Missing: Push for Jobs, Welfare

The Indian Express     2nd February 2021     Save    

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.