Union Budget 2019 had many firsts : Independent India’s first woman to be the Full Time Finance Minister, shunning the brown Budget briefcase in favour of a red parcel like bag, keeping the Budget speech devoid of numbers which most people do not relate to. These trivia apart, the Budget did not have any big announcements. Rather she chose to progress various programs that are already in force. Let’s think how the Budget impacts the HR practitioner!
One great idea in the form of ‘Study in India’
Centuries ago, one of the factors that attracted scholars and royals from different parts of the world to India was our educational institutions and our teaching methods. May be, we can rise to the days of past glory again, possibly surpass them some day!! We will not only be able to retain the best brains in our institutes but also attract the best students and teachers around the world someday. Seeds for that kind of an outcome could well have been sown in this budget!
We in HR could draw some inspiration from this idea and strengthen our Employer Brand by drawing talent from different parts of the world to pursue internships, run specific projects to study market opportunities, find solutions to challenges, get independent analyses on the state of affairs of a business as a whole or in parts. Such possibilities need not be limited to brands like Infosys, GE, ITC, HUL, Tata or Reliance. Start-ups, mid to large size companies can certainly explore this possibility to enrich their operations and thus, position themselves ahead of their peers.
Everyone expected the Budget to have specific measures to address current concerns of slowing demand and hence, jobs. She has introduced measures like cuts in Income tax for individuals as well as corporates, adjustments in customs duty and proposals to solve problems of Angel Tax, inheritance and so on. Budget introduces rebates on capital gains when someone invests the proceeds in a start-up. All these are aimed at boosting demand. Though time will tell if these steps are adequate, there is a need for HR to prepare for the days ahead.
Government of India hopes, the demand of white goods, automotives, farm equipment and capital goods will increase due to these steps. We need to stay prepared for multiple scenarios. In the best case situation, our companies will witness high intensity of action irrespective of which sector we belong to, manufacturing to supply chain, retail, ecommerce or services. So, we will face the challenge of attracting and retaining talent. HR programmes have to range from employer branding, innovative practices of attracting talent to new ways of rewards, recognition, talent management and development.
In the unfortunate situation of slow recovery, our challenges will be around the domain of performance management by sharp differentiation, building capability for the future, hiring talent that can adapt flexibly, building greater flexibility in staffing and managing costs. In any case, we need to stay prepared, observe market developments and make quick course-corrections.
Some food for thought on Tech adoption
Budget 2019 has proposed random faceless scrutiny of Income Tax Returns. Government is thinking progressively in deploying technology in its citizen services to drive efficiency.
We see increasing use of bots in HR processes right from answering employee queries and talent assessment to structuring individualised learning program and matching resumes with available roles. HR professionals understand the value of human interface and how technology cannot replace the value a human being in HR team brings to the table. We need to plan where and how technology must be deployed rather than mindless adoption of new tools.
HR Operations and Compliance
The point of simplifying a score of labour laws has been made in the past multiple times, but this time, introduction of four labour codes in the place of complex regulations seems real. This can reduce cost of compliance and make lives easy for employers and at the same time, employees. Again, implementation in a vast country of federal structure on a subject that is on the concurrent list of our constitution is not easy. We have to be patient and the regulatory framework needs to curb its over-zealous attempts of compliance.
We in HR need to watch this space closely and prepare our processes in HR operations and compliance accordingly.
Commitment to build infrastructure right from roads, rail and air transport to seaways and river-ways is well-intended. Rural housing, drinking water and electricity for all homes, penetration of digital technology figured in the budget, as expected. The push for green technology, electric vehicles, ecosystem for electric vehicles and invitation to multinational companies to set up manufacturing facilities in India for advanced technologies such as semiconductors, photovoltaics and lithium ion batteries is again along the expected lines. She also spoke about skilling for the future and Indian talent participating in the global demand for talent.
Most large-ticket infrastructure projects are intended to be funded through partnership between government and private sector. Government plans to divest in Central Public Sector Enterprises and raise debt from foreign institutions. The Budget talks about letting companies raise upto 35% from the public through our stock markets. It also makes provisions for banks and NBFCs to restart lending without bothering much about the non-performing assets on their books.
If you work in this sector, one can expect many changes. Keeping the ears and eyes grounded will help us act quickly. We need to review our talent attraction methods, rewards and recognition strategy and employee engagement practices.
Budget 2019 is one of the major annual events that impacts our organizations significantly. As partners with business, HR must take steps to understand the implications and plan accordingly.