India’s Union Budget for 2024-25, unveiled with much fanfare, has set a grand objective of generating 4.1 crore job opportunities over the next five years. This translates to 8.2 million jobs annually, a commendable ambition for a nation poised to see its working-age population peak by 2041. However, beneath the surface of these bold promises lies a complex web of economic realities that the budget’s prescriptions fail to adequately address. This analysis delves into the shortcomings of the budget’s approach to employment and women’s empowerment, examining how its strategies might fall short of addressing India’s structural employment challenges and disparities in women’s economic participation.
The Unemployment Conundrum: More Than Just Seasonal
India’s employment challenges are deeply entrenched and cannot be solely attributed to seasonal fluctuations. The Economic Survey 2024 reports a seemingly optimistic decline in unemployment to 3.2% for 2022-23, alongside a rise in youth and female workforce participation and a rebound in the organized manufacturing sector. While these figures suggest positive trends, they starkly contrast with other reports and real-world observations.
According to the Centre for Monitoring Indian Economy (CMIE), the unemployment rate for 2023-24 stands at 8%, a significant increase from the 7.5-7.7% range observed in the previous two years. Additionally, the employment rate, which represents the proportion of working-age individuals who are employed, dropped slightly from 38% in May 2024 to 37.6% in June 2024. The International Labour Organization’s (ILO) Employment Report 2024 further corroborates these findings, painting a less rosy picture of India’s employment landscape.
This discrepancy highlights a crucial issue: the Economic Survey’s optimistic projections may not fully capture the structural and persistent nature of unemployment. India’s job market is plagued by challenges that go beyond seasonal variations, including a high proportion of informal employment, stagnant manufacturing sector growth, and insufficient structural transformation.
Women’s Employment and Empowerment: A Disjointed Strategy
The 2024 budget allocates a substantial Rs 3 trillion towards women’s empowerment, but the strategy for deploying these funds lacks coherence and precision. The budget’s focus on women’s participation appears as a secondary consideration rather than an integrated component of its core policies. This disjointed approach fails to address the systemic barriers that women face in the workforce.
Statistics reveal a striking gender disparity in employment. According to the latest Periodic Labour Force Survey (PLFS), workforce participation rates for men and women were 68.4% and 16% respectively in 2017-18, and improved to 71.5% and 24% by 2022-23. While these figures show some progress, they still underscore a significant gender gap. Furthermore, the National Family Health Survey (NFHS) data reveals a decline in employment among married women, from 42.8% in 2005-06 to 31.9% in 2019-21, compared to a relatively stable rate for men.
Research by Rozi Kumari and Rupayan Pal, based on World Bank Enterprise Surveys from 2014 and 2022, highlights a troubling trend: women’s ownership and participation in top management roles within registered private firms have decreased despite economic growth and various government programs aimed at promoting women’s entrepreneurship. This decline underscores the inadequacy of the budget’s measures to address the real issues faced by women in the workforce.
The Challenge of Educated Unemployment
A significant aspect of India’s employment challenge is educated unemployment. The All India Survey on Higher Education (AISHE) portal reveals that in 2021-22, there were 10.27 million graduates and certificate holders, with around 51.24% being female. Among these, approximately 8.5 million were undergraduates and postgraduates. The disconnect between educational qualifications and employability is a major concern.
Many graduates struggle to find suitable employment, highlighting a critical gap in aligning educational outcomes with job market demands. The budget’s lack of focus on this issue is a missed opportunity to address a crucial aspect of employment generation. The current strategies do not adequately address the need for a systematic approach to enhancing the employability of educated youth.
Budget Proposals: Are They Practical?
The budget introduces five new schemes aimed at expanding employment and enhancing skills. These schemes include:
- Scheme A: A direct wage subsidy of Rs 15,000 per month for 2.1 crore first-time employees.
- Scheme B: A wage subsidy for both employers and employees to benefit first-time employees, particularly in the manufacturing sector.
- Scheme C: Support for employers through EPFO contributions for two years, up to Rs 3,000 per month.
- Scheme D: Upgrading 1,000 Industrial Training Institutes (ITIs) with support from industry and states.
- Scheme E: A grand internship project for youth in 500 top companies, with an average of 4,000 interns per company per year, receiving a monthly allowance of Rs 5,000 for 12 months.
While these schemes aim to incentivize private sector employment and skill development, their implementation faces several challenges. For instance, the effectiveness of wage subsidies in promoting formal sector employment and integrating informal workers remains uncertain. Additionally, the success of the internship project hinges on the willingness of companies to participate and the adequacy of CSR funds to cover part of the training costs.
Private Sector and Economic Disparities
The role of the private sector in driving employment is crucial. However, the budget’s approach—focused on tax reductions and incentives—may not adequately address the broader economic challenges. The reduction in MGNREGA allocations from Rs 90,806 crore in 2022-23 to Rs 86,000 crore in 2024-25 is a concerning development, particularly given the program’s significance in providing income support to the poor. Increasing the disposable income of the middle class through tax benefits does little to address the needs of lower-income groups who have a higher propensity to consume.
Moreover, the budget’s measures to enhance the entrepreneurial ecosystem, such as abolishing the ‘angel tax’ and the Benami Transactions Act, may not effectively address the core issues affecting economic growth and employment. The total foregone revenue of Rs 1.09 trillion, as outlined in Annexure 7, raises questions about the efficacy of tax cuts in promoting growth and employment, as noted by economists Thomas Piketty, Abhijit Banerjee, and Esther Duflo.
The Need for a Radical Reassessment
In summary, while the 2024 budget presents ambitious targets for employment generation and women’s empowerment, it falls short in addressing the structural issues underlying unemployment and gender disparities in the workforce. The lack of a clear, actionable strategy and the disconnect between budgetary measures and real-world economic challenges underscore the need for a radical reassessment of the budget’s approach.
To effectively address India’s employment challenges and ensure equitable economic growth, the budget’s strategies must be revised to align with the structural realities of the labor market. This includes a more targeted approach to women’s empowerment, a focus on bridging the gap between education and employability, and a comprehensive plan to stimulate private sector employment and support lower-income groups.
Conclusion
India’s 2024-25 budget, while ambitious in its goals, reveals significant gaps in addressing the country’s pressing employment and gender disparity issues. The budget’s promises of job creation and women’s empowerment are overshadowed by a lack of clear, actionable strategies and a disconnect from the real challenges faced by the workforce. A more nuanced and informed approach is essential to ensure that these promises translate into tangible benefits for India’s economy and its people. The path forward requires a radical overhaul of current strategies to effectively tackle structural unemployment and promote inclusive economic growth.
Sunil Garnayak is an expert in Indian news with extensive knowledge of the nation’s political, social, and economic landscape and international relations. With years of experience in journalism, Sunil delivers in-depth analysis and accurate reporting that keeps readers informed about the latest developments in India. His commitment to factual accuracy and nuanced storytelling ensures that his articles provide valuable insights into the country’s most pressing issues.
