homeeducation NewsBudget 2023: Work from home allowance and layoff policy — experts expect a budget for future ready workplaces

Budget 2023: Work from home allowance and layoff policy — experts expect a budget for future ready workplaces

Budget 2023: Work from home allowance and layoff policy — experts expect a budget for future ready workplaces
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By Nishtha Pandey  Jan 31, 2023 12:13:00 PM IST (Updated)

According to experts, job creation can be a focus point of the budget initiatives through the Product Linked Incentive scheme especially in the manufacturing and technology sector.

As the countdown to Budget 2023 begins, expectations from what all sectors want from the budget have started to come to the light. For the jobs market 2022 was all about layoffs, adjusting to coming back to office after Covid-19 pandemic, increased pressure due to inflation and fear of recession.

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However with the Union Budget 2023, due on February 1 experts have hopes on announcements that will bring some stability in the job market.
“The human resources sector is hoping that the Union Budget 2023-24 will lay out a plan for economic recovery that prioritises employee welfare, job creation, and sustaining the economy after the pandemic slump,” said Daya Prakash, Founder, TalentOnLease
Focus on job creation and making a future ready workplace
“The main focus of FY 2023-24 should be on job creation and increasing public Capex to promote growth. This can be done by investing in greater infrastructure and communication development in rural, Tier-2, Tier-3, and Tier-4 areas,” Aditya Narayan Mishra, Managing Director and CEO of CIEL HR Services told CNBC-TV18.com
According to experts, job creation can be a focus point of the budget initiatives through the Product Linked Incentive scheme especially in the manufacturing and technology sector.
“Section 80JJAA of the Income Tax Act of 1961 allows businesses to deduct the cost of hiring additional employees from their taxable income, encouraging employment growth in the country. Since 2014, the implementation wage has been capped at Rs. 25,000 per month, but it is necessary to revise this figure to account for inflation over the past eight years,” Lohit Bhatia, President, Workforce Management, Quess Corp told CNBC-TV18.com
As per Bhatia an increase to Rs. 50,000 would be ideal for providing quality jobs and the benefits of economic prosperity to all.
Experts also highlighted that with more and more investments of the government towards building the startup culture in India, incentives in the budget 2023 for the same can be expected as well.
“Increasing the scope of financial provisions and the emphasis on startup-friendly programmes should be in focus with providing policy and financial support for skilling to ensure that India's workforce is prepared for the future,” added Prakash.
Stricter workplace policies amidst layoffs
The economic downturn in 2022 and shift in the idea of how workplaces work with terms like layoffs, moonlighting, quiet-quitting becoming so popular last year some announcements to regulate the workplaces can be expected
According to Krishna Kumar, Founder and CEO of edtech company Learnbay "Work from Home allowance" can be anticipated from the Union Budget 2023. Additionally as businesses have been divided over the concept of moonlighting the government can issue notification outlining the tax consequences of this aspect.
“There are no social security payments in India, as there are in the Western world. It would be excellent if the budget includes provisions to reassess the conditions of severance compensation in India and enforces some degree of uniformity for them to cater to the disturbance in the lives of these employees,” added Kumar.
Recently tech firms have been news for voluntary separation policies and not paying due severance amidst layoffs.
As per Vikash Chandra, the COO of tech career platform Cutshort, the Union Budget 2023 should include announcements on topics such as notice periods, severance pay, job retention and support, and regulations for layoffs. Additionally, it would be widely welcomed if the budget includes guidelines and incentives for companies to adopt working from home and hybrid workplaces.
Incentivising enterprises, providing benefits to employees in MSME’s
In India there are over 63 million Micro, Small and Medium Enterprises which account for a third of India's GDP as per annual data from the Ministry of Micro, Small and Medium Enterprises.
The Indian MSME sector provides a crucial employment opportunity with low capital requirements. As per the data from the Udyam Portal of the Ministry of MSMEs, 93,94,957 people were employed by MSMEs registered on the portal in FY 22. The employees working in MSME’s are mostly the informal workforce.
According to Bhatia the Government should implement measures and make announcements in the Union Budget 2023 on expanding social security support for all employers, and social security schemes can cover all first-time employees for at least 12 months. As a result, the states will benefit from higher formal employment and increased coverage of ESIC/EPFO, which will directly fuel investment in infrastructure/healthcare.
Further Mishra from CIEL believes that the government has to focus on incentivizing enterprises for remote job development and promote WFH as a normal working paradigm.
“In the budget there will be an aggressive focus on the privatisation of public sector firms and boosting allocation to capital expenditure with a concentration on an investment-led growth plan to fuel India's economy despite the global uncertainties,” he added.
Further Achal Khanna, CEO - SHRM India, APAC & MENA mentioned that the government should make announcements on individual training expenses, learning subscriptions of all nature to come under exemption, encouraging employees and organisations to shift their focus aggressively on reskilling and upskilling to keep up with the global talent demands.
Gig economy and labour codes
Another focus of the budget as per experts will be the gig economy. India also identified social protection for the gig and platform economy as well as sustainable financing for social security as one of the key priorities at the G20 under its presidency.
Shantanu Rooj, founder and CEO at TeamLease EdTech mentioned that with the budget announcements the government should take measures to simplify taxation processes for the gig workers.
The gig economy, which is expected to employ 23.5 million people by 2029–30 and account for almost 4 percent of all income in the nation, there are currently 7.7 million employees employed, according to a research recently released by NITI Aayog in June 2022. Including the gig economy in labour laws and providing social security can also be the focus of the Union Budget 2023 as per Mishra from CIEL.
Finance Minister Nirmala Sitharaman in her budget speech for Union Budget 2020-2021 has announced a portal to collect information regarding gig workers for social security. “For the first time globally, social security benefits will extend to gig and platform workers. Minimum wages will apply to all categories of workers, and they will all be covered by the Employees State Insurance Corporation,” Sitharaman said in her budget speech.
To replace 29 labour laws, the government established four labour codes in 2019 and 2020: the Code on Social Security, 2020; the Code on Wages; the Code on Industrial Relations, 2019; and the Code on Occupational Safety, Health, and Working Conditions, 2020. The Indian President has approved all the codes, but the administration has not yet put them into effect. So experts believe that implementation of new labour codes can happen before FY24 starts and announcements can be expected on the budget.
Reduction in income tax rates
Experts anticipate that the Union Budget 2023 will feature taxpayer-friendly policies and offer benefits to salaried professionals.
“According to current income tax regulations, the maximum slab rate for income surpassing Rs. 5 crores, after surcharge and cess is 42.744 percent. This is a lot higher than several of the Asia-Pacific nations. Therefore, it is anticipated that the maximum tax rate of 30 percent will be cut to 25 percent, giving them greater purchasing power and offering tax relief,” said Anshuman das, CEO and Co-founder, Careernet
Further due to the economic downturn and inflation income tax slab rates can be advanced from 3 lakh to 5 lakh, and an increase in Housing Rent Allowance can also be expected, he added.
CNBC Awaaz earlier reported that the government is likely to lower income tax rates and introduce revised slabs for salaried individuals in its upcoming Budget 2023 due on February 1.
The report said that there may be a reduction in the tax rates in the new income tax regime. The government may reduce the 30 percent and 25 percent tax rate under the new regime.
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