Budget 2024: When Finance Minister Nirmala Sitharaman unveils the interim budget on February 1, India’s employment agencies expect tax breaks and higher interest rates on provident fund accounts. Additionally, recruiters anticipate funding for programmes that improve employability. They said that funding for skill development initiatives and partnerships between the public and commercial sectors can assist in meeting the changing demands of the labour market.
Tax Relief Expectations
“Tax relief stands as the most prominent expectation, with a strong desire for increased basic exemption limit from the current Rs 2.5 lakh to Rs 5 lakh, which will significantly reduce the tax burden for lower and middle-income earners and improve spending,” said Balasubramanian A, VP at TeamLease Services. It seems improbable that the budget, which is scheduled to be presented on February 1, will feature any “spectacular announcements,” Sitharaman stated on December 7. There won’t be a full budget presentation by the administration because this is an election year.
Interim Budget Measures
Rather, until a new administration is elected, there will be an interim budget with measures to control spending and income. After the general elections, when the new government becomes power, a complete budget for the remaining part of FY25 will be provided by May.
In order to increase disposable incomes and promote careful financial planning, experts also recommended raising the ceilings for deductions permitted under Sections 80C (investments), 80D (medical insurance), and house rent allowance.
Standard Deduction in 2023 Budget
During her 2023 budget statement, the finance minister established a standard deduction for salaried individuals and pensioners under the new tax structure. Pensioners and salaried workers were previously eligible for a standard deduction of Rs 50,000 under the previous tax system. In addition to the rebate, under the new tax regime, salaried individuals earning up to Rs 7.5 lakh are exempt from paying any taxes.
“Encouraging deductions for tuition fees and training courses will promote professional development and lifelong learning, enhancing individual career growth and overall workforce competitiveness,” Balasubramanian said.
Introduction of Labour Codes in 2020
In 2020, four labour codes were developed to facilitate commercial transactions. These codes addressed pay, industrial relations, occupational safety, health and working conditions, and social security. Staffing companies are still unable to take advantage of the regulations’ full potential, nevertheless, due to the delay in their notification and implementation.
Staffing organisations are seeking recognition and support for this changing employment model as the gig economy gains popularity. They suggested that regulations and incentives specifically designed for gig workers could enhance the flexibility and resilience of the labour market as a whole.
Proposed Measures for Labour Codes
“We propose measures for the implementation of labour codes, enhancing social security for informal sector workers, increasing healthcare funding, and introducing work-life balance initiatives,” said Aditya Mishra, MD of CIEL HR. Industry leaders asked the government to think about raising the interest rates on provident fund accounts in order to improve financial returns for the workforce, especially in light of inflationary pressures, in addition to more general budgetary expectations.
“It’s time to consider boosting the interest rate on PF accounts to a solid 9 percent. This move would significantly enhance employees’ retirement corpus, providing them with a more secure financial future,” said VC Karthic, founder of Buzzworks India. An interest rate of 8.15 percent was approved by the Ministry of Labour and Employment for the Employees’ Provident Fund plan for the fiscal year 2024.
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