How can we transform lives of domestic workers

Ruchi Anand and Associates, internal auditor in India provides best taxation solutions.   

There are so many people who wanted to help those who support them in their daily lives. There are

 ways which are required to encourage domestic helps, elevator operators, security guards, hotel operators who need financial inclusion.

Most of them struggle to secure a steady income and also manage periods of unemployment. That’s why most of them prefer to work with same employers at low wages for an extended period of time. It is time to invest in them and to create bright future for them and their family.

It is an advantage living in a large city to take a toll on domestic workers. It is difficult for them to limit expenses and save. They want to provide their children everything from education to better lives so that in future they can lead peaceful lives and will stretch their resources to do that. In small cities also, illness can throw these people off balance.

Formal financial facilities are not available to many. They mainly depend upon money-lenders, pawn brokers and chit funds to manage their needs. If we really want to help these people, it is mandatory to see ourselves as mentors, lenders, managers and service providers. We tend to opt different techniques in order to achieve this goal:

First, enable better liquidity and cash flow management. Incomes of domestic workers are mainly low so that they tend to take advances. They take hand loans, informal high-cost loans, or contribute to chit funds among friends, to tide over these issues.

 Create opportunities to earn overtime from specific additional tasks, help them enhance their skills, and spend some time working with them. There are so many employers who are exploitative in their approach of handling their employees. They ask hefty charges and pay paltry sums to their employees in return. Be a fair employer who is willing to pay market rates.

Second, get them an Aadhar card and PAN, and help them open a zero-balance bank account according to Prime Minister Jan Dhan Yojana. Use your relationships with banks to get the paperwork going. Use this account to manage their investments and savings. You need to hide access of these accounts to them, lest they spend the money in it. Keep custody of the ATM card and Internet banking passwords and provide your email and mobile for correspondence.

Third thing is to gift them life and health insurance as a Diwali or long-service bonus. Use your bank or your financial adviser to complete the paperwork, and choose plans that will provide a decent cover for the family. Create an informal pool of money among friends to take care of unexpected medical emergencies in your neighbourhood. If someone gets ill, there should be generous givers to make the unexpected payment.

Fourth, it is good to take a loan with some interest and tax rather than to pay usurious interest to money lenders. Suppose your driver’s child needs coaching classes to prepare for the chartered accountant in India examination.  He is too proud to accept a donation and likes to fund it himself.

Last, we need to make them understand the investment products that can offer them an opportunity to build long-term wealth. Government announces pension schemes, health schemes, life insurance schemes that target lower income groups. Mutual funds offer micro-SIPs and products that require lower investment amounts. Help them make sensible decisions.

By taking these little steps we can transform their lives. It requires only determination.

Window dressing and its effects

Ruchi Anand and Associates, internal auditor in India provides best taxation solutions. Window dressing is active from so many years and is still active. It has an adverse effect on economy of a nation. There are so many statements are issued by Government of India, RBI and various bank managements during last over a decade, arguing that they will curb this menace. Despite of all commitments we had noticed barely any action. None of them had taken any serious steps to cut this growing trend; rather behind they have encouraged window dressing to get hefty incentives and easy promotions. They show that there is consistent and healthy growth of banking sector in India.

First of all it is necessary to understand window dressing. Management manipulate financial statements and reports to show more promising results for a period of time at the end of financial year. Reaching the end of the financial year, maximum pressure is mounted on all the officers of the bank in order to ensure that all the targets meet on time. Thus, at the point of evaluation i.e. end of financial year, all banks try to boost their deposit, credit figures through artificial means.

If we turn toward light, banking sector is becoming weaker and weaker and we will definitely reach a stage where financial stability of Public Sector Banks will be at precarious condition, and there will be dangers of collapsing the same. Many banks are unable to give a reasonable wage hike to its employees and meet the pension liabilities of the retired employees.  

It is clear that bank top management, RBI, wherein they say that there is no danger to banking system when asked about their growth, but cry of weak financial status when a reasonable wage hike/pension is asked by employees. Again government intend to curb window dressing. It seems difficult that it will be followed to any logical end.