Reasons for Focus on Jobs during Union Budget 2024
There are 3 reasons why jobs are likely to be in focus during Union Budget 2024.
First, of course, is the fact that the BJP fell short of the majority mark in the recently concluded Lok Sabha elections 2024, and the government will be looking to repair their relationship with voters.
Secondly, the government has received a record $25 billion surplus transfer from the RBI. This will allow them room to spend on things like infrastructure to push job creation, something that they’re likely to do.
Thirdly, incidents like those in Mumbai and Vadodara have reignited the discourse on jobs in India.
In fact, on 11th July, Prime Minister Modi met top economists, flagging a renewed thrust on jobs and a push for more manufacturing and rural businesses.
Government’s Agenda to Help India’s Job Market
So, what more could be on the government’s agenda to help India’s job market?
For starters, the government may announce an Employment Linked Incentive (ELI) scheme for certain labor-intensive sectors, such as tourism, toys, leather, apparel, and others. This would be on the lines of the Production Linked Incentive (PLI) scheme rolled out for 14 sectors.
The objective is to create jobs, particularly as the domestic industry, especially the MSME sector, receives a boost.
Incentives under these schemes could include tax relief for businesses hiring new workers and wage subsidies for additional jobs created.
Non-financial incentives may also include reducing regulatory burden and subsidizing skill development programs.
Secondly, recommendations have been made to the Finance Ministry to include provisions that can help reskill, upskill, and rehabilitate workers whose jobs have been impacted due to AI and automation. This would bolster their social security net and ensure they are less vulnerable.
Thirdly, as mentioned earlier, keeping the capital expenditure (capex) high is expected to help create jobs along with boosting growth.
Some of these measures would create jobs that match existing skills and also invest in training programs for future prospects.
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