Being an Ex Army Officer, it becomes 2nd nature to be honest. I started my Business a few years back & found that there are purposeful loopholes which suit all, to make a pie of corruption. I intend covering the PF & ESI schemes below.
PF & ESI Applicability
The current applicability is excellent in the interest of the weaker section. However, its implementation is pathetic. A Co is expected to pay PF & ESI even for a casual lab employed for a day. Is it practically possible? So who is benefited? Both, the Employer, who circumvents this utilizing the Financial Brains of his CAs etc, (apart from bribing a small percentage of due amt) & the PF/ESI Regulators from Labor Commissioners to the Inspectors & below.
Currently, the applicability is for Cos with more than 20 employees. Practically it is difficult to implement for those having less No of employees. So who takes care of the other workers? Statistically, more than 80% work force is employed by such employers.
Currently, a Co having less than 20 employees can NOT obtain PF & ESI Certification even if he wants. It should have been permissible to all.
Government is expected to provide Pension, welfare, medical support etc. How does the Govt. do this without Generating the Revenue? So the Subsidy comes in, burdening the Government, whereas the Employers & Enforcement Staff enjoys.
It is a very simple recommendation, which can be implemented as easily as Income Tax.
Historical records of last Five or Ten years could be taken. Data can be collated as to what percentage of the Revenue / Turn Over, the Co spends on PF & ESI.
There will be representations from certain industries which are NOT work force intensive. Either we insist on standardization, irrespective of the Industry (better to prevent corruption), or 2-3 categories could be made. Making too many categories will increase Subjectivity & bribing.
This could become a Standard Tax for all businesses & Professionals, including Cos /Sole Proprietors /Professionals etc.
The employer would just need to send the details of the employee to the PF / ESI Enforcers, like name, salary, joining dates, ID etc.
The PF & ESI Authorities should issue PF & ESI Cards & start their PF & ESI Accts.
These accounts could be transferable as is now.
Majority work force can be covered.
Manipulating the No of employees would not be needed.
All businesses will be covered, resulting in better revenue & its expenditure for the welfare of the deserving.
Ease of doing Business, as each Registration take a couple of months & greasing of palms.
The Finance Minister will get a much Bigger Kitty from the above than what he is getting as of now.