Towards Building a Aatmanirbhar Bharat, the Finance Minister, Mrs Nirmala Sitaraman, made the second Tranche of Announcements today focusing on Migrant workers, Street Vendors, Small Traders, Self Employed People, and Small Farmers. The announcement comprised of Nine steps, 3 relating to migrant workers, 1 relating to Sishu Loan within the Mudhra, 1 related to street vendors, 1 on Housing, 1 on employment generation for tribals, 2 related to farmers, particularly small farmers.
In her announcement, the FM clarified that, the packages being announced in tranches may overlap on subjects, and does not necessarily mean that the subject is complete with the announcement for that day, it could come up again in the next announcements as well based on feedback and need.
Highlights of today’s announcement from the perspective of Legal compliance is as under:
Labour Reforms
The Finance Minister announced that Labour Reforms in India have already been in the pipeline and 4 new Labour Codes have been under discussion before the parliament which condenses 44 labour legislations prevalent in India as on date. She mentioned that these labour codes are placed for review before various Standing Committees and promised to have the codes released at the earliest.
Some highlights of the Labour Codes and the labour welfare measures which will be brought about in the Labour Codes are as under:
- Minimum wages which is presently applicable to only 30% of workers, will be made universal, after parliament approval.
- The regional disparity in minimum wage will be replaced by a national floor wage concept.
- Fixation of minimum wage will be simplified, leading to less number of rates of minimum wages and better compliances.
- Appointment letter for all workers will be made Compulsory.
- Annual health check for workers will be made mandatory.
- It is clear that, the definition of Interstate migrant workers have to be re-looked as not all of them are recruited through agencies, rather, they migrate on their own and are taken on rolls directly by employers. Keeping this in mind, the Definition will be changed.
- Pan India, ESI will be made applicable to all districts, and will be applicable where more than 10 workers are employed, as against those in notified districts/ areas only.
- For establishments employing less than 10 employees, ESI to be made applicable on voluntary basis.
- Occupation Safety & Health Code shall also apply to small units engaged in work of hazardous nature even with less than 10 workers .
- Social Security to be made applicable to Gig workers and platform workers.
- Portability of welfare benefits for Migrant workers will be brought about.
- Re-skilling fund will be introduced for retrenched workers especially who are laid off after COVID-19.
- All occupations are advised to be made open for women even in night with safety provisions made for them.
- A Social Security Fund for unorganised workers will be created.
- Gratuity for fixed term employment – Provisions of gratuity on completion of one year service as against 5 years will be brought out.
Affordable Housing – Lower Middle class
Credit Linked Subsidy Scheme for middle income group with Annual Income of Rs 6 – 18 Lakhs p.a was operation since May 2017. CLSS was previously extended upto 31 March 2020. This scheme will now be extended till March 2021.
Migrants
- Affordable rental housing will be made available to Migrant workers by incentivising manufacturing units, industries, institutions, and associations to develop Affordable Rental Housing Complexes on their private land and operate. Further Central and State Government will make available Affordable Rental Housing Complexes under PPP mode through concessionaires.
- A drive is being undertaken to enroll returning migrant workers
- States/ UTs are adviced to provide works to migrant workers as per the provisions of the MGNREGS Act.
- Government has permitted State Government to utilise State Disaster Response Fund for setting up shelter for migrants and providing them food and water etc.
- National portability of the Ration – One Card, one nation made implemented. 83% of population will be covered by August 2020, and 100% coverage expected by March 2021. All states and UT will complete this automation by 2021.
TAX – Clarification on Part 1 Announcement:
To improve liquidity in the hands of businesses, the reduction in TDS rates by 25% have been announced on 23 items on which TDS was applicable, with exceptions to salary payments, foreign payments, and TDS on cash withdrawal above Rs 1 crore.
It was clarified that, reduced TDS rates are not applicable on salary because individuals may avail deductions under Chapter VI such as 80C, and with reduced TDS rates, the tax burden on employees at the end of the year may increase. To avoid such issues, TDS rate cuts are not applicable on salary payments.
Similarly, the reduced rate of TCS will be applicable on 12 items on which TCS shall be collected.
