New Delhi: On a day the government sought Parliament’s nod for additional expenditure of ₹40,000 crore on India’s only fall-back option for the jobless.
The Mahatma Gandhi National Rural Employment Guarantee scheme that pays labour-level wages, our Union Labour Minister Santosh Kumar Gangwar informed lawmakers that people withdrew nearly the same amount from their provident funds between 25 March and 31 August.
Distress withdrawals made up a large portion of that sum, as our anti-covid lockdown saw commercial activity grind to a halt, cries for compensation go unheard, and millions lose their salaries. According to data of the Centre for Monitoring Indian Economy, an estimated 21 million salaried employees lost their jobs during the five months till August.
By volume, the brunt of it has been borne by those in low-income brackets, just as migrant workers were the worst affected by the country’s shutdown. Yet, Indians who were drawing bigger packets have been pink-slipped and thrown into financial turmoil too. The Mint-Bain India CEO Survey found that nearly a third of our corporate chief executives had seen either layoffs or a combination of pink slips and pay cuts within their organizations.
Severance terms are rarely generous, jobs are expected to be scarce for a long while, and India has no safety net for the better off. This being the case, the country would do well to consider a one-off relief package for taxpayers who have been laid off.
At a minimum, the Centre should return the sums paid as income tax in 2019-20 by those who have suddenly been deprived of their income. This money could be granted as a zero-interest loan to be repaid in equal instalments over a stretch of five years after they regain employment.
With our tax authorities in possession of the data needed for it, such a scheme should be easy to execute. The basic rationale is to offer relief that’s proportional to lost earnings. In a country of such wide differences in what people earn, it takes little intuition to infer that estimations of subsistence wages differ widely from one household to another.
While the government is under no obligation whatsoever to give any tax money back, it must not lose sight of the fact that most of our recent livelihood losses could squarely be attributed to its imposition of a lockdown, regardless of how necessary it was. Everyone deserves to be compensated in some way.
It is another matter that the Centre is acutely short of resources at the moment. But tax credits for laid-off taxpayers might not strain the exchequer all that much. Those eligible for such a programme may not be very numerous. Of the 10.4 million odd salaried workers who withdrew money from their retirement pot after the pandemic struck, only about a fifth were reported to be earning ₹15,000 or more per month.
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