The Next Simplification : ARM ?

Most advanced countries have just  ONE TAX  for sale of GOODS and SERVICES

We will introduce our own GST ( Goods and Services Tax ) from 1^st July , across entire country

GST will replace some 70 + different taxes currently in force , for different products / services and in different States

This will lead to :

·         Higher collection of tax

·         Increase in productivity

·         Reduction in litigation

·         Simplified administering…etc

To further improve “ Ease of Doing Business “ ( - and attract many more foreign companies to set up their Manufacturing / Marketing operations here ) , I suggest NDA government follow this up with , introduction of :

·         ARM ( Allowances and Reimbursements Merger )  Act

Most economically advanced countries just pay consolidated “ SALARY “ ! Nothing else !

As against this ( utter simplicity ) , we have , one or more of the following elements of PAY STRUCTURE , depending upon factors such as,

·         Geographical location

·         Industry-sector ( organized vs unorganized )

·         Public Vs Private

These elements are :

·         Basic Salary ( in a Scale of rising minimum annual increments )

·         Dearness Allowance – DA ( usually linked to CPI / WPI rise )

·         House Rent Allowance – HRA ( varies from city to city )

·         Transport Allowance / Conveyance Allowance / Petrol Reimbursement

·         Food Allowance ( Coupons ) / Lunch Allowance

·         Leave Travel Allowance

·         Medical Allowance / Reimbursement  / Insurance Premium Reimbursement

·         Telephone Reimbursement

·         Hardship Allowance / Hazardous Jobs Allowance

·         Entertainment Allowance  /  Club Membership Fees

·         Driver’s - Gardener’s  Salary Reimbursement / Servant Allowance

·         Double Machine Operation Allowance

·         Milk Allowance ( - it exists ! )

·         Temporary Posting Allowance

·         Children's Education Allowance

*   Outstation Allowance

*   Washing Allowance / Soft Furnishings Reimbursement

*   Shift Allowance ( if required to work in second shift )

*   Overtime Wages @ 250 % of normal wages

*   Compensatory Working Allowance

The list is by no means, exhaustive !

And do not overlook the “ Monetary Value “ of the following :

*   Casual Leave / Sick Leave / Accident Leave

*   Accumulation / Encashment of PL

*   Paid Holidays

*   Supply of Uniforms / Safety Shoes / Umbrellas etc

*   Providing of Creche ( for Employee's Children )

*   Maternity Leave of 26 weeks

*   Contribution to ESIS / EPF / Gratuity  … etc

And , if juggling all of these was not difficult enough , a news report in Times of India ( 29 March 2017 ) adds following further complications :

“ GST would be payable if there is supply of free goods or services to an employee exceeding the stipulated sum

If an employee avails of a company asset for personal use, it would trigger GST

Input tax credit will not be available on supply of various facilities to employees, including life and health insurance “

 Gifts to staff worth up to Rs 50k will be GST-exempt

[ http://timesofindia.indiatimes.com/business/india-business/gifts-to-staff-worth-up-to-rs-50k-will-be-gst-exempt/articleshow/57881920.cms ]

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I hope harried HR Managers would support my suggestion to implement ARM ( - to the extent possible )

ARM would leave them with more time to attend to the tasks of Talent Acquisition / Training / Human Resource Development

What shape should the New Compensation Structure take ( after ARM ? )

This could be the subject matter for debates / essays / case-studies etc among students specializing in HR at Management Colleges

By offering to enrich their Professional lives , ARM makes them, a “ Party with Vested Interests “ !

PS :

Robots do not ask for ANY of these , nor form a UNION to submit a “ CHARTER OF DEMAND “

29  March  2017

www.hemenparekh.in / blogs

Here is a Way to Ensure !

Hindustan Times ( 27 March 2017 ) carries following news report :

“ UP CM Adityanath’s message to officials: Work 18 to 20 hours daily or leave “

In a stern message to state officials, Uttar Pradesh chief minister Yogi Adityanath on Sunday said those who are not prepare to work for 18 to 20 hours daily are free to leave their jobs.

“The state government will not tolerate any laxity in implementation of the government schemes. Officers who are willing to work 18-20 hours daily can continue with the government or else they are free to leave,” he said, addressing a BJP meeting on his home turf of Gorakhpur.

 “I am a workaholic and the bureaucrats will have to deliver too. Those who are ready to work hard should continue and non-performers should leave,” he reiterated.

Dear Shri Adityanathji :

Making your intention known to UP officers , is no doubt , the very first step

But how will you ensure that your “ Expectations “ get implemented ?

Without depending on human discretion or intervention and totally impartially ?

I strongly recommend that , under your leadership , UP does become that Uttam Pradesh ( so dear to Shri Modiji ) , by implementing my following blog / suggestion :

Wednesday, 1 June 2016

From BAD to MAD

BAD   =   Biometric Attendance Device

MAD   =   Mobile Attendance Device

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Here is my idea of a technology that we need to create for a better India :

Today EMPLOYEE ATTENDANCE SYSTEMS in India work at three levels as follows :

#   ENTIRELY MANUAL

     Attendance Register and Wage/Salary payment in cash or by Cheque

#   PARTLY AUTOMATED

     Punch cards or Bio-metric recording of attendance but manual calculation

     of wages / salaries and payment by cash or cheque

#   FULLY AUTOMATED

     Bio-metric Attendance Devices ( BAD ) , integrated with a home-grown or

     bought-out Salary Payment Software , running on a local Server.

     Salary payments could be by cheques or thru Electronic Transfer to

     concerned employee's bank account

Once in a while , if a company has several establishments within a city , those local servers are connected to a Central Server , doing all processing

In a rare case ( although , I am not aware of any ) , it may be that all the local servers of all the establishments of a company , all over the country , are networked with its central computer in its head-quarter

Now imagine this :

*  All smart phones to evolve as Bio-metric Attendance Devices , with built-in

    Bio-metric Recorders , GPS , a mobile attendance App ( called MAD ? )

*  App to have 2 buttons ( Green = IN  /  Red = OUT )

*  Employee to touch IN upon reaching his work-station and touch OUT ,

    while leaving work place , at the end of work-shift . That's all  !

*  Being GPS enabled , buttons will get activated ONLY when the employee

    has reached the work place ( not while he is on his way ! )

*  All 100 million establishments in India ( factories / offices / shops / clinics

    NGOs / Govt Depts ) to ensure that the MAD app is installed on the smart

    phone of each employee , when he joins

   

*  All of these smart phones to be connected ( IoT ? ) , with the Servers of ,

    *  Labour Ministries ( Central and States )

    *  HRD Ministry ( Central )

    *  Skills Development Ministry / NSDC

    *  Finance Ministries ( Central + States )

    *  NITI Aayog

    *  Income Tax Department

    *  Any other server that you may want to

*   MAD app is integrated with a STANDARD / COMMON , software system

     for computing daily wages / monthly salaries of ALL the persons working

     in those 100 million establishments ( whether they are casual /

     contractual  / trainee / apprentice / probationer / permanent / retained

*   As each person joins in any of these establishments , data re  that

     person must be inputted by the Employer into the App , such as :

   

     *  Name / Contact Details / DOB / Aadhar Card No / Employee Number

         ( Each unique Employee Number will be auto-generated by the

         common Salary Payment Software , running on IT Dept Server )

     *   Employee's Jandhan Yojana Bank Account Number for salary EC

     *   Employer's Jandhan bank account / Unique Employer Number

     *   Payment Mode ( Hourly / Daily / Monthly Rated , wages / salaries )

     *   Leave provisions / PF rate / TDS rate / Allowances / Reimbursements

     *   Any other relevant data ( either about employee of for employer )

WHAT  ARE  THE  ADVANTAGES  ?

*   For employees , no need to file a separate annual Income Tax Return

*   Direct deposit of PF / TDS amounts into bank accounts of Govt Depts

*   Direct Benefit Transfer ( DBT ) to every Employer for Stipend Subsidy ,

     based on number of total trainees / apprentices employed

*   Total number of employees in India ( category / region / industry )

*   Employment Density ( Industry wise / Region wise / Skill wise etc )

*   Net Employment Growth Rate ( weekly - monthly / Industry-wise )

*   Co-relation with no of persons graduating at various levels

*   Data about those Unemployed ( " Graduating " less " Employed " )

*   Overtime Statistics ( Use / Abuse )

*   Work-hour Analysis ( Ave hours / week - month )

*   Wage / Salary Rates ( Rs per hour ) - Industry wise / Region wise

     ( of great interest to Foreign Investors looking to bring down

       manufacturing costs , by outsourcing to India / manufacturing in India )

*   Compliance with labour laws / tax laws / Apprentice Act etc

*   Job Market Forecasts through BIG DATA ANALYTIC ( region / industry )

*   Demographic  Profiles of employees  ( Rural to Urban migration )

*   Per Capita Income Growth for persons using MAD app  ( MOM / YOY )

*   Changing composition between Blue Collar and White Collar employees

Then there could be many other benefits not envisaged now

Here is an opportunity for :

 *  Manufacturers of Smart Phones

     To shrink stationary / bulky / common , bio-metric devices to mobile /

     small / personalized / hand-held devices

    { Remember ?  

If you don't make yourself obsolete , someone else will  }

*  Tech Start Ups

     To come up with the Mobile App ( MAD ) / Technology Platform

*  NDA Government

    To implement what Shri Narendra Modiji said on 15 July 2015 :

   "  If China is like a manufacturing factory of the World , India should

    become the human resource capital of the World .

   That should be our target and we should lay emphasis on that . 

   We should have a futuristic vision and prepare plans for the next ten years "

  

   MAD  could well be an important element  of  that  " JAM PLAN "  !

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27  March  2017

www.hemenparekh.in / blogs

Presidential or Coalition Government ?

Shri Shashi Tharoor bats for Presidential form of government

I bat for a Coalition Form of government

Let readers debate ( - for a consensus to emerge ? )

In a recent article for “ project Syndicate “ , Shashi Tharoor said :

“ Elections to India’s 29 states, spread over many phases, are invariably seen as a plebiscite on the national government of the day

And this puts pressure on Prime Ministers to frequently leave aside their role as leader of the country to act as leader of their party

With a more expansive and predictable election cycle, India’s leaders would be able to move beyond the unpleasant business of political consideration, and settle down to governance

In that shift in focus, lies a presidential system’s ultimate vindication “

MY  BELIEF :

As seen in yesterday’s defeat of TRUMPcare ( to replace OBAMAcare ) , it is evident that, even a Presidential form of government in USA , could not ensure “ Sabka Saath , Sabka Vikas “ !

But my suggestion for a Coalition Government ( see blog below ), would have ensured passage of a similar bill in India’s Lok Sabha !

Sunday, 2 October 2016

Constitutional Coalition Aftershocks !

This has reference to my yesterday's blog : 

Constitutional Coalition  Government :

{ https://myblogepage.blogspot.com/2016/10/a-constitutional-coalition-government.html  }

where I suggested ,

*   Expand Union Government cabinet to 100 Ministerial positions ( 20% of Lok Sabha membership )

*   Allot Ministerial positions to ALL parties in proportion to their number of seats in Lok Sabha

As my friend Gurudatta had earlier pointed out, this arrangement will do away with the concept of OPPOSITION

Since this suggestion is bound to send shocks through the Political Fabric of India , here are some aftershocks :

*  Without any danger of a " Vote of No Confidence " , every government will last its full 5 year tenure

*  Government will not need to " reach out " to opposition members. Being part of Collective Responsibility , each

    Minister will go out and " sell " a Cabinet decision to other MPs belonging to his party

*  Budget provisions will be easy to get approved

*  Bills will cease to be controversial and get passed quickly

*  Debates in Lok Sabha will get much shorter, to the point - and much more polite ( no name calling ) !

*  There will be fewer Zero Hour questions and fewer " Points of Order " needing ruling by the Speaker

*  Lok Sabha attendance - and consequent productivity - will improve vastly

 Along with this suggestion , we must also introduce mobile app ,

" ROMP : RecallOur Member of Parliament "

{  https://myblogepage.blogspot.com/2015/08/romp-panacea.html  }

If a MP fails to come up to the expectations of the Voters of his constituency , he will get " Re-called " and lose his seat in the Lok Sabha !

Horror of horror !

If that happens , his party's share ( percentage ) in Lok Sabha will come down , with consequential loss of a Minister-ship  !

Would not that be a strong incentive for every party to insist / demand , the highest standard of " Performance " of its elected MPs ?  I think , each party will set up an internal process to evaluate performance of its members

Now couple this with my earlier suggestion whereby every candidate must sign ( e-Signature ) and accept to implement , a voters' " Charter of Demand " , uploaded on the web site of the Election Commission , making it easy for the voters of his constituency to judge / evaluate / rate , his performance

https://myblogepage.blogspot.com/2016/09/filtering-candidate-information.html

This will be one Earth-Quake which will change the factors in our Governance Equation !

26  March  2017

www.hemenparekh.in / blogs