look at creating appropriate avenues where the allocated funds can be utilized more effectively.

The budget should also take measures to fast track adoption and implementation of the New Education Policy 2020. Further, the budget also needs to introduce more stabilized regulations for Skill Universities. The industry is looking forward to the introduction of NAPS 2.0 wherein not only employers are incentivised for training through apprenticeships, but also include tax breaks to absorb trained apprentices into employment, or link it with PMRPY (PM Rozgar Protsahan Yojana) under which PF contribution for fresh hires is taken care of by the Government. This will encourage MSME sectors to engage with apprentices and other skilling initiatives which in turn will further raise formal employment.

Additionally the current license system for online education still remains too restricted. It is expected out of the budget to make the rules flexible under Digital India Initiative for Universities including Skill Universities, so that quality education is accessible and affordable. 

Recognize employment generation as a merit services

Lohit Bhatia, President- Workforce Management, Quess Corp shared that the Government’s rolling out of the New Labour Codes is a much-anticipated move that will help boost business continuity and job creation across industries, in particular MSMEs and startups. 

“In order to further supplement the job market, we encourage the government to recognise employment generation as a merit service, under the Central Goods and Services Tax Act, which would allow for a reduction in the tax slab that is currently applicable. For contract staffing firms that fulfil the manpower requirements of large companies in various sectors, operating margins are often very slim, which leads to a crunch on working capital. Lowering the tax slab on the same will free up capital for seamless operations, and help ease the compliance burdens on many companies that rely on staffing firms to meet the same,” he added.

Revive women-led businesses and skilling programs for women

“India cannot bounce back from the pandemic if it leaves its women behind. The Union Budget 2021-22 presents an opportunity to address the disproportionate impacts that women and girls have suffered,” feels Soumya Kapoor Mehta, Head , Initiative for What Works to Advance Women and Girls in the Economy (IWWAGE) at LEAD.

“Our hope is that the budget focuses on continuing cash and nutrition support for women who were among the worst affected;  and that it has room for investments that can help revive women-led businesses; for skilling programmes that respond to women’s needs and that prepare them for the future of work (including digital opportunities);  and for infrastructure investments that can help reduce the burden of unpaid work on women (including daycare centers),” she added.

The same was reiterated by Neha Bagaria, Founder, Jobsforher who shared that  as the jobs of the future become increasingly tech-based, we need to ensure women are equal participants also.  The budget should accommodate skilling programs for women to upskill themselves in the latest technologies which further helps them contribute to the country’s GDP. Also the pandemic has seen a huge increase in flexible & contract workers who will need inclusive policies, perks and benefits so that we can benefit from the wide talent of women who are seeking flexibility with arrangements.

Bridge the digital divide

Currently, "Digital divide" is a major problem. The Digital Divide refers to the gap between those able to benefit from the internet & those who are not. Government should bridge the digital divide gap, so that learning solutions can be easily accessed by everyone, shared Manish Mohta, MD - Learning Spiral. 

The Union Budget 2021 should focus heavily on creating online infrastructure & making it available till the last mile via the use of affordable smartphones, free internet and democratic distribution of technological devices. Budget 2021 will need to be of the expected up-gradation in infrastructure. Boosting ed-tech & online examination system to provide facilities of online exams across the country. 

In addition, the high rate of GST for online education and online assessments makes it expensive, thereby restricting its access to only the elite. Therefore, considering the need of the hour, the government should reduce the existing rate of GST from 18% to 5% in the Union Budget for 2021 for online assessments and education.

Similar views were shared by Neeti Sharma, Senior Vice President, TeamLease Services  who shared that India needs to re-look at the employability of the youth. For the Indian economy to get out of the post-pandemic slumber, the need of the hour is to mobilize jobs and improve skills of the youth. Union Budget 2021 needs to focus on developing a robust digital infrastructure. Furthermore , with a large part of the Skills Development budget for FY21 being unutilized or underutilized, in this budget, the government needs to create structured avenues for utilizing the funds such that skills development for the youth of our country becomes a continuous activity rather than get stalled due to certain conditions.  

Also, one of the other key aspects that the budget should look at is introducing tax relief on the CSR funds. Exempting  GST and other tax liabilities on the CSR funds will reduce the cost burden and enable more corporates to effectively use CSR budgets for initiatives such as skill training and rural workforce development.”

Vandana Luthra, Founder and Co-chairperson, VLCC Group also reiterated the same stating that higher resource allocation for improving the Skill Development ecosystem in the country would also be a welcome move. 

Provide relief to SMEs, offer certain employee rights to gig workers 

Jatin Jakharia, Co-Founder & CFO, WorkIndia- India's leading HR-tech Platform that provides jobs to the Blue Grey Collared job holders shared that among SMEs, hiring is 70% of pre-covid levels, implying SMEs haven't been able to still recover. SMEs are the heart of India; Govt can do more to provide more relief so that economic activity among the SMEs increases, which leads to more job creation and which in turn leads to more hiring in the blue collared segment (almost 23.7 cr in India).

Sandeep Sinha, Founder & Managing Partner, Lumis Partners felt that given the meaningful labour market pressures; a mutated recovery majorly led by profits and over 18 million job losses, the budget is a key opportunity to not be complacent and build on the pandemic-era momentum. The bottom 20% of the pyramid have experienced an enduring jolt due to job cuts and which will have a recurring effect overtime. Job creation is that node of the demand supply network which keeps the wheel spinning.

With India emerging as the 5th largest country for flexi-staffing; digital platforms enabling employment creation and expanding consumer base for on-demand services at the tailwinds of cost cutting and affordable skilled workforce availability, the budget must build on recent reforms in labour and education and the government should continue to provide policy as well as financial support for skilling to ensure that the workforce in India is future ready. One place where India Inc is looking for clarity from the government is on Wage code implementation and regulation of the gig employment model.

Thus, there is a need to strike a balance between flexibility and security. One solution could be a push from the government to offer certain employee rights to the gig workers which secures them about their future. Another could be to promote platforms which are in the business of offering such benefits to gig/ contingent workers.


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Topics: Skilling, #Budget2021

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