Big job at hand for Budget 2.0 - How can government spur job growth?

This Union Budget is expected to initiate the centralized recruitment board which could do away with the old models that the UPSC and the SSC followed.

Jul 01, 2019 11:07 IST India Infoline News Service

Jobs were hard to come by over the last few years and it was an open secret. While the government had originally dismissed the jobs report, the latest NSSO report has affirmed that the unemployment did stand at a 45-year high of 6.1%. Therefore, the big agenda for the Union Budget 2.0 will be creation of jobs. Partially, job losses were due to efficiencies and the greater use of technology. But job losses were also due to the large number of MSMEs that had to scale down operations post demonetization. It is this issue that the Union Budget will seek to address on a priority basis. After all, high levels of unemployment are not only economically but also politically sensitive.

Filling up government job vacancies
When was the last time you saw those massive advertisements in the newspapers calling for BSRB recruitments as clerks and probationary officers into PSU banks. Of course, that would be a little ambitious to expect in the situation that PSU banks find themselves in. But the budget can make a beginning by recruiting for other government vacancies. The numbers are actually quite staggering. For example, central government vacancies stood at over 5 lakhs with the Railways accounting for nearly 60% of these vacancies. Another 20% vacancies pertain to defence and the balance is spread across other departments. This Union Budget is expected to initiate the centralized recruitment board which could do away with the old models that the UPSC and the SSC followed. Apart from the job shortfalls at the centre, there are nearly 20 lakh unfilled positions in the various states. This budget could see the first big effort to revive recruitments to drive jobs and income flows.

Catalyzing the indirect self creation of jobs
The centre and the states may not have the resources to take up recruitments on such a massive scale. A lot of jobs may, therefore, have to be self generated. The budget can make a start with some solid incentives for small businesses. Make adequate funding available, smoothen the process of company formation and GST registration, create a single point window for all clearances for small businesses, reduce compliance cost, etc. Most importantly, the government should look at small businesses more as job creators and demand generators than as tax payers. As jobs and income levels expand, each of them will anyways contribute via indirect taxes. The government must stop the practices like hounding by tax authorities, arbitrary freezing of bank accounts and striking off companies for small reasons. These could be true value drives with a viral effect on jobs.

Job creation has to be supported by re-skilling
In a way, the Indian IT industry is suggestive of the challenges of re-skilling that India faces. The onslaught of technology, better connectivity and robotics is going to increasingly take away jobs from humans. This compounds the jobs problems because the government has to also tackle job losses. Re-skilling is the need of the hour. Workers need to be given the opportunity to enhance their skills, update their knowledge and skill levels to global standards and also to be adequately trained as the requirements of the job change. Polytechnics were a great idea but we have not fully leveraged their potential. Above all, the Budget must do an immediate restructuring of the university curriculum to make it more relevant to job creation.

As Nirmala Sitharaman rises to present the first Union Budget of Modi 2.0, she will bring a unique combination to the table. As a women she understands the first important unit of the economy; the household. Secondly, as an alumnus of JNU, she understands the flaws of a leftist approach but the merits of a welfare state. Lastly, as an avowed right winger, she empathizes with the requirements of business. It is this combination that will be in full play on July 05th. Hopefully, jobs should follow!

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