With a new central government taking over, hopes of reforms benefiting the nation is again getting revived.
- By Rituparna Chakraborty
With a new central government taking over, hopes of reforms benefiting the nation is again getting revived. Our country, endowed with demographic dividend, is at the cusp of phenomenal growth. Democratic ideals, coupled with the availability of massive talent pool, is a perfect recipe for sustainable development, provided the government policies act as a facilitator and catalyst. Structural and labor reforms are imperative precursor to job creation. The expectation from the new dispensation is to move quickly on the reform agenda. Let’s see how we can do better on the following:
Make in India was rolled out last year but it did not result into the number of jobs which manufacturing sector is capable of creating in the country. Instead of the wide belief that all jobs that get created have to be done by the government, the latter should play the role of facilitator by easing laws and regulations which removes the regulatory cholesterol from the path of private sector, leaving it to grow and generate employment. Hence, it’s imperative to reform labor laws and prioritize the ease of doing business.
Policy on Ease of Doing Business (EODB)
We need to introduce a Universal Enterprise Number (UEN) to replace the 25+ current numbers that enterprises get from multiple government departments. Managing these numbers is an exercise in futility. The UEN will enable various government entities (issuing import licenses, building permits, EPFO, ESI, etc.) to render services with a complete picture of the organization. A common number will simplify cumbersome administrative tasks, thus freeing up time of the enterprise to focus on building competitive advantage in the marketplace to create better shareholder value.
We need to cut through the complexity of regulatory compliance. GST council has been a successful model of centre-state partnership. On similar lines, a council must be formed to focus on a mandate that commits to rationalization, simplification and digitization of the current 60,000 compliance rules, 3,800 filings and 600 changes done every year.
Another critical reform would be to address the mammoth size of the government itself. 33 Ministries and over 100 departments should be reduced to a more manageable and optimum number. For example, at least cluster of business and infrastructure departments can be a good beginning. This will cut through the bureaucratic maze and improve the delivery of public services in a faster, transparent manner.
Digital India has been an important priority of the government. The new dispensation can do well to create a futuristic, forward-looking regulatory sandbox or innovation challenge to promote the EODB. Ideas are need of the hour. And there is no dearth of talented, interested people available in our country to actively participate in such innovative initiatives.
Labor reforms are often misunderstood as anti-poor. Usage of technology in improving service delivery can nullify that notion. Though digitization has brought about transparency in the functioning of EPFO and ESIC, much leaves to be desired. A right step in the direction of empowering employees to have control over their money is to allow them another choice over EPFO and ESI monopoly. Two years ago, a decision was announced allowing employee choice to NPS and health insurance as an option to PF and ESI but it is yet to be implemented. Despite simplifying and consolidating labor laws, we still have four labor codes. Need of the hour is to implement one labor code. In continuation, the new government must show its commitment to transparency, cutting red tape and nipping corruption by declaring a hard deadline of implementing India Stack – Paperless, Presenceless and Cashless.
Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) is an employer subsidy for PF payments and it has achieved its objectives of driving formalization, is easily verifiable and difficult to fudge. The new government would do well to extend PMRPY for 3 more years as it encourages wider enrollment of workers and benefits all stakeholders – entrepreneurs as well as workers. Similarly, the new government should also continue tax targeting of formal employment by service enterprises by extending 80JJAA for another 3 years.
Skill Development and Apprentices
Our nation needs a bigger talent pool of Apprentices who get exposure to hone their skills and become employable and readily productive. While the previous governments have worked on skill development, the next one should contemplate forming National Apprenticeship Corporation by merging RDAT (Regional Directorate of Skill Development and Entrepreneurship) and BOAT (Board of Apprenticeship Training). The aim of this unified entity should be to enrol 10 million Apprentices from the current 1 million and help them find employment by setting up National Matching Platform, an exclusive job portal for apprentices. Another step to encourage formal enterprises provide apprentices training is to scale up Apprenticeship subsidy for them. It should be a viable opportunity for these profit-oriented business organizations. There are several bright, needy students who are deprived from the exposure of apprenticeship as the Act excludes distance and online education degrees. A progressive step of the new government would be to make apprenticeship mode of education agnostic.
The new central government should be bold enough to decentralize governance. Though the last five years of the NDA government saw some big ticket reforms, its benefits did not reach the common man, for whom nothing changed on the ground. To create employment and touch the lives of common people, more devolution of power needs to happen so that the 31 chief ministers are more impactful. Just one prime minister alone cannot make a large-scale difference to such a huge, heterogeneous country as ours. The new government must continue the decentralization of funds, functions and functionaries to state capitals. An example is seeing the smart city program getting scaled up but it eventually got energized with positive intervention of the Mayor or City Municipal Commissioner. Incentivize states to merge current fragmentation, accountability, and resources and then the entire nation will benefit rapidly. Ever since the Indian economy opened up, we have been making strides in our growth aspirations. Today, the economy is set in motion. It is moving in the right direction. We have all the recipes for success. One hopes the new government will prioritize its growth agenda and balance the compulsions of a political economy well.
The author is Rituparna Chakraborty, EVP & Co-Founder, TeamLease Services. The views expressed are the author’s own.