Union Budget 2018: Workers

In the last two years, the wealth of India’s richest 1% population increased from 58% in 2016 to 73% of the total wealth generated in the country in 2017, according to a new survey by an international rights group. In 2017, two crore people were looking for jobs, whereas only 20 lakh jobs were created. Pakoda vending is being peddled as job creation.

In the background of severe economic crisis featured by massive sickness and closure of industries, resulting huge job losses, no concrete measures are seen in the budget proposals of 2018 for boosting quality employment across the sectors. The government fails to ensure Rs. 18,000 as a floor minimum wage as accepted by them in the 7th Central Pay Commission recommendation. The budget further reiterated its ongoing exercise for privatization of the public sector units which would further aggravate the already prevailing inequality.

In the BJP government’s Budget Statement 2018-19 (BS), it claims that the BJP government created 70 lakh jobs in the organised sector. This is based on provident fund data which does not tell us about the continuity of employment, or even on continuity of PF payments by employers. In contrast the same study also confirms that only 5 lakh workers were newly registered under Employment State Insurance. The BS celebrates its proposed amendment to the Industrial Employment (Standing Orders) Central Rules, 1946 in order to extend Fixed Term Contracts (FTC) to all sectors as also the tax incentives to companies for creating new jobs. These tax incentives and FTCs will encourage employers to create more short term jobs turning India into the haven of irregular jobs. Thrust on contract jobs demonstrates the challenge before the workers. This is bound to lead to further depression in wages and other benefits, further job insecurity and moreover further attacks on workers’ right to organize.

The government has undertaken to contribute the employers’ share (12% of annual income) of Employees’ Provident Fund (EPF) for every new worker for three years. It significantly reduces the payroll cost for companies to expand their workforce. The proposal to pay the employer’s contribution of EPF for all new workers will amount to a significant transfer of wealth from taxpayers to corporates. Given that the support is only for the first three years, it is unclear if the jobs will remain viable when the subsidy is repealed.

The government has also reduced women employees’ contribution to EPF from 12% to 8% in order to increase their take-home pay. It’s also important to note the 4% reduction of women workers’ contribution to EPF is not being compensated. This effectively decreases long-term savings to improve ‘take home’ wage. This also undermines the retirement benefits of women workers’ increasing their dependence on men in their old age. Higher ‘take home pay’ could even encourage employers to lower women wages. This is being introduced despite the Economic Survey’s admission that India has amongst the lowest women’s participation rates in the workforce and some of the widest pay disparity between men and women workers.

It is doubtless that the Central Govt. has hit the salaried employees. While the government has reintroduced standard deduction for salaried workers after many years, the standard deduction of Rs. 40,000 will be compensated by the elimination of travel allowance and medical reimbursement (together close to Rs. 34,000) providing only marginal relief of about Rs. 6,000 to salaried employees.

‘Make in India’ launched with much fanfare also has not taken off, and a large number of start-ups have closed or facing closure. The youth of the country which was promised creation of jobs has been betrayed. Sabka Sath, Sabka Vikas has proved itself to be a big joke of time.

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