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Employment, livelihood and Union Budget: One more rolling plan for long-term projects

By IMPRI Team 

The Impact and Policy Research Institute (IMPRI), New Delhi’s #IMPRI Center for Work and Welfare (CWW), conducted an interactive panel discussion on the topic “Employment, Livelihoods and Union Budget 2023-24” on 4 February 2023, under the IMPRI’s 3rd Annual Series of Thematic Deliberations and Analysis of Union Budget 2023-24, as part of IMPRI #WebPolicyTalk. The discussion was chaired by Prof Suchita Krishnaprasad, Former Associate Professor and Head of the Department of Economics at Elphinstone College, Mumbai.
The session was inaugurated by Ms Fiza Mahajan, a researcher at IMPRI, who welcomed and gave a brief introduction to the chair and panelists of the discussion. The Panelists for the discussion were Dr Sandhya S Iyer, Associate Professor and Chairperson, Centre for Public Policy, Habitat and Human Development at Tata Institute of Social Sciences (TISS), Mumbai; Dr Sonia George, Secretary, Self Employed Women’s Association (SEWA), Kerala; Prof Utpal K De, Professor North Eastern Hill University (NEHU) and Visiting Professor IMPRI; Prof Ranjit Singh Ghuman, Professor of Eminence Guru Nanak Dev University (GNDU), Amritsar; Mr Udit Misra, Deputy Associate Editor, Indian Express; Mr Sandeep Chachra, Executive Director, Action Aid Association, India and EX Co-Chair, World Urban Campaign, UN-Habitat.
At the outset, Prof Krishnaprasad contextualized the Budget presented by giving an overall state of the Indian economy and by reminding us all that this Budget comes in the backdrop of a pandemic that shook the entire world. She also gave us an explanation of what previous Budgets had emphasized. Prof Krishnaprasad raised an extremely important point – Budgets from the past few years are becoming like rolling plans, that is they tend to focus on long-term projects, spreading capital expenditure over four to five years, eg: the Pradhan Mantri Gatishakti Yojna, which was the co-ordination of 13 to 16 ministries. Although this may be beneficial for the long term how does one measure the fiscal deficit over a year? Also since all these projects are spread over years, one doesn’t really know how to assess the performance of a given budget.
She explained that in the 2021-2022 Budget, there were six important pillars or themes that were put across like health and well-being, physical and financial capital infrastructure, inclusive development for aspirational India, invigorating human capital, innovation, R&D and minimum government and maximum governance. But each of these headlines was actually projecting sound activities to be done over a period of five to six years. So if we took clean air, something like an outlay of Rs 64000 crore in Atmanirbhar Swasth Bharat Yojana for six years was proposed or Rs 2.87000 crores over next five years for Jal Jeevan Mission for Urban areas and Rs 1.41000 crores plus for Urban Swachch Bharat Mission, which was again for five years and many experts claimed that these were sounding like rolling plans rather than an annual Budget.
She also touched upon the Productivity Linked Incentive Scheme (PLI) which was supposed to take India’s economy to the next zone, and which focused on 13 Sunrise sectors that would give us export earnings, employment generation, high-growth rate and which would have more forward and backward linkages and create growth potential for the economy. But there were problems with PLI as it was supposed to be an incentive to be given for final value addition but in most industries that were taken up for PLI like food, mobile manufacturing, pharmaceuticals, etc, not much of this incentive capacity was used as can be seen from DPITT ( Department for Promotion of Industry and Internal Trade) date published in September 2022. There is still a trade deficit in the external sector, which was perhaps expected to be narrowed down with PLI. But probably the parts which are imported are still expensive and therefore according to many experts, PLI is almost a lost cause. And hence this Budget doesn’t talk about the PLI at all.
Prof Krishnaprasad also pointed out the dearth of data. A lot of things depend on the Census data and the last Census was conducted in 2011, so several Budgets have had to depend on more than a decade-old set of data.
The discussion was carried forward by Mr Sandeep Chachra, who focused on what people would have wanted from this Budget. He said three things spoke to him directly from the Budget. The first being the abolition of manual scavenging, which he welcomed but stressed that this transition from manhole to machine-hole should have been aided with schemes for the manual scavengers to find self-employment.
The second big thing that he talked about was the saturation of all the settlements of the Particularly Vulnerable Tribal Group (PVTG) with housing, roads, and sanitation facilities. He said although this was a step in the right direction, there still remained the question of the de-notified tribes, semi-nomadic tribes, and pastoral groups who comprise about 13-14% of the population of India. According to Mr Chachra, a percentage of budgetary outlay in a focussed manner should have been given to these communities.
The third thing he was excited about was Finance Minister’s announcement to provide support to undertrials and prisoners who have been languishing in jails for a long time and do not have the resources to carry out long trials. Mr Chachra says he would also have wanted a much larger public spending on the employment problem, he says the very fact that NREGA funds has been reduced tells you a very telling story.
Next Mr Udit Misra enlightened the audience with specific data. He mentioned that the increased Capital Expenditure actually shows us that the government is concerned about the lack of investment by the private sector of the country. Mr Misra also raised a very pertinent and worrying point for India when he said that labour force participation rate, which is the denominator of calculating the Unemployment Rate is falling. People have been pulling out of demanding work because they are discouraged because they don’t get enough work and a timely salary. According to CMIE data, the total number of employed people from January 2016 to December 2022 has fallen, so we have fewer people employed, while at the same time, working age population has gone up. He also reminded us that the finance minister didn’t even use the word unemployment in her speech.
Dr Sonia George praised the Saptarishi program but questioned as to who are going to be the sufferers of this increased Capital Expenditure that is being financed. She also questioned the marginal increase in the funds for National Rural Livelihood Mission which is the basis for the development of rural women.
Prof Utpal K De reminded us that while the discussion on this year’s Budget is important, there should be a mandatory assessment of what exactly has been achieved in the previous years. He raised doubts about the digital currency initiative that was introduced last year, however, he also said Ms Sitaraman was right to promote environment friendly vehicles in the economy.
Prof RS Ghuman highlighted the various fund slashed for agriculture and rural development schemes like MNREGA which is likely to affect the rural economy. Schemes like Fasal Bima Yojna and Kisaan Samman Nidhi have seen a reduction of funds by around 12%. He said MNREGA has been targeted for many years. From these cuts, he understood that the food security and the employment guarantee of the nation are under threat. He also reminded us that there was no mention of MSP in the budget, which was a contentious issue between the government and the farmers.
Dr Sandhya S Iyer highlighted there was a lack of the vision statement in either the Economic Survey or the Budget which is being touted as the first budget for Amrit Kaal. She said the Budget was more imaginative than visionary. She also wanted the Budget to focus more on the rural non-farm sectors and the MSMEs. She said she was glad that a scheme like Pradhan Mantri Vishwakarma Kaushal Samman had been started and said this scheme would place the artisans back into a public policy structure. Her discussion was based more on the micro perspective which she thought was blatantly ignored in the recent budget.
After a question and answer session, the program was concluded with closing remarks by Prof Suchita Krishnaprasad, who thanked and praised the team at the IMPRI Impact and Policy Research Institute for hosting a successful panel discussion and for ensuring the smooth functioning of the event. The event was concluded with a final vote of thanks by Ms Fiza Mahajan on behalf of #IMPRI Center for Work and Welfare (CWW).
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Acknowledgement: Jiyan Roytalukdar, a research intern at IMPRI

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