Enough signals manifesting the slowdown in the Indian economy have been apparent over the last few quarters. Sensex had dropped 7% since the budget on July 5. Auto sector has been reeling under severe pressure. Retail investments were invisible. The brand, which many of us associate with – Parle G – has decided to cut ten thousand jobs. It was opportune time the government intervened. And it did. Finance Minister Nirmala Sitharaman yesterday announced a stimulus package to boost the economy. BS-IV vehicles will now remain operational throughout their life. Till March 2020, 15% additional depreciation (over the existing 15%, thus making it 30% overall) has been granted to the auto manufacturers, thus, giving the much-needed fillip to the sector. A temporary reprieve indeed! The government has also decided to buy more cars. One hopes the dwindling consumer demand coupled with the easy availability of tech-driven vehicle aggregators doesn’t play spoilsport. With the infusion of Rs 70,000 crore into state-run banks, the government has ensured liquidity in the markets and support to NBFCs. Banks have been asked to pass on the rate cut benefits to all home and auto loan consumers to enhance consumption and set the multiplier effect in motion, thus, immediately boosting sentiments in the housing and auto sectors. Surcharge on capital gains introduced in the budget has been scrapped for domestic and foreign investors. There won’t be angel tax on start-ups. The surcharge on foreign portfolio investors (FPI) had led to pulling out of $3.4 billion from the markets and it has rightly been dropped. This was a contentious provision as it impacted FPIs structured as trusts. The decision to expedite and clear GST refunds in 30 days will boost exports and enhance ease of doing business.
A single definition of what constitutes an MSME and the decision to clear their arrears expeditiously will help reduce stress in small businesses. A 100 lakh crore plan for infrastructure will be activated. The Finance Minister signaled that more measures are in the offing and will be shortly announced.
The woes of ever-ailing national carrier continues. The oil marketing companies informed Air India of their decision not to supply air turbine fuel at six airports owing to Rs. 5,000 crore dues. The airline has asked the government to bail-it out by doing Rs. 2,500 crore. Air India is already sitting on Rs. 60,000 crore debt and liability. Any further financial support will only add to the burden on the exchequer without any assurance of turnaround. The government must take prudent steps focusing on reviving the economy and get rid of white elephants through prompt disinvestments of laggards among the PSUs and government-owned corporations.
On 21st August 2019, the EPFO, took a decision benefiting over 6 lakh pensioners by restoring commutation of pension. This provision was withdrawn in 2009 and would now benefit those pensioners who had opted for commutation and got a lump-sum amount at the time of retirement prior to 2009. This policy change will restore the commuted value of pension to pensioners after 15 years of drawing commutation. It will go a long way in safeguarding the post-retirement future of these beneficiaries.
I’m happy to share that India Employer Forum (IEF) that successfully hosted its first conclave on 21st, August, 2019 at Bengaluru on the contemporary topic, ‘Reimagining Human Capital’. TeamLease was the knowledge partner for the event. Manish Sabharwal, Co-founder and Chairman of Teamlease was the keynote speaker. Manish provided substantial insight on the changing employment scenario in India and how reimagining human capital may prove to be a medium of achieving the goal. Rituparna Chakraborty, Co-founder and EVP of TeamLease, moderated a panel on the topic and the panelists were Amit Sharma, VP – HR, Volvo Group India, Ivy Lenet Saldanha, GM & Head HR, Tata Power SED, Kishore Sambasivam,VP – HR & CHRO, OnMobile, Dr Pallab Bandyopadhyay, an HR practitioner and academician, Pallavi Bhadkamkar, VP, HR of HealthCare Global Enterprises Limited, and Shalini Pillay, Office Managing Partner for Bangalore, KPMG India. The panelists shared perspectives on the various dimensions shaping human capital in the future. The IEF will shortly take the conclave to Mumbai and Delhi.
Editor- India Employer Forum