Bhuvan Bhaskar
Employment is not only a socio-economic but also a political issue in India and therefore employment is also an election issue in almost every election, whether state or national. In such a situation, with only 2 years left for the Lok Sabha elections in India, it is natural that the Finance Minister in the Union Budget for 2022-23 will focus on creating jobs. Especially when Prime Minister Narendra Modi is often under attack from opposition parties for his promise made before the 2014 Lok Sabha elections in which he promised to create 1 crore jobs for the youth.
Though the government has its own claims on job creation and no matter how right or wrong they are, it does not affect the fact that at the juncture at which the country stands, job creation is one of the top priorities for any government. Should be. There are two reasons for this. The first is the derailment of the economy in the last two years due to the Corona pandemic, which has forced a huge workforce out of the market.
Talking about the data, the unemployment rate in the country which was 7.2% in January 2020 increased to 23.5% and 22% respectively in the months of March and April. In the subsequent months, though it returned to the range of 6-7%, it again crossed the 9% level in December 2020 and reached around 12% in May-June 2021 when the second round of COVID came.
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Now with the beginning of the third phase of COVID, the situation has started deteriorating again and according to the latest data released by CMIE, India’s unemployment rate has once again reached a 4-month high in December 2021. Many economists believe that this round of Omicron variants may sabotage the much-needed recovery in economic conditions. In such a situation, the general budget of 2022-23 is an opportunity for the government to save industries and jobs in time.
The second reason is the condition of the Indian workforce in the medium to long term. In August 2020, consultancy firm McKenzie released a report projecting that by 2030, an additional 60 million people would enter India’s non-farm labor market and 30 million people would shift from the agricultural sector to the non-farm sector. That is, in the next 8 years, the industrial sector will have to be ready to provide employment to 9 crore people. According to the report, in addition to these, 5.5 crore additional women can also come in this labor market, if socially and educationally, women empowerment and equality schemes are implemented properly. This is a big challenge, for which the government will have to make efforts from now on.
The Union Budget for the year 2022-23 can be a strong start in this direction as all the signs are indicating that the Indian economy has come out of its bad phase and will grow by more than 9% during this entire year 2021-22. rate can be achieved. ICRA has projected to maintain the rate of 9% of GDP during 2022-23 as well. This is in line with the target because according to the McKenzie report, the country must achieve 8% growth by 2030 if it wants to employ all the estimated labor force. This is a challenging target and the government will have to undertake serious reforms in many sectors of the economy to achieve it.
Finance Minister Nirmala Sitharaman Budget 2022-23 should focus on manufacturing, real estate, agriculture, food processing, retail and healthcare sectors as McKenzie estimates that these 6 sectors alone will add $6 trillion to Indian GDP by 2030. can. The Government of India has set a target of taking the country’s economy to 5 trillion dollars by 2024-25 and 10 trillion by 2030. If the Finance Minister uses the upcoming budget as an opportunity to initiate necessary and meaningful reforms in these six sectors, it will be a significant step towards achieving the central government’s goal.
The real estate sector has started showing signs of improvement in 2020 and 2021. According to JLL India, the Delhi-NCR, Mumbai and Pune markets saw an 8% year-on-year growth in office space usage in the third quarter of 2021. About 56000 homes were sold in India’s 8 micro markets during July-September 2021, a year-on-year growth of 59%.
Now Nirmala Sitharaman can encourage people to buy homes by reducing registration fees and duties. Apart from this, policies related to increasing the use of technology in construction can be accelerated in real estate, which can become a major source of employment as real estate boom will directly mean bricks, cement, steel, electricals. And there is also an increase in demand from sanitary industries.
Land can be prepared for land reforms in the budget to accelerate manufacturing and construction. According to an estimate, the cost of land for industries can be reduced by up to 25%, if the unused land held by the public sector undertakings is freed. This will make it easier for the industries to expand and new opportunities for employment will be created. Labor reforms have anyway been passed by the Modi government in Parliament and it can be implemented from April. It will definitely have positive results and increase in industrial investment will lead to employment generation.
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Reform in agriculture is a difficult task. The government is still nursing its wounds on this front and it is unlikely that any further steps will be taken on agricultural reforms for the time being. But there are steps the government can take, such as boosting agricultural exports, accelerating investment in warehousing, and expanding the food processing industry to smaller towns and rural areas. Rural youth can get employment in large numbers in these areas.
Along with this, the government needs to increase its focus on MSMEs because it is they who can actually stop the migration of youth to cities and actually take employment to small towns. So far, most of the government’s efforts in the MSME sector have been limited to easing loans. There is a need to take this forward and take it to the Ease of Doing Business. Only by encouraging more and more youth to set up new ventures to become the medium of employment generation, employment generation can really be created on the scale which is required.
(The author is an expert in agriculture and economic matters)
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