Advent Of Open Talent Economy

The Finance Minister has almost been unveiling piecemeal changes almost every week for the past month. The most recent one is the reduction in the corporate tax rates to what’s believed to me a reasonable slab, relative to the rest of the world. Giving it retrospective (April 1, 2019) effect is a signal that the government has undone the changes proposed in the budget earlier this year. Hopefully the initiative meets its objective of attracting investment in the country. These incremental doses of antibiotic might take a long time to revive the economy. People, particularly unemployed youth, are less worried about GDP numbers and more interested in seeing employment opportunities being created. After all, the much needed structural reforms, which economists consider to be the antidote to jobless growth, continue to be elusive.

The signs of open talent economy is all pervasive. Contract workers, once considered unthinkable in the government departments, can be seen as an active part of the government machinery across the country. This suggests the tacit acceptance of the fact that Regulatory norms of Licence Permit Raj needs to change with changing times. The government needs to quickly accept that times have indeed changed. In order to be more productive and efficient all sectors of the economy need to manage itself better – by keeping costs under check and productivity as its core value. Changes in the Contract Labour (R&A) Act seems imperative. It will improve the working condition of the contractual employees, make them employable and make employers compliant. A small step in this direction has recently been taken in introducing the Code on Social Security Bill, 2019 wherein the government has proposed to make workers on fixed-term contract eligible for gratuity before completing five years of service. One hopes this initiative brings about efficiency in the system but doesn’t increase the liability of the employers. More rationalization of provisions around contract workmen needs to be done. If the Act takes this into account by making these provisions liberal, compliance and employability might improve.

You might also be interested to read: Structural Reforms Need Of The Hour

A long pending demand of employers has been single registration across legislations. Finally, it seems to be on the right track of implementation. The Code on Occupational Safety, Health and Working Conditions (OSHW), 2019, introduced in the Lok Sabha has proposed one registration for an establishment across multiple acts.  Single registration will be coupled with single licence, along with a single return, for executing projects for five years. Once passed, it will ensure that unlike the present, companies won’t need multiple registrations under various labor laws. 

The government has proposed the Employees Provident Fund & Miscellaneous Provisions (Amendment) Bill, 2019 to amend the Employees’ Provident Fund & Miscellaneous Provisions Act, 1952. Once enacted, the EPF Bill 2019 shall amend the EPF Act in respect of few significant matters most important of which is the proposal that aims at replacing the definition of ‘basic wages’ with ‘wages’ as defined under the Code of Wages, 2019. This will cut the complexity prevalent now. The courts are inundated with cases around definitions of ‘wages’ under the Act which will be taken care once the Bill becomes an Act. It’s also proposed to introduce a 5-year limitation period for initiation of an inquiry for non-compliance under the EPF Act. It will reduce harassment and the wrongful implementation of this provision. A welcome step towards faceless investigation has got a fillip with the EPFO issuing an internal circular restricting its officers from engaging in inspection in the absence of any prima facie evidence of illegal practice by an employer of avoiding PF liability by splitting the basic wages. And finally the bill has made a progressive proposal of empowering employees to opt for National Pension Scheme in lieu of pension benefits under the EPF Act.

The President approved an amendment to the Central Civil Services (Pension) Rules, 1972 enabling the families of government employees dying after serving less than seven years to get enhanced pension. The move is likely to benefit the widows of Central Armed Police Forces personnel. 

The global economic slowdown might push our economy back by a few years. Hard measures are the only means of taking the Indian economy on a long-term phase of growth. Without sounding pessimistic, one hopes the government shuns populism and administers correct measures needed to make our economy – a sustainable $5 trillion one – where unemployment and jobless growth are not even a fallacy.