In spite of the recent Swachh Bharat Mission achievement figures, the fact remains that India tops the global list of Open Defecation with 58% of the entire population practising the same, an issue which the government is committed to eradicate by 2019. To make the mission economically sustainable, the government has also imposed 0.5% Swachh Bharat Cess to the existing service tax. Last year, while cleaning & hygiene industry managed to capture the government and common man’s attention, expectations were sky high when the Finance Minister Arun Jaitley announced the budget this year. Clean India Journal analyses…
A day before the general budget 2016, PM Narendra Modi set the agenda of budget by announcing agriculture to be at the centre in his address in ‘Mann ki Baat’. There is huge allocation for infrastructure and a 0.5% Krishi Kalyan cess to the existing service tax of 14.5%.
Coming to the cleaning & hygiene, out of planned expenditure of `5.5 trillion, Jaitley has announced `9000cr for Swachh Bharat Mission. The sector yet again missed the focus and is somewhere at the epicycle of the budget.
The cleaning & hygiene sector and associated service industry, which provides training and employment to the needy and less privileged sections of the society, has been left without any support or tax exemption. In fact, the government, as done with certain sectors, should not only take back the Cess levied on cleaning products and services but must also provide tax exemptions over loans sought for cleaning businesses. If India has to become clean… if Swachch Bharat Abhiyan has to succeed, the cleaning sector has to take the lead. And this is possible only with essential government provisions.”
Real Estate & Infrastructure to drive cleaning
Amidst the global slow down, Real Estate has been badly affected and taking a note, certain measures have been taken that are poised to boost the growth. These are: increase in HRA deduction, removal of Dividend Distribution Tax (DDT) from Real Estate Investment Trusts (REITs) and boost to affordable housing by allowing 100% deduction on profits made by entities constructing them. With home cleaning and institutional cleaning becoming a good prospect for the cleaning & hygiene industry, the real estate measures will help upkeep the industry. Anuj Puri, Chairman & Country Head at JLL India said, “We expect a few listings to happen in the current year itself, either by financial institutions or developers. Currently, around 229 million sqft of office space can be seen as REIT-compliant. If we assume that even 50% of these get listed, we are looking at a total REITs listing worth USD 18.5 bn.”
Besides RE, Infrastructure gets a big boost from the budget. Total outlay for infrastructure in Budget 2016 stands at `2,21,246cr. `97,000cr has been provided for roadways. The plan is to construct 10,000km of national highways, clearly another window for road sweepers. Further, “The Budget has outlined revival plans for non-functional airports in partnership with state governments, with a vision to spend around `100-150cr on each airport to make them functional again. This will give a boost to infrastructure in many tier-II and tier-III cities, and is without a doubt positive for their real estate markets. A select few projects that are commercially viable with good ridership could pick up pace in the near term.”
Policies that matter
In India, majority of cleaning companies are SMEs. Encouraging SMEs to expand their business, the FM has offered tax exemptions for small businesses with turnover of up to `2cr, twice the previous limit. The scheme will benefit 33 lakhs of existing SMEs. New investors looking to investing in the business of service segment Cleaning & Hygiene both maintanance and services, will get benefitted by the Startup India policy providing 100% tax deduction over the benefits for first three years. “The budget has attempted to boost the growth in manufacturing sector by giving the new manufacturing setups an option to choose concessional tax rate of 25%+surcharge without option for any profitlinked and investment-linked incentives. However, there should have been a level playing field not just for fresh investments, but for all existing companies across sectors,” feels Komal Sudhir, Senior Analyst-Probity Advisors Pvt Ltd.
Railways Budget
• Clean my Coach’ service through SMS
• Ranking of A1 and A stations based on periodic third party audit and passenger feedback
• Waste segregation and recycling centres
• Awareness campaigns’ for cleanliness
• Additional 30,000 bio-toilets
• Providing portable structures with bio-toilets at all platforms of select stations for senior citizens, Divyang and women travellers
Services to go costlier
In recent years, service tax has been kept on increasing. Recalling the past, till 2003 it was just 5%, which was increased to 8% and then 10.20% in 2006. On June 1, 2015, the tax was increased from 12.36% to 14% and then to 14.5% on November 15. Barely three months has passed since then, the government has levied 0.5% Krishi Kalyan Cess. Jayaraman Nair, Chairman-VIS Group comments, “While the weak economic outlook, reduced consumer spending, and rising costs would remain the moot points of the industry, due to the combined effect of the imposed Krishi Kalyan cess, the average sales price of the cleaning products might increase by 5-6%”.
Un-addressing the addressed: COP21 Action Plan
Undoubtedly, Infrastructure, Real State, Startup funding and fund provided to actualise Swachh Bharat Abhiyan are few issues that will help cleaning & hygiene segment emerge stronger than ever before. However, what was signed at the climate change conference, COP21 in Paris, which once seemed congenial to India now looks like a forgone matter with having no special focus in the budget. Here, it is also worth noting that India ranks 120th out of 122 nations in quality of drinking water supplied to its citizens. Surface waters treated by civic bodies are not enough to meet the growing demand. Treatment and reuse of wastewater is still negligible. Government policies and guidelines to tackle these issues could have been taken up on priority. Raising the same concern, Rajul Parikh, President, Water Quality India Association and co-founder & Director Alfaa UV said, “Government seems serious about the SBM as demonstrated by allocations in the budget. However, allocation towards the national rural drinking water programme NRDWP has been reduced. This is not a welcome move. Overall the budget will stimulate rural demand and the big outlay on infrastructure will kick-start the economy.”
In short, as Kiran Mazumdar Shaw, CMDBiocon Ltd puts, “Manufacturing investment is unlikely to see an uptick despite an offer of a 25% tax rate for new projects as the incentive is grossly inadequate. Overall, I would rate it as a reasonable budget with no surprises. Nothing to worry about but no euphoria either!”
Budgeting the Workloading
Cleaning represents 20% to 35% of the total maintenance and operations budget for nearly any type of organization. In other words, cleaning – whether performed in house or by a building service contractor (BSC) – is a big piece of the budget pie… and often a big target. Understanding the fundamentals of workloading and using the right tools allows FSPs to identify improvement opportunities and get the most out of their work forces.
Clean the Slate
Before starting the workloading process, determine total amount of cleanable space in the facility or building, tasks and frequencies (scope of work) and labour cost.
Simplify With Software
Whether it is an in-house cleaning operation, outsource the services, head up a cleaning business – or sell to any of these groups –knowing the number of labor hours is key to effective management. Calculating these numbers faster and more easily is even better.
Make Better Decisions
There are many ways cleaning managers can use the data collected during the workloading process. With square footage, cleaning times, and tasks calculated, managers can note areas where their facilities or cleaning jobs might be overstaffed or understaffed. In addition to collecting data, workloading reports are excellent tools in the boardroom for justifying a budget request or backing up the need for an additional full-time employee.
A cleaning business or department is only as good as their work force, and cleaning managers are only as good as their taskmanagement skills. By putting proper workloading to use, one can be a great cleaning manager, get the most out of their work force, and improve their cleaning business or department and profit. And as an informed distributor, it will help their clients meet these workloading goals.
– David Frank, President-American Institute for Cleaning