Missing: Push for Jobs, Welfare

Context: Budget 2021 fails to give priority to boosting jobs and has a missed support to informal workers, circular migrants and agricultural labours.

Key problems that need to be addressed.

• Declining employment: especially of women.
  • Month-on-previous-month changes in total employment in 2020 based on Centre for Monitoring Indian Economy (CMIE) data reveal that In April 2020 more than 113 million workers were rendered jobless as a result of the sudden and stringent lockdown.
  • Women’s employment declined by 2.7 million between November and December, compared to a decline of 2 million for men.
• Precarious livelihoods, falling demand, and rising inequality.
• Keys to solve the above problems
  • Inclusive growth.
  • Focus on health infrastructure: Like improving primary healthcare.
  • Provide minimum wages: for workers without stable salaried jobs.
• Budgetary measures by the government to address the problems.
  • Focused on health and inclusive growth.
  • Simplified direct tax regime.
  • Reiteration of the privatisation goal.
  • Increase Infrastructure spending: It will boost employment to a certain extent.

Reasons to believe that the budgetary measures cannot address the problems

• Announcements may not get modified subsequently into outcomes: E.g. in the last 2 budgets, the actual expenditure was below the estimated expenditure.
• Aggregate numbers may look very different when these are unpacked: E.g. Government’s stimulus of Rs 20 lakh crore (announced during the COVID19 pandemic), appeared to be a strong fiscal boost, but in reality, it was not a fiscal stimulus but additional liquidity.

Way forward: to address the problems (measures that could have been included in the Union Budget).

• Provide succour for the rural unemployed workers: By increasing expenditure on Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
• Increase wages for social workers: Like for Accredited Social Health Activist (ASHA), Anganwadi and Auxiliary Nurse Midwife (ANM) workers.
• Create a road map for boosting employment.
• Provide support and revival policies for Medium, small and micro enterprises (MSMEs): As they employ a very large part of the non-agrarian workforce.
• Provide direct cash supports: to informal workers, circular migrants, agricultural labour.
• Make Public Distribution System (PDS) universal: for steady in-kind food transfers.

Conclusion: India should take measures to provide a fiscal stimulus of 10% of Gross Domestic Product (GDP) for a strong economic recovery with “inclusive growth” as its objective.