The 2018 Union Budget is undoubtedly the most significant budget set to be announced on February 1, 2018, as this is the first budget post the rollout of the Goods and Services Tax (GST) and the revolutionary step of Demonetisation. This is a crucial budget for the Narendra Modi led government as this would be their last budget before the 2019 General Elections to deliver in terms of economic reforms and tax regime.
A major concern in this year’s budget is the creation of jobs for young India. Around 1.5 crore job seekers enter the workforce every year. According to the World Employment and Social Outlook report, “77% of Indian workers will have vulnerable employment by 2019.” These alarming statistics clearly indicate distress in the minds of the youngsters entering the job market. Unemployment in India is a pressing issue which needs to be looked into by our Finance Minister Mr Arun Jaitley in this upcoming budget, to give some relief to the employment sector.
When will the common man be the beneficiary of the “Acche Din” promised by the central government, to provide 1 crore jobs? This question bedevils our Indian youth. Although the projects like Make in India, Skill India and Start-Up India undertook by the government were focussed on employment generation, they have been unable to translate into job creation on the ground.
For pronounced emphasis on skill development and job creation, we need to have skilled manpower. As more people enter the formal sector, significant attention needs to be given to skill development in the organized as well the unorganized sector. Unless our youth is skilled, they won’t be employable. However, imparting skills alone does not create jobs. To promote entrepreneurial growth, the 2018 budget needs to provide easier policies and financial support to startups for collaboration of educational institutions with industries to create more startups and promote self-employment. For startups, adequate security should also be given. More business incubation centres should be opened up to help those who don’t have enough money and increase startup initiatives.
The mammoth task of creating an adequate number of jobs needs a higher economic growth rate. The Gross Domestic Product (GDP), a pivotal aspect of the budget to accelerate the growth of Indian economy, is expected to be 7.3% in 2018-19 by the World Bank. Providing an ecosystem to ensure more Foreign Direct Investment (FDI) will kickstart the economy and ensure higher GDP growth rate.
A significant portion of GDP should be spent on education sector to empower the youth through education. India spends around 3% to 4% of its GDP on education, which is very little compared to the public expenditure in the education sector of other nations, which spend at least 5-6% of their GDP. Raising the budgetary allocation of resources for the education sector and increasing investment in higher education and vocational training is crucial for public expenditure to ensure quality education.
For creating more job opportunities, government expenditure has to increase, as seen in 2009-10 with the net addition of jobs. As government spending increases in sectors such as education and healthcare, it will boost jobs and revive investments. A strengthened education sector will produce jobs in the employment sector. This linkage is crucial in this budget to unleash the growth agenda.
The Manufacturing Sector is one of the biggest employers in India and is expected to account for 25% of the GDP by 2022. As this sector booms with an increase in demand, the 2018 budget should focus on increasing public spending to create more demand and investment by reducing the income tax rates, interest rates in banks and encouraging loans at cheaper rates. Micro, Small and Medium Sector enterprises (MSMEs) account for 45% of the manufactured output, 8% of the GDP and 40% of the country’s export. Being a critical job creator in the manufacturing sector, it expects easy availability of credit, Minimum Alternative Tax (MAT) relaxation, and reduction in Corporate tax (CT) to at least 25% from this year’s budget. With technology, investment in modern machinery, infrastructure, ease of doing business, and more incentives for easier export facilities will revive the demand in this sector and lead to the growth of the MSMEs.
The fulfilment of the pre-budget expectations of Indian urban youth from the Finance Minister Mr Arun Jaitley in the employment sector is under the spotlight this year. India is predominantly a country driven by youth, so job creation must be an area of concern for the government of India in the 2018 budget. The eyes of the youth are set on this budget as to how it will incorporate its needs and help the economy to achieve its full growth potential.
Hopefully, the youth has enough to cheer about after February 1, 2018.