In his Budget speech this morning, Finance Minister mentioned the word employment 17 times. Another oft-repeated word was 'jobs'. But that is completely in line with expectations from Budget 2018 since the government has been receiving a lot of flak for failing to deliver on its electoral promise of creating 10 million jobs a year.
So what's the good news?
- To begin with, in his own words, "In order to create employment and aid growth, Government's estimated budgetary and extra budgetary expenditure on infrastructure for 2018-19 is being increased to Rs 5.97 lakh crore against estimated expenditure of Rs 4.94 lakh crore in 2017-18."
- The two new initiatives under the Ayushman Bharat programme-setting up of 1.5 lakh Health and Wellness Centres and the flagship National Health Protection Scheme-are not only expected to address health care but also "generate lakhs of jobs, particularly for women".
- In his Independence Day speech Prime Minister Narendra Modi had said "We are nurturing our youngsters to be job creators and not job-seekers." But that can only come about if the micro, small and medium enterprises (MSMEs), a major engine of growth and employment in the country, are properly incentivised. Recognising that fact, Jaitley has lowered the corporate tax rate to 25% for companies with a reported turnover of up to Rs 250 crore in the financial year 2016-17. In last year's budget, this benefit was limited to companies with a turnover of under Rs 50 crore. According to the finance minister, this move will benefit 99% of companies filing returns, leaving them with a higher investible surplus, which in turn will create more jobs.
- "It is proposed to set a target of Rs 3 lakh crore for lending under MUDRA for 2018-19 after having successfully exceeded the targets in all previous years," he said. This is another step in the right direction. The Pradhan Mantri MUDRA Yojana, which provides access to institutional finance to small business units and entrepreneurs, has already led to 5.5 crore jobs since its launch in 2015 (as per a September 2017 SKOCH report).
- Hoping to further boost job creation in the formal sector, Jaitley has announced that the government will contribute 12% of the wages of the new employees in the EPF for all the sectors-instead of a select few at present-for next three years. To incentivise employment of more women and to enable higher take-home wages, the Budget has also proposed to amend the EPF Act to reduce women employees' contribution to 8% for first three years of their employment while the employer's contribution will continue at 12%. The facility of fixed term employment moreover will now be extended to all sectors (instead of just apparel and footwear sector).
- A recent World Bank report had sent alarm bells ringing in the country claiming that over 30% of India's population aged between 15 and 29 years are NEETs (Not in education, employment or training). Acknowledging this problem, the Budget has announced that the Government will set up a model aspirational skill centre in every district of the country under Pradhan Mantri Kaushal Kendra Programme. He added that over 300 centres have already been established for imparting skill training.
- Budget 2018 was particularly big on rural development. As can be seen from the plethora of proposals for the farmers, the focus of the government will be on providing maximum livelihood opportunities in the rural areas in the coming fiscal. "In the year 2018-19, for creation of livelihood and infrastructure in rural areas, total amount to be spent by the Ministries will be Rs14.34 lakh crore, including extra-budgetary and non-budgetary resources of Rs11.98 lakh crore. Apart from employment due to farming activities and self-employment, this expenditure will create employment of 321 crore person days," said the finance minister.