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Historian Fernand Braudel warned against obsessing with “fireflies and froth"—the disease of ‘presentism’ that infects economists and policymakers with the belief that current circumstances are special, unique and unprecedented. Covid’s pain not only reminds us of our economy’s pre-existing conditions (inadequate formalization, financialization, urbanization, industrialization and human capital), but has also demonstrated a policy willingness to take the long view by ignoring ‘presentist’ demands for unprecedented deficit financing (we close with a high 12% of gross domestic product, or GDP, but if fiscal deficits could make countries rich, then no country would be poor). I make the case that the next 25 years for our economy will be very different from the last 25 years for many reasons. And the upcoming budget has a unique opportunity to take advantage of the covid policy window by amplifying existing long-term thinking on formal job creation and employability.

Let’s take inventory. India is fifth in the world in total GDP, but 138th in per capita GDP. Our problem is wages, not jobs (unemployment has hovered between 5-9% since 1947). We don’t have a shortage of land (we can give every Indian household half an acre and they would fit into Rajasthan and half of Maharashtra), labour (about 100 million people could shift off farms without impacting food security), or capital (domestic savings and foreign investors can supply the money required), but our challenge is how these three inputs combine. Covid is a tragedy, but is also India’s opportunity to leapfrog into a new world of work (capitalism without capital where intangible assets matter more than physical assets), new world of organizations (digitization makes where employees live and work less relevant), and a new world of education (employed learners in higher education will soon cross full-time learners and make the sequential 25 years of learning/earning/retirement redundant). The global capital glut (65% of global bonds yield less than 1%), China fatigue, and macroeconomics combine with recent reforms to substantially improve the long-term outlook for India.

The budget for 2021-22 must build on recent reforms like labour, agriculture and education to grant freedom to our firms and citizens to improve their productivity. Given the covid-induced shortfall in taxes, I propose six non-fiscal, “freedom" reforms for formal job creation and employability:

One, mandatory payroll confiscation levels that are higher than the savings rate breed informality. The current cycle of enterprise formalization could be accelerated by making employee contributions to their provident fund voluntary. This money belongs to employees who should have the freedom to invest it.

Two, India’s largest health insurance programme, Employees’ State Insurance (ESI), has been missing during the pandemic because its governance is too large, old and unrepresentative. The budget should announce the modernization of ESI governance along with a deadline of 1 June 2021 for employee freedom from payroll-deducted health insurance contributions.

Three, online degree-linked apprentices are the future of education because they innovate in financing, social signalling, and employer connectivity. Despite the Atmanirbhar Bharat announcement to deregulate online education, only seven of India’s 1,000 universities are licensed for online learning. This is particularly tragic because over 200 foreign universities operate online in India and nobody can or should stop them. The budget must announce that all accredited universities are automatically and immediately licensed for online delivery because covid is reinventing higher education.

Four, skill universities, which are essentially Industrial Training Institute, employment exchange and college combined, are held back by regulations that confuse university buildings with building universities. The budget must announce regulations that give unqualified freedom to universities to deliver via four classrooms (online, onsite, on-the-job and on-campus) with qualification modularity between certificates, diplomas, advanced diplomas and degrees.

Five, India’s four new labour codes will soon be notified and increase manufacturing employment. The budget should announce a three-year time- frame to move to a single labour code.

And lastly, the budget must announce a cross-ministry compliance commission tasked with the rationalization, digitization and decriminalization of India’s regulatory cholesterol of 65,000-plus compliance requirements and 6,500-plus filings, and the issue of a Universal Enterprise Number. A simple reform would be the mass substitution of “shall" with “may".

The 2021-22 Budget coincides with the 30th anniversary of the 1991 reforms, and any evaluation must remember that China and India had similar per capita incomes in 1991 but now the Chinese are four times richer than us. China’s 200-year quest for fuqiang (wealth and power) via fuxing (rejuvenation) formed the basis of the 2013 book Wealth and Power: China’s Long March to the 21st Century by Orville Schell and John Delury. It’s interesting to imagine what a similar book about India would be titled. People I polled mused about benevolence, forgiveness and tolerance. But as poet Ramdhari Singh Dinkar wrote: Kshama shobhti uss bhujang ko jiske paas garal ho (benevolence and forgiveness only befit serpents that have venom). Our poor don’t care about soft power that doesn’t deliver prosperity, and we must stop obsessing about 1991, despite its boldness, because 90% complete simply means 50% of the work is left.

Our finance minister has handled the financial horrors of covid admirably. The next budget is an opportunity to accelerate the rise of India with long-term thinking around enterprise freedom, and to put poverty in the museum it belongs.

Manish Sabharwal is chairman, Teamlease Services

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