Article: Union Budget 2021: Hits and Misses


Union Budget 2021: Hits and Misses

While the Union Budget 2021 introduced many significant measures in areas of skilling and recognizing the gig economy, yet it was felt that the edtech and skilling industry was left wanting for more. Read on to know what were the hits and misses of this budget as per industry leaders.
Union Budget 2021: Hits and Misses

Reinvigorating human capital was one of the six pillars on which the Union Budget 2021 rested. In this direction, Finance Minister Nirmala Sitharaman announced significant measures in two areas particularly - one in the area of education and skilling and the second in the area of recognizing gig workers.

As far as skilling is concerned, the FM announced introducing the legislation this year to implement the setting-up of a Higher Education Commission of India, along with other measures such as proposals to amend the Apprenticeship Act for providing post job training of graduates and initiatives with UAE and Japan to benchmark skill training. 

Meanwhile, for gig workers, the FM announced the proposal of launching a portal for gig workers, building and construction workers, among others, to help formulate health, housing, skill, and insurance credits and other such support schemes for all migrant workers. Other measures include extending social security benefits to gig and platform workers for the first time, allowing women to work in all categories by providing adequate security for night shifts, and making minimum wages applicable to all categories of workers, covered under the Employee State Insurance Corporation. 

But how strong are these measures to boost skilling and the gig economy? Are they enough? Here’s what industry leaders had to say.

Big measures for gig workers

Sahil Sharma, Co-Founder & CEO, GigIndia believes that the initiatives around gig workers will provide a shot in the arm for gig and platform workers, given the decision to extend social security benefits to this cohort. Moreover, they would be now covered under the ESIC (Employee State Insurance Corporation) scheme since minimum wages will apply to all such workers. Also, the new portal for collecting data of gig employees, migrant labourers and construction workers, will prove useful in providing gig workers with health and insurance facilities.

Taken together, such measures will streamline the gig economy, transforming it into a more organized sector. Consequently, this should help attract more talent in the coming days.

The same was reiterated by Lohit Bhatia, President - Workforce Management, Quess Corp who shared that setting a benchmark for the minimum wage and creating greater opportunities for women’s participation in the workforce is an encouraging step for the betterment of the workforce while reducing the compliance burden on businesses will further boost job creation.  

That the step is a major step towards creating an equitable and sustainable workforce, was also reiterated by Sashi Kumar, Managing Director, Further, it will add stability for this segment, believes Sandeep Chaudhary, CEO, PeopleStrong.

Pooja Ramchandani, Partner, Shardul Amarchand Mangaldas & Co. also believes that the step is a very significant change. Up until now, there was no such protection under labor law.  

Also, the Government may set up toll-free call centers or helplines, or facilitation centers (a) to disseminate information on the social security schemes; (b) to help with the processing of application forms for registration and enrolment in the social security schemes. So, these categories of workers will be in a better position than before in relation to health, welfare, and retirement benefits.      

The launch of an online platform for gig workers will likely ease the process of work also, given that the budget continues to keep the focus sharp on digital transformation and the next phase of economic recovery after the COVID-19-induced market recession, believes Mishu Ahluwalia, COO & Investor Relations at KIWI, a real-time freelancing platform.

But mere reiteration of measures, no financial allocation

However, Prof. K.R. Shyam Sundar, Professor, HRM Area at XLRI, Xavier School of Management, Jamshedpur points out that the Budget has merely reiterated the legislative measures such as universal minimum wages, night shift in all sectors for women workers, social security for gig and platform workers, etc.

There is not any financial allocation made in the Union Budget for them to assume a sense of relevance.  

For example, the social security fund or a skilling fund (given the huge magnitude of job losses and the technological challenges) and some DBT – then they assume budgetary significance. For example, what is the budgetary allocation for aiding the electronic system of labor administration that has been envisaged in all four Labor Codes? Does it not need funds for both the Central and the resource-constrained state governments? Lest these run the risk of degenerating into platitudes.

Skill development gets a push but is it enough?

Focusing on the skilling initiatives, Yogita Tulsiani, Director and Co-founder iXceed Solutions (A Leading Tech Recruitment Provider) believes that the Union Budget 2021 has focused on skill development by tieing up with countries like Japan and UAE and this would help in the overall development of the Human Resource sector. 

Similar views were shared by Sandeep Wirkhare, MD & CEO, Indian School Finance Company who believes that overall, the budget had well thought out six pillars for growth. Though the education sector would have expected higher allocation or specific measures for schools & education infra financing institutions given the pandemic overhang, but setting up 15,000 model schools under NEP is positive and will go a long way in channelizing energies in the desired direction to enhance much-required quality in education. 

Vandana Luthra, Founder and Co-chairperson, VLCC group shared that for her personally, it is gratifying to note that two of the six pillars on which the budgetary proposals rest, are 'Health & Well-being’ and 'Reinvigorating Human Capital’. Both Health and Skill Development are critical sectors that will ensure our sustained economic growth.

“Expanding collaboration with foreign countries to scale up the vocational and skill training sector will further improve the employability quotient of our youth,” she further added.

Improving employment opportunities at the higher educational level by allocating INR 3000 crore in National Apprenticeship Training Scheme is a palpable consideration in the Union Budget 2020-21, for students from both non-science and technology streams, felt Rameswar Mandali, Founder & CEO, SKILL MONKS. As per him, this will ensure that skilling is prioritized and enable students to be future-ready, in the domain of their choice and stay relevant in a dynamic market environment.

The decision also received a thumbs up from Krishna Kumar, CEO, Simplilearn who believes that it is definitely a forward-looking proposition aligned with improving employment opportunities for students pursuing different disciplines. 

However, he felt it would have been encouraging if the government had introduced a reduction on GST for online education services, with learners and teachers alike taking to online skilling programs in view of the demands of the “new normal”. 

Similarly, Mohan Lakhamraju, Founder & CEO, Great Learning also believes that the decision will help create talent that is employable and equipped with the right set of skills for the industry ensuring professionals are job-ready. 

“The moves to join forces with UAE to benchmark skill qualification and introduction of collaborative training programs with the Japanese workforce are also steps in the right direction. This will help us keep our skilling endeavors in sync with global trends,” he further added.

Ramananda SG, Vice President, Sales & Marketing, Pearson India also averred that he was confident that ‘The Apprenticeship Act’ by the government will improve opportunities for students further helping them to progress and become employable. However, all eyes are on its execution to bring about a deeper transformational shift and accomplish the objectives of an inclusive and excellent education system. 

But no relief from the GST burden 

While most initiatives related to skill development were welcome, the one place where the budget lacked was that it doesn’t mention the distress in education and skilling space, shared Vikram Kumar, CEO, Lrnable Group, which offers content, L&D, skilling and upskilling, and assessment platforms. 

“Hopefully the fine print of Union Budget 2021-22 will give clarity on the outlay in higher education and skilling space,” he added.

Vikram also felt that the funds announced for skill development are insufficient.

Though the government made a positive move by increasing the number of universities, amendments in the apprenticeship training scheme and training scheme, this may not be enough for the World’s largest young population with 600 million people under the age of 25 years.

A similar view was endorsed by Ahaan Aggarwal, Founder & CEO Junoon who felt that the budget could have been more focused on skill development and job creation as it is an urgent need of the hour.

Dr. Santanu Paul, CEO and Managing Director, TalentSprint.also felt that the government failed to pay special attention to edtech firms that performed extremely well during the pandemic and were revenue drivers. Platforms promoting hybrid and blended learning will play a pivotal role in accelerating reach in tier 2/3 towns and the government should have taken cognizance of this and provided special incentives. 

This insufficiency of funds allocated was also pointed out by Nitin Potdar, Partner J. Sagar Associates who shared that while an allocation of Rs 3,002.21 crores to skill development ministry and its various programs is a welcome step but not sure whether that's enough given the current pandemic and need to create a digital infrastructure for education.

Similarly, there was a disappointment due to no relief from the burdensome 18% GST on the Edtech industry which is doing a massive job of educating the next generation.

Ultimately, while the government’s intentions seem to be in the right place, only further action on the implementation of these plans will show whether these small action points can lead to a high impact on the skilling challenges of our country.

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Image source: Moneycontrol

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Topics: Skilling, #Budget2021

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