Six ‘freedom’ reforms to bolster job creation and employability

Context: Upcoming budget has a unique opportunity to take advantage of the Covid policy window by amplifying existing long-term thinking on formal job creation and employability.

 Indian economy: present status

• Rank fifth in the world in total Gross Domestic Product (GDP), but 138th in per capita GDP.
• Problem is low wages and not unemployment (which hovered around between 5-9% since 1947).
• Have land, labour, and capital, but the challenge is how these three inputs combine.

 Opportunities:

• COVID-19 is a tragedy, but is also India’s opportunity to leapfrog into:
  • A new world of work (capitalism without capital where intangible assets matter more than physical assets),
  • A new world of organizations (digitization makes where employees live and work less relevant),
  • A new world of education (employed learners in higher education will soon cross full-time learners and make the sequential 25 years of learning/earning/retirement redundant).
• The global capital glut (65% of global bonds yield less than 1%), China fatigue, and macroeconomics combined with recent reforms, substantially improves the long-term outlook for India for -

 Way forward: Six non-fiscal reform measures for formal job creation and employability

1. Make employee contributions to their provident fund voluntary: will promote formalization of enterprises.
2. Modernization of Employees’ State Insurance (ESI) governance: along with a deadline of 1 June 2021 for employee freedom from payroll-deducted health insurance contributions.
3. Promote Online education: through all accredited universities and also ensure the participation of foreign Universities.
4. Reforming Skill Universities: including Industrial Training Institute, employment exchange and colleges.

• • Formulate regulations that give unqualified freedom to universities to deliver via four classrooms (online, onsite, on-the-job and on-campus)
  • Enhance qualification modularity between certificates, diplomas, advanced diplomas and degrees.

5. Three years’ timeline for moving towards a single labour code: along with notifying the four labour laws and increasing manufacturing employment.
6. Setting up a Cross-ministry Compliance Commission: tasked with the rationalization, digitization and decriminalization of India’s regulatory cholesterol.

Conclusion:

• As poet Ramdhari Singh Dinkar wrote: Kshama shobhti uss bhujang ko jiske paas garal ho (benevolence and forgiveness only befit serpents that have venom).
• Our poor don’t care about soft power that doesn’t deliver prosperity, the next budget is an opportunity to accelerate the rise of India and to put poverty in the museum it belongs.