THE JOB CHALLENGE
IN AN ECONOMY REGAINING ITS FOOTING AFTER DEMONETISATION AND GST, CAN BUDGET 2018/19 CREATE MORE JOBS?
The Opposition has already begun targeting the government for “failure” to create enough jobs. All eyes are now on Finance Minister Arun Jaitley to blunt the criticism. The issue is an emotional one in a nation where 105 million-odd people will be looking for employment in the next five years. The Confederation of Indian Industry estimates that India created just 3.65 million jobs per year between 2011/12 and 2015/16.
The disruptions in the short run brought about by demonetisation and GST did halt the rate of job creation. Under pressure to bring about quantitative and qualitative improvement in this area, the government has taken a two-pronged approach. It is identifying sectors where jobs can be created and is revamping data collection to better capture ground realities. NITI Aayog has been tasked with devising norms to ensure better payroll reporting. With 98 per cent enterprises out of the ambit of the Labour Board Bureau, new job creation is not being recorded properly, say government sources. That is why complex data sourced from various private and public sources are being taken to reach this number.
Meanwhile, a study by SBI Group’s Chief Economic Advisor Soumya Kanti Ghosh and Pulak Ghosh, a professor with
Indian Institute of Management, Bangalore, has projected that in 2017/18, 5.5 million jobs will be created. For the first time, these numbers have been calculated based on membership of the Employees’ Provident Fund Organisation, the Employees’ State Insurance Corporation, General Provident Fund and National Pension System.
While the Budget is an opportunity to present projections for policy, revenue and expenditure that will stimulate job creation, Jaitley’s scope is sharply limited by expectations of income tax rebates and low GST collections.
Rumblings from North Block that houses the finance ministry suggest that tweaks and new approaches to existing systems are the likely options, apart from enhanced focus on the rural economy and sunrise sectors. “Real job creation will happen in rural areas only,” says a senior finance ministry official. This might involve encouraging animal husbandry, poultry, fisheries, farmer producer organisations, cold chains, warehouses and food parks. There may also be a major push in irrigation and watershed management – both big employment generators in rural areas. Officials also say that sectors with potential to create jobs in rural areas could be brought under MGNREGA. The finance minister is also expected to push the PM Kaushal Vikas Kendra to the block level; in the last Budget, he had outlined plans to bring these Kendras to the district headquarters level.
Indications are that the finance ministry has identified some sectors for job creation. These are manufacturing of solar equipment, cyber security, ayurveda, yoga, and electronics and telecom equipment manufacturing. In addition, revival is expected in demand in steel, power (distribution), defence equipment and FMCG sectors. There is an expectation that a stimulus package may be announced to facilitate job creation in these sectors. Senior officials said the options also include allowing increased deductions for additional employee costs for three years.