Measures to boost human capital to accelerate GDP growth:HR Fund

The HR Fund, human resources (HR)-focused investment company, expects Finance Minister Arun Jaitley to take measures to boost human capital and improve human resources to accelerate GDP growth.

The Union Budget 2016 is being awaited with a lot of expectations both in India and internationally with major institutions calling India to be the next biggest growth engine. With the GDP growth projections on the rise and all eyes on India, it is very crucial that the government focuses on the key issues that will strengthen the Indian economy.

Principal at The HR Fund, Utkarsh Joshi in a statement said, "India's human capital is going to be the biggest boon for the economy if it is honed and utilized properly. Improving the overall efficiency of the Indian workforce and skilling the still untrained ones can potentially be the biggest boost that the country needs today."

"With only 2.3 per cent of the total workforce in India having undergone formal skill training as compared to 68 per cent in the United Kingdom (UK) and 52 per cent in the United States (US), the gap is very high.The National Skill Development Corporation’s (NSDC) efforts are yet to show significant results yet with just 40 percent placement record as registered in 2015," he said.

Joshi said start-ups that are flourishing in the area of HR solutions need the support and right environment from the government in order to establish their businesses.

Talking about the tax received on investment, he said, "The current Income Tax (IT) Act obligates all start-ups to pay taxes on all and any investments that they receive including angel investors. Such clauses de-motivate a lot of angels and the government should look to encourage new businesses by giving both the start-ups and the angel investors the required tax breaks."

He said start-ups face huge amount of scrutiny from all regulatory bodies, which needs to be mollified a little, such as the mandatory requirement for every company to file audited accounts every year and submit returns even when they do not have any revenues on their books.

Joshi believes issues relating to payment of gratuity, provident fund (PF), and contract labor regulations also need to be looked at. According to him, few important things to improve business scenario in the country would be rise in the income tax exemption limit, reduction in company tax, service tax and TDS to someextent to support businesses.