"The upcoming Budget will be instrumental in determining India’s economic recovery and sustained growth strategy"

In 2023, India entered the year facing challenges such as a demand slowdown and geopolitical conflicts. However, the country has demonstrated resilience through strong tax collections, a high-capacity utilization rate, and large foreign exchange reserves. While agriculture has contributed to GDP growth, manufacturing has struggled, and upper-class families have driven household consumption. In this scenario, the upcoming Budget will be instrumental in determining India’s economic recovery and sustained growth strategy.

Now before we get into my proposal for this year, I want to highlight the key initiatives from last year’s Budget, which I believe will continue to play a crucial part. These are - the promotion of digital skills; the Production Linked Incentive (PLI) scheme for job creation; New Education Policy (NEP) 2020 to increase employability, and efforts towards formalization of employment and skilling.

The NEP 2020 will especially be a significant game-changer in making individuals capable of commanding higher wages and more employable in formal setups. The need for this became even more apparent during the pandemic.

The government has already taken steps towards the formalization of informal employment, and it would be beneficial to continue focussing on it in the upcoming Budget, in addition to incentivising skilling.

My Union Budget Proposal: Putting Money into India’s Future

Employment Generation

India is facing several challenges, including the impact of the global recession on certain sectors such as IT, food, and energy. However, the country’s economy has shown vigour and has the potential to continue growing in the coming years.

India’s employment potential is significant, especially since we have a younger workforce. My proposal for the Budget would prioritise job creation for the youth by investing in industries related to clean energy, healthcare, telecommunications, and technology, which are predicted to drive job growth in the coming years. Further, incentives such as lower corporate tax rates could also give these industries an impetus to add jobs.

According to foundit data, there has been a 79% growth in hiring for green jobs in India in the past year. There is a need to support growth in green jobs through initiatives like the National Hydrogen Mission, which aims to increase demand for green hydrogen through mandates and incentives for businesses. This could encourage the entry of new players into the market and add employment opportunities.

The Budget would also help the Electric Vehicle (EV) industry by extending the FAME Scheme, which is set to expire in 2024. And linking the FAME II scheme to e-mobility conversion with an expanded scope to include commercial vehicles. These measures could help boost job creation in the country and contribute to India’s growth to become the world’s third-largest economy by 2032 and a $10 trillion economy by 2035.

Skill Development

Skill development is crucial in today’s constantly evolving world. Technology and automation are advancing with each passing day, and newer role requirements, such as those related to the environment, social and governance practices and AI specialists, will continue to emerge. Therefore, it is imperative that the workforce have the right training and skills to be prepared for new and upcoming roles. Keeping this in mind, my proposal would focus on supporting skill development for the modern world through investments in vocational education and training programs.

It will also accelerate the implementation of NEP by developing new educational financing models and expanding the nation’s apprenticeship programme. The massification of online learning through collaborations between universities and businesses could aid in funding specialised programmes and promote skill-based learning strategies. It could also allow for the inclusion of unconventional subjects in conventional curricula that align with market demands. The proposition would also consider offering tax breaks for edtech start-ups, which are currently subject to high tax rates on goods and services related to education, as well as for educational hardware for schools.

In addition, my proposal would include incentives for companies that spend money on reskilling and upskilling, particularly in technology or workflow-related fields. This would encourage businesses to invest in education and training programmes that ensure the presence of a skilled workforce.

Formalization

For workers in the unorganised sector, including the gig economy, prioritising job security and protects workers’ rights by implementing labour codes addressing wages, labour relations, social security, and occupational safety and health is crucial. A proper framework for adopting these codes will have to be implemented state-wide to help workers and employees. Therefore, a simplified mechanism could be included in the Budget through rewards for compliant states and sanctions for non-compliant ones to encourage uniform adoption and application of the Codes nationwide.

The formalization of work will also help address the gender gap in the workforce. According to a recent industry report, the employable women workforce stands at 52.8% compared to 47.2% for men, but the share of women in India’s workforce is only 33%, much less than the 67% of men. There is potential to resolve this problem through several initiatives, including implementing equal pay for equal work, developing a transparent wage structure, and imposing fines on employers who engage in unfair practices like pay discrimination, unequal opportunities, and benefits. Creating a national paid family leave program is an additional initiative that might make it simpler for women to balance their obligations to their families and careers. Overall, these initiatives can help create a more supportive environment for women in the workforce and help increase their participation in the labour market.

Conclusion

In conclusion, my proposal strongly prioritises skill development and employment creation. We can create a more robust and inclusive India by investing in technology, healthcare, and telecommunications sectors, incentivising businesses that invest in reskilling and upskilling, and encouraging overall economic growth. These key agendas should be considered in the upcoming Budget and will define India’s promising future.

(The article has been analysed and penned down by Sekhar Garisa, CEO, foundit {previously Monster APAC & ME})