July 9, 2009: As part of it’s First-in-India feature – “High Tea with Top Shots” TimesJobs.com took feedback of eminent HR Heads from Leading Corporates and got their views on the impact of The Hon’ble Finance Minister’s Budget on Employment and Recruitment.
Speaking of Employment, The Hon’ble Finance Minister, Shri Pranab Mukherjee, started by saying, “To counter the negative fallout of the global slowdown on the Indian economy, the Government responded by providing three focused fiscal stimulus packages in the form of tax relief to boost demand and increased expenditure on public projects to create employment ..”
Shri Pranab Mukherjee went on to elaborate many measures that the government would be taking to tide over the issues of employment, industrial growth, investment, and consumption, all of which are interlinked in the economy.
Response to the FM’s Budget from Corporate HR in India was mixed, while some were disappointed that the focus of this year’s budget was not on the salaried professionals, others applauded Shri Pranab Mukherjee’s commitment to –
- sustain 9% GDP growth,
- extending Tax Breaks for the IT/ITeS sectors,
- “Mission in Education through ICT’ to improve the Talent Pool, with investments in IITs and NITs,
- scrapping of FBT (Fringe Benefit Tax),
- removing the surcharge on taxable income of more than Rs. 1 million and
- increase of tax exemptions by Rs. 10,000.
Some excerpts of what Thought Leaders from The HR industry opined on the Indian Budget of 2009, and its impact on Recruitment and the Growth of various sectors-
Sanjay Shanmugaum, Vice President – Human Resources, CBay Systems (I) Pvt. Ltd. saw the positive, “Pranab Mukherjee’s Budget has correctly identified India’s immediate challenge to be that of that sustaining the GDP growth at 9%. The Budget has proposed the requisite economic stimulus needed for this, with financial inclusiveness as the guiding factor.
The Budget focuses strongly on social and rural upliftment and the government’s increased expenditure on infrastructure, agriculture and urban development along with the slew of incentives for private investment in education, social and energy security will provide an impetus to these sectors while strengthening India’s overall competitiveness and indirectly create employment opportunities.
For the Indian IT and outsourcing industry that is struggling to cope with slowing global demand and shrinking profit margins, the Budget has proposed some much-needed initiatives to boost growth. The removal of FBT and the reforms in indirect taxes is seen as a major plus, allowing for stock-based compensation to be more effective.
In a knowledge sector such as ours, this becomes even more pertinent, and helps us manage our talent needs better. That said, the decision to extend tax deduction on export profits under Sections 10A and 10B of the IT Act will help Indian companies retain their competitive edge in a global scenario.”
A thought echoed by Ms. Vinda Chitnis, Vice President – Human Resources & Administration, Thirdware Solution Ltd., “I feel Extension of Fiscal benefits like 10A/10B sections for Tech industry under the Software Technology Parks of India scheme will help stabilise and grow in present volatile situation.”
Ms. Rajita Singh, Head – HR, Broadridge Financial Solutions (India) Pvt. Ltd. was also positive, ” It is great to see the focus on bringing back GDP to 9% and from an HR perspective this focus means greater employment opportunities for all.
It was also good to see FBT go and an increase in the exemption limit. I would have liked all surcharges and cess to go as well, but am happy with the spend on infrastructure. On the Industry front, I welcome the announcement of GST. The concerns I have are high fiscal deficit and no clear direction with respect to disinvestments from Public Sector Companies.”
Arun Solomon, General Manager-Human Resources, MSPL Limited opined, “This budget appears to be focused on reducing the impact of recession. As employees and employers, the very marginal tax exemption of Rs. 10,000 and dispensing with the surcharge will benefit practically many employees across the spectrum.
The increase in terms of the amount for the medical treatment of dependents with disability lightens the burden of those who have dependents. Employees were expecting the conveyance allowance to be increased and similarly premium on medical insurance to be substantially increased. We had hoped that there would have been some tax incentives for salaried employees working in non-metro areas .enabling talent to gravitate to those areas.”
Makarand Deshpande, Director – HR & Admin, Skoda Auto India Pvt. Ltd, was disappointed, “The Budget has no major step to give a boost to the corporate sector except the abolition of FBT (Fringe Benefit Tax). Absolutely nothing is provided for the SME sector, which is one of the large sector to provide employment opportunities.
The budget ensures to give 12 million jobs each year and reduce poverty by half by 2014, but how this will be done is big question.
The roadmap for GST (Goods and Service Tax) implementation was expected to have better clarity for this is a major reform in indirect taxes administration, no such step was seen or declared in the budget.
Overall in my view budget was disappointing for corporate sector, as well as for individuals and that’s why there was a biggest budget day fall in the Stock Exchange Sensex.”
As was Arti Sharma, Head HR, India Yamaha Motor Pvt. Ltd. admonition, “Budget 2009 was not able to give much to salaried professionals. The increase of slab by Rs.10000/- will give little impact to few professionals. FBT abolition at the employer end should not be passed to employees as a tax burden.
Removing the surcharge for more then 10 lacs salaried professional is good. Salaried professionals are unhappy that Home Loan exemption has not been changed.
That the Government is taking care of farmers and want to focus more on their development is good, but the Government needs to understand is that most of their tax collection is coming from salaried professionals – There is nothing for salaried professional and overall Budget -2009 was a big disappointment.”
The Finance Minister provided a ray of hope, when he said, “What I unfold are. only the ‘First steps’. It will be my endeavour to make the process of budget formulation more participatory and a continuous exercise.” Giving us some succor for the future.
For more opinions, the complete text & the FM’s interaction on these and similar concerns with the doyens of industry (CII, FICCI & ASSOCHAM) & select media click here.
