It is EMPLOYMENT that best captures the spirit of Budget 2024. It is loud on Education, MSMEs, Productivity, Land, Opportunity, Youth, Middle class, Energy security, New generation reforms, and Technology.
While unemployment is a huge challenge to address, unemployability is an even bigger one.
Therefore, it is in this light that the 2024 Budget has not only focused on employment generation by providing young pass-outs with internships but has gone a step further by laying out an outline to accelerate India’s growth machine. This includes a significant emphasis on value addition for the employed, with a major thrust on skilling the demographic dividend.
It also has to be mentioned that the government, in the Economic Survey released a day earlier (on July 22), pointed out that “job creation happens mainly in the private sector”.
In this Budget, the government has tried to use the stone of internship to kill two birds — unemployment and a lack of a skilled, employable workforce.
HOW BUDGET 2024 ADDRESSES THE SKILL GAP
Looking to make sure India doesn’t miss the bus, Finance Minister Nirmala Sitharaman in her seventh consecutive Budget has largely focused on employment, skilling, MSMEs, and the middle class.
“Sixty-five per cent of India’s fast-growing population is under 35, and many lack the skills needed by a modern economy,” says Economic Survey 2023-24.
“Estimates show that about 51.25% of the youth are deemed employable,” noted the document presented in the Parliament by Finance Minister Nirmala Sitharaman on Monday.
In other words, roughly half of college graduates are not immediately employable upon graduation.
CONGRESS USED UPEMPLOYMENT TO HIT AT GOVERNMENT
During the 2024 Lok Sabha Election, the Opposition, led by Congress leader Rahul Gandhi, vigorously highlighted the issue of unemployment as a major point of criticism against Prime Minister Narendra Modi’s government.
Gandhi accused the Narendra Modi government of turning India into a “centre of unemployment”, particularly among the youth.
The Opposition cited the high jobless rate, with 83% of unemployed individuals being between 15 and 29 years, and blamed the government’s policies for exacerbating the problem.
Addressing a rally in May, Rahul Gandhi even said, “India has double the unemployment as compared to Pakistan. The number is 23% here and 12% there.”
CENTRE SAYS JOB CREATION ISN’T JUST ITS JOB
The Opposition’s job is to highlight areas of concern, but the government’s job is to work on a remedy within the constraints.
There is a lack of scope in generating government jobs because of budgetary constraints, and the government has tried to cut down its salary bills. So, what’s the way out?
“Overcoming these [contemporary challenges] requires a grand alliance of union and state governments and the private sector,” says Economic Survey 2023-24 released by the Finance Ministry on July 22.
“It is worth reiterating that job creation happens mainly in the private sector,” it says.
It says that several issues that influence job creation and productivity require action that lie in the domain of state governments.
“So, in other words, India needs a tripartite compact, more than ever before, to deliver on the higher and rising aspirations of Indians and complete the journey to Viksit Bharat by 2047,” says the Economic Survey.
It seems with this tripartite collaboration in mind, where the private sector is the major job creator, the Centre has given shape to the Budget document. To get the private sector to hire, it needs to provide it the necessary skilled, employable workforce.
HOW BUDGET 2024 ACTS TO BOOST EMPLOYMENT, SKILL THE YOUTH
The Modi-led NDA government, now in its third term, has tried to acknowledge the need to tackle the issue of unemployment head-on. This is clearly visible in Budget 2024.
In this Budget, the NDA government hasn’t just focused on employment, but has taken a proactive approach on skilling of the workforce, boosting and engaging with the Medium, Small and Micro Enterprises (MSMEs), keeping up with its promise.
Finance Minister Nirmala Sitharaman announced a Rs 2 lakh crore package, comprising five schemes and initiatives aimed at employment and skilling, under the Prime Minister’s scheme to incentivise hiring by taking care of the demand side.
One of the five initiatives, she said, will benefit 4.1 crore youths over a five-year period and in 2024 alone, over Rs 1.48 lakh crore is expected to be spent on education, employment, and skilling upgrade, said Finance Minister Sitharaman.
She said another scheme would target first-timers entering the workforce, providing them with a one-month wage in all formal sectors.
Another scheme would be focused on job creation in manufacturing, by offering incentives at a specified scale directly to both employees and employers concerning their EPFO contribution during the first 4 years of employment.
Under the Prime Minister’s package, a scheme will focus on skilling in collaboration with state governments and industry.
The Centre aims to skill over 20 lakh youth in the next 5 years.
A comprehensive scheme will also provide internship opportunities for fresh pass-outs in 500 top companies to more than one crore young people for over 5 years. This scheme would be instrumental in plugging the gap between conventional education and skill-based industry needs.
Additionally, to support young people who have not benefited from any government initiatives, financial support for loans up to Rs10 lakh for higher education in domestic institutions will be provided.
So, with the Budget, the government is not just acting on the unemployment rate that was raised by the Congress-led Opposition, but is also looking to make the youth ready to be employed, with skills.
And this is the need of the hour.
WHY SKILLING UP IS THE NEED OF THE HOUR?
In the current economic landscape, the creation of jobs and the development of skills are paramount.
Skilling of youth or skill development has come to be the biggest issue India is facing, according to veteran journalist Subhomoy Bhattacharjee.
“This problem starts at the school level. What is taught in our schools? Mathematics, English, Hindi, science, geography, history, but not vocational skills,” says Bhattacharjee, who is a contributing editor at Business Standard.
“So, one would suggest that include skilling in school education. But a child needs time to learn. This means that they will either have to avoid some subjects or schools will have to make changes to those subjects, by keeping fewer subjects and subjects that have more to do with skilling. So, automatically, we are saying that skilling becomes a second-class problem,” explains Bhattacharjee.
That’s the root cause of the problem. Vocational training is considered a sub-par subject in academics.
The current education system heavily relies on classical subjects, leaving little room for skill development. As a result, students often complete their schooling without acquiring practical skills that can be directly applied in the workforce.
The need for skilling-up has become more urgent than ever, and the Narendra Modi government has addressed this in Budget 2024. While the opposition focused on unemployment during the Lok Sabha polls, the government has taken a step further by emphasising the importance of creating a skilled workforce.
Through the internship route, Budget 2024 aims to get the private sector hire, by making a skilled, competent workforce available to it.