In a highly populated country like India, it has been quite a challenging task for the policy makers to evolve a suitable growth strategy that provides for the absorption of the unemployed workers in the productive sectors. The Union Budget has several proposals that are going to give a boost to employment in the economy.
Agro bias in the budget
The budget has an agricultural and rural bias. The aspirational aspect of the budget has three dimensions which relate to Agriculture, Irrigation and Rural Development and Education along with Skills development. This seems to be quite a progressive approach to budget strategy as the both the demand and supply forces of the labour market are addressed. In a country having a huge demographic dividend, there has to be a focus on preparing our youth for gainful employment so as to absorb them suitably in the new age job opportunities created in and around their place of habitat. The budget seeks better standards of living, with access to health, education and more jobs for all sections of the society.
The budget chalks out the program for agricultural growth with a multi-pronged strategy for reducing the cost of produce on one hand and improving the yield on the other while addressing the issues of use of renewable sources of energy for operating their pumps and creating more warehouses and geo-tagging them. India resides in rural areas. The increase in the income of the farmers lifts up the demand for consumption of goods and services and intermediate goods and equipment for the farm sector and thus gives a boost to economic growth in general. The Government’s commitment of doubling farmers’ incomes by 2022 augurs well with the overall growth strategy of the economy.
The proposal to dovetail MNREGS to develop fodder farms is also a nice idea as it will support the farm. Further, the doubling of milk processing capacity from 53.5 million MT to 108 million MT by 2025 shall give a boost to the animal husbandry which is an important allied activity for farmers and could be a regular source of income for farmers engaged in single farming during the year. The access to irrigation facilities is available to only one third of the farmers and so there is widespread underemployment of rural labour due to seasonal nature of agricultural sector.
More jobs to be created in tertiary and manufacturing sector
For an economy in which the share of the agriculture in the GDP has been falling more than proportionately compared to the number of labour displaced, it is clear that that more jobs need to be created in the secondary and tertiary sectors as well to accommodate surplus or underemployed labour in the agricultural sector.
The budget envisages to harness the entrepreneurship abilities of our youth projecting him as a job-creator rather than a job-seeker and proposes to set up an Investment Clearance Cell that will provide “end to end” facilitation and support, including pre-investment advisory, information related to land banks and facilitate clearances at Centre and State level. It will work through a portal. The proposal to develop five new smart cities in collaboration with States in PPP mode selected on the basis of convergence of the convergence of the upcoming economic corridors, revitalisation of manufacturing activities and Technology shall generate many jobs in the manufacturing and tertiary sector
The budget talks about promoting manufacture of Networked products making India a part of global value chains which will attract more investment and generate more employment for our youth.
The Union Government continues to invest heavily in infrastructure, in digital economy and on job creation in small and medium firms. Particularly the budget considers connectivity as the lifeblood of an economy. The improvement in physical connectivity through rural roads, industrial corridors, dedicated freight corridors, highways and major ports will all bring about growth in jobs directly in such projects and indirectly through better infrastructure availability reducing the cost of transportation and increasing the competitiveness of domestically produced goods.
The budget also envisages improvement in aviation, railways, metro and inland waterways. All this will improve accessibility to job opportunities by bridging the rural-urban divide.
Long term strategy to create sustainable jobs
The budget thus adopts a long term approach for economic development. It is imperative that the creation of jobs may be slow in the beginning but as infrastructure develops the potential for job creation shall unleash. The budget focus on reduction of cost of transportation, power and credit shall improve the viability of not only select sectors but shall benefit the economy at large.
The development of physical and social infrastructure will go a long way in developing sustainable ecosystems to nourish and support both the agrarian and industrial sectors and it is only imperative that the tertiary sector shall also bear the fruit of such growth. Investment in infrastructure at such massive scale shall also promote balanced regional development.
However, the budget initiatives for the MSME sector such as sanction of loans up to Rs. 1 crore within 59 minutes through a dedicated online portal, 2% interest subvention on fresh or incremental loans for all GST registered MSMEs and creation of a payment platform for filing of bills and payment may give a boost to employment generation in this sector in the short term.
To conclude, the budget focus is on sustainable growth and it is likely to enhance job opportunities in both the rural and urban areas in the medium to long term.