The first Union Budget 2019 was recently tabled in the Parliament by newly elected Finance Minister Mrs Nirmala Sitharaman. Every one’s eyes on that day were on Finance Minister to see how she would deal with twin challenges of slowdown in GDP and increase in unemployment. These were indeed the two key challenges in desperate need to be addressed. But the question is, did her budget address them or not?
The Economic Survey which showed that GDP growth had fallen from 8.2 per cent in 2016-17 to 7.2 per cent in 2017-18, the year of demonetisation, and further decreased to 6.8 per cent in 2018-19 and the projection for 2019-20 is 7 per cent. For the 8.27 crore organised sector employees (NSSO 2011-12) and more than double that number of non-agricultural unorganised workers (ILO 2016 estimates) who create the bulk of this GDP, this budget has come up as a big let-down for them.
The budget presented by honorable Finance Minister, Mrs Nirmala Sitharaman does not seem to address the problems of private sector workers in crisis while the labour laws are considered the main constraints on the growth of Micro, Small & Medium Enterprises (MSMEs). Sixty-three million MSMEs, employing around 111 million people and are according for 30 per cent of the GDP and 40 per cent of total exports of the country but there is widespread sickness among them and they are now reeling under a debt burden of Rs 37,000 crore.
Unemployment is one of the major problems of our country that cannot be avoided. According to the State of India’s Environment (SoE) in figures, 2019 India’s rate of unemployment doubled in past two years as it has gone up from four per cent to 7.6 in the only last two years (May 2017-April 2019). This has particularly affected young graduates. The report reveals that unemployment rate among the youth (between 20-24 years) who constitute around 40 per cent of India’s labour force, have an unemployment rate of 32 per cent.
The World Bank recently estimated that India needs to create at least 8.1 million jobs every year to maintain its employment rate which has been declining. But what about the emerging danger of tech-induced job losses? According to a new study by the McKinsey Global Institute in June 2019, men could lose roughly up to 44 million jobs and women up to 12 million in India due to automation by 2030. The report comes even as joblessness touches a 45-year high and female labour force participation rate remains a low 27%.
This means at least 50 lakh jobs on an average would be lost per year over the next decade. This has been reiterated by many other studies by international agencies like World Bank and International Labour Organisation (ILO) and all of them call for serious mitigation. The Union Budget 2019-20 shows the government ignored the problems.
These surveys are highlighting the alarming factors and are in direst need to be solved. So the government must put some measures in practice to prevent this rapid growth in unemployment and downfall in GDP.
