Budget 2018: Beyond the promises of employment generation
Job creation for the labour market forms the bedrock in realizing the aim of growth augmented equity and poverty alleviation.
General welfare and holistic prosperity of a country is achieved when the poor participates in the growth process in a growing economy. Generating employment opportunities should find the nuclear niche in policymaking as it serves to push inequalities down. Job creation for the labour market, therefore, forms the bedrock of the aim to realize growth augmented equity and poverty alleviation.
The 2017 World Bank index ranked India in terms of percentage of total labour force. Clearly, an employment rate of 3.5 in an economy like India’s, positing itself at 28 (behind Bhutan, 2.4, and Tanzania, 2.7), was not confirmative to the goal of ‘Sabka Saath, Sabka Vikaas’. The NDA government came under the barrage of criticisms for its negligence at creating jobs, especially after making it a key electoral promise back in 2014. The latest Economic Survey gives hope to the government, stating the roles of digitization and GST in effective estimation of formal employment.
Programmes like Pradhan Manthri Kaushal Kendras and Skill Acquisition and Knowledge Awareness for Livelihood Promotion were measures mentioned to maximize youth employability in the previous year’s Union Budget. This year, the Budget found mentions of the word employment 17 times throughout its read. It, by the words of drafters, is guided by a mission to strengthen inter alia employment and MSMEs in the economy.
The 2018-19 budget touted by former NITI Aayog Vice Chairman Arvind Panagariya aimed to be an ideal balance of populism and pragmatism. It tries to call out for rural and urban employment alike, shelter incentivized employment schemes for women by craning up their take-home wage, foot 12 percent Provident Fund (PF) contribution for new job entrants, and build up on infrastructure to facilitate agricultural boost. As a measure to generate employment, the government expenditure on infrastructure is being raised to ₹5.97 lakh crore for 2018-19.
“For employment, India’s surplus labour needs to be reallocated and absorbed to jobs best suited for them,” Dr. Santosh Mehrotra, Professor of Economics, JNU
Commenting on the Budget’s focus on job creation and its economic policies towards an inclusive job growth, Dr. Santosh Mehrotra, Professor of Economics, Centre for Informal Sector and Labour Studies, Jawaharlal Nehru University, said, “The budget is about taxation policies and addressing matters like fiscal deficit in the economy. For employment, India’s surplus labour needs to be reallocated and absorbed to jobs best suited for them. Most labour should ideally be shuffled to the construction sector and traditional services as the section of populace in question are predominantly unskilled/low-skilled jobbers. Also, the dip in investment from 38 percent in 2007-08 to 29 percent today has hard hit the educated youth who demand jobs complementing their education levels or skills. Unless the Budget raises consumption demand by either promoting public and private investments or giving tax breaks that allow a rise in consumption, the number of jobs cannot grow. Having the people required, there is seen a rising demand to pull the number of jobs in the country to a bigger absolute figure.”
However, things seem to take an opposite turn for India according to the statistics presented by the International Labour Organisation (ILO). Its 2017 estimation for the year was 1.78 crores against the actual 1.83 crores – 5 lakh more than what the ILO estimated, and for 2018 1.8 crore. The ILO publication follow the day Modi called naysayers ‘liars’ furnishing reports to substantiate his claim of economic growth not being entirely jobless. The Budget of 2017, despite addressing employment generation with supreme fervor, failed to appease the statistical numbers that spoke in contraction to the government. Now that the Union Budget 2018 was introduced, the ILO report estimated a figure of 1.86 crores unemployed for this year, and almost 1.89 crores the next.
This explains why despite the government’s efforts, the unemployment rate shows a spike as global unemployment rate falls for the first time in almost three years. Situations look differently for India when it comes to providing equal opportunities at being employed at the various echelons in the economy. Despite the ministry hailing infrastructure as the foundation stone to job creation, it remains a rather diffident reality that infrastructural administration suffers greatly because of ignorance and mismanagement of resources allotted.
The government is desperately in need of a revival plan, which is what the current Budget fell short of explaining. The formality of jobs mark an essential voice in the reform policies of growth mechanics. Formal jobs are what absorbs productive labour yielding the aforementioned economic growth, eventually to realize general welfare. In exchange, formal jobs demand the productivity born of lower regulatory paraphernalia and fiscal discipline.
The hour demands a participatory government response to what might be one of the most critical areas of socioeconomic development. The facilitation of individual and collective enterprises by means of effective economic planning is what mobilizes the structures. The Union Budget 2018 might cater to the society in ways more than one, but the degree of its impact particularly on job creation and mitigation of widespread unemployment before the 2019 polls still lingers as a concern.