The Union Government, on Monday, announced an extension of social security benefits to platform and gig workers, as well as changes to bolster the burgeoning startup market of India, as Finance Minister Nirmala Sitharaman presented the Union Budget for the year 2021-22.
It was revealed that the gig workers will be provided social security benefits, which will include state insurance and minimum wages for the workers.
Mrs. Sitharaman presented India’s first-ever paperless Budget in the Lok Sabha. She said that a portal would be set up to collect information on gig workers, building and construction workers, and others, to provide basic benefits like health, credit (to ease easy financing), food, and others. The Finance Minister also noted that this step would make it the first time that the Code on Social Security 2020 has made some provision for the universalization of social security for the entire workforce, including gig and platform workers. She also noted that the a website would be launched to help these people find employment.
The total workforce of the country numbers over 50 crores, out of which 40 crores come from the unorganized sector, including rural workers and farmers. The gig and platform workers refer to those engaged by various e-commerce business organizations like Zomato, Uber, Swiggy, and Ola. Even as these companies continue to grow, their workers have not been paid their due salaries and hence have been hence deprived of social security benefits like provident fund, group insurance, and pension. Thus, this is a very important announcement for workers belonging to these gig platforms.
Sitharaman also stated that the Union Government has successfully carried out labor reforms where the majority of labor laws focus on four major areas – wages, industrial relations, social security, and occupational safety, and health and working conditions. The Finance Minister also informed that the ‘One nation, one ration card’ plan is under implementation in 32 states and one union territory
Sitharaman also revealed plans for the setting up a Central University in Leh, along with the setting up of 100 new Sainik schools in partnerships with NGOs and private parties. She added that 15,000 schools as per the National Education Policy Union Budget for 2021-22, and funds would be allocated for the same. Additionally, the apprentice law would be amended to create more opportunities for the Indian youth, and modalities for a research foundation, for which Rs 50,000 crore has been earmarked over five years, are being worked out, Sitharaman announced.
The Budget is based on six key pillars – health & well-being, physical & financial capital & infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation & research & development, minimum government, and maximum governance. “Only three times has the Budget followed a contraction in the economy. This time, unlike before, the situation is due to a global pandemic. Budget 2021 provides every opportunity for the economy to capture the pace and grow sustainably,” said Sitharaman.
The Finance Minister also announced the lifting of restrictions on paid-up capital and turnover of one-person companies (OPCs). This comes as a welcome relief for entrepreneurs, innovators, and small MSMEs in India. She also announced the reduction in residency limit for Indian citizens to set up OPCs to 120 days. The previous limit was 182 days. Non-resident Indians (NRIs) are now eligible to “incorporate one-person companies in India.”
“I propose to incentivize the incorporation of One Person Companies (OPCs) by allowing OPCs to grow without any restrictions on paid-up capital and turnover, allowing their conversion into any other type of company at any time, reducing the residency limit for an Indian citizen to set up an OPC from 182 days to 120 days and also allow Non-Resident Indians (NRIs) to incorporate OPCs in India,” Sitharaman said in her Budget Speech.
The budget also included a revision in the definition of small companies under the Companies Act, 2013 by increasing their thresholds for paid-up capital from “not exceeding Rs 50 lakh” to “not exceeding Rs 2 crore” and turnover from “not exceeding Rs 2 crore” to “not exceeding Rs 20 crore”. This move received positive feedback and will supposedly benefit more than two lakh companies, Sitharaman said. Innovators would be allowed to form OPCs without restrictions, paid-up capital, or turnover norms.
The budget also focused on decriminalizing Limited Liability Partnerships (LLPs) so that a company can convert into any form of LLP.