Context:
One significant flaw in the annual Budget process is that it provides the Finance Minister with a platform to make grand announcements that generate headline news. The following year, more announcements are made, leading to new headlines, but no one checks whether the previous year’s high-profile schemes were actually implemented successfully.
Relevance:
GS3-
- Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.
- Inclusive Growth and issues arising from it.
Mains Question:
What are the low- hanging fruits in India for generation of more employment opportunities? Have the government’s recent initiatives tried towards their efficient utilisation? Analyse. (15 Marks, 250 Words).
From Disinvestment to Employment:
- For several years, the current Finance Minister used to set ambitious disinvestment targets, with the proceeds expected to significantly reduce the fiscal deficit.
- However, these efforts largely failed to materialize (except in cases where one government entity purchased a stake in another).
- This year, the focus shifted from disinvestment to employment announcements.
- While it is good that the jobs crisis is finally being acknowledged, these plans also seem unlikely to be fulfilled.
- A month after the announcements, there has been little substantial progress.
The Five-Scheme Package:
- The Finance Minister introduced a five-scheme package aimed at addressing unemployment. Borrowing ideas from the Congress party’s manifestos, the government proposed incentivizing corporations to take on 1 crore interns over the next five years. However, the design of this scheme makes it unlikely to succeed.
- The internship program is limited to the top 500 companies, excluding micro, small, and medium enterprises, which could benefit from lower-cost interns. This exclusion makes little sense.
- The scale of the program means that each company would need to take on an average of 4,000 interns every year. Yet, most companies don’t even have 4,000 permanent employees.
- With Artificial Intelligence making more jobs redundant, why would companies suddenly double or triple their workforce?
- The day after the announcement, the Finance Minister clarified that the scheme was not mandatory, just a suggestion.
- The opposition’s Right to Apprenticeship proposal was designed to be open to all companies and was based on implementing an Apprenticeship Act that meets the needs of both job seekers and employers.
- It recognized that giving young people the chance to learn and train on the job in a supportive environment could greatly improve their skills, helping them overcome gaps in their education and training. However, these nuances are completely overlooked by the government.
- While employment-linked incentives are a good idea in principle, the government made a mistake by choosing measures that are destined to fail.
- Similar to the Atmanirbhar Bharat package, the government is primarily relying on supply-side solutions to address problems that are mainly driven by a lack of demand.
- The government is offering to finance a portion of the recruitment costs, but if demand doesn’t increase and production capacity remains unchanged, which company would risk reducing its profit margins by hiring more workers?
The Job Crisis:
- Just before the Budget, a report by Citigroup Inc. highlighted the ongoing job crisis, causing concern within the government.
- In response, the Reserve Bank of India (RBI) quickly released data claiming that about 109 million jobs were created between 2019-20 and 2023-24.
- However, experts have questioned the reliability of this data due to its methodological limitations, as it relies on extrapolated population data and various employment surveys.
- Moreover, the claim doesn’t hold up under scrutiny. If 109 million new jobs had been created, the labor force participation rate should have seen a significant increase, but the latest Periodic Labour Force Survey (PLFS) shows only a 4% point rise since 2019-20.
- Most of the reported job creation comes from people moving into agriculture and self-employment. Nearly 46% of the workforce is now ’employed’ in agriculture.
- Given that agricultural income hasn’t seen a significant rise, it suggests that people are turning to farming because there are no better job opportunities elsewhere.
- Additionally, MGNREGA data indicates that in 2024-25, 24.8 lakh new individuals were added to the job cards, and a total of 5.8 crore people have already sought work, pointing to growing rural distress.
- During the decade of ‘Make in India,’ the share of manufacturing in the workforce actually declined from 12.6% in 2011-12 to 11.4% in 2022-23.
- Job-creating sectors like textiles, electronics, leather, and paper products have experienced negative industrial growth.
- The recent tragedy in Delhi, where three students preparing for government exams drowned, highlights the desperate conditions students endure to pass competitive exams.
- Millions of people endure these challenges because they view government jobs as the only path to upward social mobility.
- According to a Lok Sabha reply, the Ministry of Personnel reported that in the first eight years of the BJP government, 22 crore applications were received for government jobs, but only 7.2 lakh were hired.
- Currently, there are nearly 30 lakh vacancies in sanctioned posts at various levels in the Central government.
- The government could make a significant impact by ensuring timely recruitment and addressing issues like paper leaks.
Conclusion:
Instead of offering mere nudges, the government should focus on an economic package that supports long-term investment in essential public services. Emphasizing green jobs could have multiple benefits. Improving service delivery would greatly enhance the quality of life, help create a productive workforce, and generate more jobs.
