Budget 2018: It is said that an acceptable level of unemployment means that the government economists, to whom it is acceptable, still have a job. So, no prizes for guessing that this year’s Economic Survey concludes that “formal payrolls are considerably greater than currently believed”. The Survey estimates that nearly 24 crore Indians are gainfully employed in the formal sector based on the GST network. That is more than one in every three Indians above the age of 25. That level of employment is more than acceptable, but the estimate smacks of statistical plastic surgery. Let us give credit to where it’s due. The government economists seem to be doing a good job of keeping their job. It is customary to voice the clichéd appreciations for the Budget — that it was citizen-friendly, business environment-friendly, development-friendly, etc. And in many areas, such as health insurance for half a billion citizens, substantive increase in infrastructure spend, reduction of corporate tax rate to 25% for MSMEs, etc, this year’s Budget deserves those appreciations. But the FM did very little in terms of incentives for job creation.
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The only noteworthy boost to formal sector job creation is the government’s incentive to contribute 12% of the wages of the new employees in the EPF. That, unfortunately, is far too little. The government’s approach towards job creation, both in the Economic Survey and the Union Budget, seems unduly complacent. It is commendable that the FM chose to allocate close to Rs 4 lakh crore for physical infrastructure. What the country needs more desperately is investments in soft infrastructure, i.e. in human resources. A fraction of that Rs 4 lakh crore could have been provided as incentives for job creation. The least that was expected in this year’s Budget was the introduction of the National Employment Policy. For a country where two out of three citizens are in the working age-group, we cannot afford not to spend on human infrastructure.
Shakespeare said, “You take my life when you take the means whereby I live.” That’s even more true for the youth without means. Being lackadaisical in terms of policy-making and not providing the right incentives for gainful employment for the largest educated youth population in the world may be the lividest mistake of the FM in this Budget. Squandering the productive years of this vast educated populace may be the FM’s heftiest extravagance.