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  1. Union Budget 2018: How the Budget will help create jobs

Union Budget 2018: How the Budget will help create jobs

The government accepted this long-pending demand of the industry which will now provide employers the flexibility in hiring that will gradually bring more private investments, resulting in more job creation.

Updated: February 5, 2018 1:06 AM
Budget 2018-19 proposed inclusive growth and focuses on strengthening agriculture and rural economy, incentivising job creation, making healthcare available for the lesser privileged and creation of infrastructure. (IE)

Budget 2018-19 proposed inclusive growth and focuses on strengthening agriculture and rural economy, incentivising job creation, making healthcare available for the lesser privileged and creation of infrastructure.

Incentives to industry: The government will contribute 12% of wages as the EPF’s employer contribution for new employees in all sectors for the next three years. This will bring down labour costs for the industry, which will eventually boost employment creation. In addition, the FM extended fixed-term contract hiring to all sectors, enabling employers to hire workers for specific projects on fixed-period contracts. The government accepted this long-pending demand of the industry which will now provide employers the flexibility in hiring that will gradually bring more private investments, resulting in more job creation.

More jobs in healthcare, insurance: Taking a giant leap towards attaining universal health coverage, the National Health Protection Scheme will cover 10 crore poor and vulnerable families, benefiting 50 crore people. It will provide health insurance cover of Rs 5 lakh per family per year. As the world’s largest government-funded health protection scheme, it will significantly boost job creation in healthcare and insurance sectors. Additionally, Rs 1,200 crore has been allocated for creating 1.5 lakh health and wellness centres, which would require skilled manpower, stimulating more jobs.

Farmers’ income: To raise farmers’ income and prevent distressed migration of agricultural labour to other sectors, the Budget increased MSP of all crops to at least 1.5 times that of production cost. An initiative has been introduced to connect small and marginal farmers (86% of all farmers) with consumers and bulk purchasers. The government will develop and upgrade 22,000 rural haats into Gramin Agricultural Markets (GrAMs), which are linked electronically to eNAM and exempt from APMC regulations. For upgrading agricultural market infrastructure in GrAMS and APMCs, an agri-market infrastructure with an additional corpus has been provided.

A total corpus of Rs 10,000 crore allocated to fishery, aquaculture and animal husbandry is expected to create significant jobs and self-employment opportunities. The allocation to food processing ministry doubled from Rs 715 crore to Rs 1,400 crore, with the aim to build institutions to finance agro-processing projects and promote entrepreneurship in the sector.

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Infra to propel employment: The government has earmarked Rs 5.97 lakh crore for infrastructure that would aid economic growth and create employment opportunities. Also, 99 cities under the Smart Cities mission will have an outlay of over Rs 2 lakh crore; it will create employment opportunities across sectors. For creating livelihood and infrastructure in rural areas, Rs 14.34 lakh crore has been allocated. This expenditure is anticipated to create employment of 321 crore person days, 3.17 lakh km of rural roads, 51 lakh new rural houses, 1.88 crore toilets, and provide 1.75 crore new household electric connections.

Creating vocational opportunities in tourism and hospitality, 10 prominent tourist destinations have been identified that would be developed as iconic with better facilities and services. To enhance travellers’ experience, trains would be provided with Wi-Fi, CCTV and state-of-the-art amenities, while 600 major railway stations would be redeveloped. Also, 187 projects have been sanctioned under the Namami Gange scheme for infrastructure development, river surface cleaning, rural sanitation and other interventions, leading to creation of green jobs.

MSME sector incentives: Last year the government had reduced income tax for small companies with annual turnover of up to Rs 50 crore to 25%. It has been extended to companies with turnover of up to Rs 250 crore. Also, 100% tax deduction will be offered for first five years to companies registered as farmer producer companies with an annual turnover up to Rs 100 crore. These tax incentives are expected to improve the health of MSME sector and lead to better employment scenario. An allocation of Rs 3 lakh crore has been made to MUDRA Yojana to promote entrepreneurship in MSME sector.

Job shift from informal to formal: With demonetisation, GST rollout, flexi-hiring and expanding tax net, the reasons for businesses to remain in informal and unorganised sectors are diminishing. Slowly but surely, India is likely to see a relative shift of businesses from unorganised to organised and informal to formal. This transition will result in an enhanced proportion of payroll jobs; this augurs well for more aspirational jobs getting created.

Jayant Krishna
The author is executive director & COO, National Skill Development Corporation (NSDC).
Views are personal

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