Budget 2018: Narendra Modi government’s last full Union Budget will give job seekers, agriculture sector and infrastructure big reasons to cheer! While standalone measures for job creation in Finance Minister Arun Jaitley’s India Budget 2018 are being anticipated, the latter two areas – agriculture and infrastructure – will also indirectly help create a huge number of jobs. That’s a double bonanza for employment seekers. That’s the consensus that emerges in FinancialExpress.com’s pre-Budget 2018 survey on Union Budget 2018’s expected focus areas. The Narendra Modi government has faced criticism for agricultural distress situation and not being able to create enough jobs. Ahead of the Lok Sabha polls 2019, it, therefore, makes sense for the government to look for avenues in Budget 2018 to alleviate agriculture sector stress and enable job creation.
Budget 2018: Agriculture, infrastructure and job creation will grab limelight
Financial Express Digital surveyed 21 leading fund managers, sector experts and economists and listed out 10 possible themes that the Finance Minister Arun Jaitley would focus on: Agriculture/rural economy, infrastructure, housing, social welfare schemes, job creation, Make in India, trade, disinvestment, crackdown on black money and push for private investment. Agriculture, Infrastructure and job creation emerged the top-ranked areas of focus. A whopping 19 out of 21 experts expect the budgetary allocation to the agriculture sector to be significantly increased. As many as 18 out of 21 experts expect job creation to find special emphasis in Budget 2018, while the other three are not sure, but suggest measures to boost jobs nevertheless. Interestingly, the recently tabled Economic Survey 2018-2018, authored by CEA Arvind Subramanian, also stated that finding jobs for the “young and burgeoning workforce” of India will be a medium-term area of importance for the government.
What Modi government can do for job seekers
Dharmakirti Joshi, Chief Economist at CRISIL believes that giving a big push to the construction sector will create jobs. “This, in turn, will push rural income up and also provide a buffer if monsoons are sub-normal,” Joshi says while responding to Financial Express Digital’s pre-Budget 2018 survey. For job creation, Bidisha Ganguly, Chief Economist at CII suggests, “Deductions are presently available for hiring additional workmen but various conditions attached make this impractical. Relaxation of conditions such as minimum establishment strength and percentage increase in hiring should be removed to make this provision more effective.”
According to Jaideep Arora, CEO of Sharekhan, “For job creation, the government is expected to take concerted efforts on various fronts/areas. For example, it might make higher allocations for rural employment schemes and provide some sops for MSMEs.” “There could also be efforts to boost labour-intensive industries like textiles and garment manufacturing along with encouraging growth of the services sector,” he tells FE Online. Arora adds that easing rural stress and supporting MSMEs is important since it influences a large pool of working population. “At the same time, we do not expect the government to lower spending on infrastructure and affordable housing to support the economy,” he says.
Watch video: 10 expectations of common man from Budget 2018
Other areas that the Modi government can look to create jobs that are focused on low-cost labour. Sahil Kapoor, Chief Market Strategist, Edelweiss tells FE Online, “Measures can be focused on low-cost labour-intensive exports sectors like textiles, plastics, ready-made garments and leather industry.” Agrees Siddharth Khemka, Head- Retail Research, Motilal Oswal who is of the view that skill development and employment generating sectors like textiles will be key to pushing job creation. Dhirendra Kumar, CEO of Value Research sees an indirect boost for jobs in Budget 2018. “Budget 2018 will have indirect measures to boost job creation. For example, with public sector banks being recapitalised, resources have been freed up for businesses and this, in turn, will lead to job creation,” he says.
Relieving agricultural stress and boosting infrastructure
Greater budgetary allocation for agriculture in Union Budget 2018 would be important and necessary for the government to meet its promise of doubling farmers’ income, most experts in the survey echo. Sujan Hajra, Chief Economist at Anand Rathi says, “For over a decade, Indian agriculture is going through a phase of distress. With two-thirds of the population living in rural areas and half of the workforce directly linked to agriculture, this segment needs greater budgetary support.” Rusmik Oza, Head-midcaps at Kotak Securities sees a big push for the agricultural sector. “There are state elections in the end of this calendar year or the start of next calendar year. Going by the voting pattern of Gujarat state elections the government would have to give impetus to the rural economy. This year due to better production, prices of many agri products has fallen,” he tells FE Online.
Sachchidanand Shukla, Chief Economist at Mahindra Group advocates the case for using Budget 2018 to focus on qualitative spending on agriculture. “This includes targeting spending on market assurance scheme, MNREGA, eNAM, land leasing and contract farming,” he pitches. Agrees a senior economist at a leading financial company, ‘This (agriculture) is one section of our society which is squeezed by nature and middleman all the time. The government should invest lot more in agricultural infrastructure like storage etc, develop a mechanism so that the farmers are not at the mercy of middlemen and nature.” An economic policy advisor at a global firm – who does not wish to be named – suggests that the government come up with innovative schemes which are not fiscally expensive to boost agriculture. “There is need to incentivise private sector participation,” he says. Experts also expect higher allocation to MGNREGA since it meets the dual objectives of dealing with agricultural issues and providing jobs.
Infrastructure, the second highest ranked theme, is seen as the right sector for thrust in Budget 2018 with its multiplier effect on growth and also potential to, directly and indirectly, create jobs. For many experts housing as a part of infrastructure would also see some attention. Given that a large section of the economy is still dependent on agriculture and that for the common man one of the most important areas of concern is a job – the Narendra Modi government’s Budget 2018 would definitely cheer a majority of India if it manages to get its measures right on these fronts.