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Meet on incentives for corporates to employ disabled people
N.C.P.E.D.P. initiates a series of meetings to frame a 'Draft
Incentives Policy to promote employment opportunities for disabled people in
corporate sector in India'. At the latest meeting on August 11, 2004, delegates
agreed that the next move should be to mobilise disability organisations throughout
India.
View Think Tank members
The
campaign for enshrining incentives that would motivate the corporate sector
to employ disabled people was kicked off when National Centre for Promotion
of Employment for Disabled People (N.C.P.E.D.P.) conducted a ‘preparatory
meeting’ in October 2003.
The meeting, apart from industry representatives, comprised N.G.O.s, parents of disabled people and accounts professionals, who discussed and compared incentives given in other countries to encourage employment of disabled people in the private sector
The meeting was chaired by Bibek Debroy, Director of Rajiv Gandhi Institute for Contemporary Studies. It was attended by Manishankar Aiyer, Subodh Bhargava, former President of CII and Executive Trustee of N.C.P.E.D.P., Jayant Bhuyan, Secretary General of Assocham, Ashok Alexander, Director of Gates Foundation (India), Alana Officer, Country Director of Handicap International (India), Preeti Mehra, Deputy Editor of Hindu Businessline, and G. Syamala, Executive Director of AADI. They discussed the formulation of a Draft Incentives Policy for the corporate sector, as mandated under Clause 41 of The Disability Act, 1995.
It was suggested that two sets of recommendations should be created -- short-term recommendations for the coming budget and a long-term incentives policy that could be followed in a step-by-step manner. The group also recommended carrying 1 per cent of the organisation’s turnover into a Disability Cess.
“All those companies who fail to employ disabled people will not be covered under the 1 per cent Disability Cess. Moreover, if a company employs 1 to 2 per cent disabled people, it is eligible for an accelerated depreciation of about 150 per cent,” said Subodh Bhargava. “Similarly, a company employing 2 to 3 per cent disabled employees can avail accelerated depreciation of 175 per cent on capital expenditure incurred. If the company employs more than 3 per cent disabled people, it gets 200 per cent depreciation on capital expenditure.”
Capital expenditure would include all long-tem expenditures made by the organisation for making itself barrier-free. Bhargava further added, “There should be substantial tax rebates up to 125 per cent on employee cost or weighted deduction, wherein the company employs 1 to 2 per cent of disabled people in its workforce, as is done for R&D expenditure as per the IT Act. If the company or organisation employs 2 to 3 per cent disabled people, rebate of up to 150 per cent should be given.”
In weighted deductions, if the organisation employs a disabled person with a salary of Rs. 1 lakh per annum, then the organisation gets a rebate of Rs. 1.5 lakh, which means an additional rebate of Rs. 50,000. With corporate tax liability being calculated at 35 per cent of Rs. 50,000, the organisation actually makes a gain of Rs. 17,500 on account of this.
It was suggested that about 10 per cent of rebate on Profit Before Tax (P.B.T.) would be given to organisations that employ 1 to 2 per cent disabled employees, 15 per cent for employing 2 to 3 per cent disabled people, and 20 per cent rebate for employing more than 3 per cent employees with disability.
Incentives like cap on capital expenditure not exceeding Rs. 10 lakh per disabled employee and a lucrative cap on corporate tax not exceeding Rs. 1 crore was also suggested. Members indicated that various industry representative bodies like Assocham, C.I.I. and F.I.C.C.I. should be requested to include these recommendations in their separate budget recommendations for Finance Ministry.
While Alana Officer discussed incentives available in the European Union (E.U.) and how they could be best replicated in the Indian context, R.K. Gupta, from Bansal R. Kumar & Associates, gave details on various subsidies and tax incentives already available in India in various vertical segments like export zones, rubber, sugar and steel industries, to name a few.
Mr. Javed Abidi, Executive Director of NCPEDP, pointed out that incentives are available to the private sector to encourage employment of disabled people in neighbouring China and Pakistan, as well as the E.U. “By and large, there are different kinds of quotas applied in different countries. For example, if you have 100 employees or more in an organisation in Pakistan then there is 1 per cent reservation for disabled people,” Abidi said. “In other countries there are very liberal incentives. I am told that there are over 8,000 enterprises in China, which employ disabled people and are getting suitable incentives. It is understood that about 60 to 70 per cent of the disabled Chinese are gainfully employed in some place or other,” he added.
Talking about the dismal state of disability employment in India, he explained that only after The Disability Act, 1995, was formulated, the issue of reservation for disabled people in A and B category jobs in government and public sector was thought about. “Before that the government had a job incentives for disabled employees only in the C and D categories,” he said.
He further focussed on the importance of Clause 41 of The Disability Act, 1995. It is the only clause in the entire Disability Act that mentions the private sector by name and encourages employment of disabled people to the tune of 5 per cent or more of the workforce.
G. Saikumar pointed out the importance of formulating incentives even for partnership firms and individual-driven organisations, apart from framing them only for big corporates. “We should recommend provision of tax incentives not just for big organisations, but also partnership firms and individuals, so that the employ disabled people,” he said.
For long-term recommendations, it was suggested that gradation of incentives should be applicable on the basis of gradation of disability, as otherwise the very word ‘disability’ would be misinterpreted and only people who are minimally disabled would get employment.
The members felt that the incentives recommended should also keep in mind the needs and aspirations of people with mental disabilities.
On August 11, 2004, N.C.P.E.D.P. followed this up by organising a one-day meeting in New Delhi to review the 'Draft Incentives Policy’. The day brought together disability activists from around the country. It was funded with support from the European Community.
Talking on prevalence of inter-related employment and
welfare systems in European countries, Ms. Alana Officer, country director,
Handicap International outlined its sharp contrast with the standards and policies
that exist in India. Quoting an example she said, "In United Kingdom, the
employer is paid £75 per week, to employ a disabled person for more than
six months. And in Germany, the wages of disabled people are subsidised by the
government, up to 80 per cent for a maximum three years."
Abidi said, "The Disability Act was passed eight years ago and the incentives
for the private sector to encourage them to add the differently able to their
workforce have not been announced. Under Section 41 of the Disability Act 1995,
incentives have to be provided to the public and private sector to ensure that
at least five per cent of their workforce is composed of persons with disabilities.
So after extensive discussion with various stakeholders, we have prepared a
draft incentive policy that we would be sharing with the Government. It is unbelievable
that less than one per cent of the disabled population in India is employed,
while in China, 70 per cent of the disabled population is part of the workforce."
"We did not want a quota system that would compromise merit. We are asking for a level playing field. Many a time people have been rejected on the basis of their disability and not because of they are not good enough," he added.
Agreeing to the urgency to implement the draft incentives policy, the delegates felt their next move should be to mobilise disability organisations throughout India and lobby with the different authorities, in order to promote employment for disabled amongst corporate and other establishments.
Members of the Think Tank that drafted the Incentives Policy
The Disability Act 1995 mandates incentives to the organisations in the public and private sector, which employ disabled people. NCPEDP undertook the responsibility of drafting an incentives policy in a participatory manner involving various stakeholder segments. A think tank was constituted to draft the policy. The members of the think tank are listed below:
Chairperson: Shri P. M. Sinha, Director, Indian Oil Corporation, Wipro Ltd., ICICI Bank Ltd.
Co-chairperson: Prof. Bibek Debroy, Director, Rajiv Gandhi Institute for Contemporary Studies
Members from concerned stakeholder segments
Shri Harsh Mander, Country Director, ActionAid
Shri G. Saikumar, Advocate, Gaurishanker Saikumar & Co.
Disabled People/Parents
Disability NGOs
Consultants
N.C.P.E.D.P.
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