How can Budget 2024 boost job creation

Key Takeaways

• Research by the World Bank (2020) suggests allocating substantial funds to labor-intensive infrastructure projects to encourage mass employment.
• Consider tax breaks and investment incentives for angel investors and venture capitalists to further encourage investment in startups.
• Increase wages under MGNREGA, support local value chains and agro-processing, and develop infrastructure and training programs in rural areas.

Mumbai, January 25: India's job market stands at a crossroads. Economic growth continues to gain momentum, but job creation hasn't kept step, raising concerns about unemployment and underemployment. The upcoming 2024 Interim Budget presents a crucial opportunity to address this challenge and ignite a surge in employment across diverse sectors.

Even so, it is foresight and intentionality rather than wishful thinking that could ensure the upcoming budget, and those to follow, be a catalyst for nationwide job creation.

Here's how the Budget 2024 could potentially boost employment, from the purview of experts.

Infrastructure

Research by the World Bank (2020) suggests allocating substantial funds to labor-intensive infrastructure projects like rural roads, renewable energy installations, and irrigation canals yields the highest job creation per unit of investment.

Strategic allocation of resources to projects that employ the masses of the skilled and unskilled workforce can improve employment rates and consequently affect consumption positively.

Rural Potential

India's vast rural landscape holds immense potential for employment. The upcoming budget presents a golden opportunity to open this potential wide and revitalize our villages.

As highlighted by a 2022 Centre for Sustainable Agriculture study, increasing wages under MGNREGA can significantly boost rural incomes. This would not only improve living standards but also stimulate local economies as increased purchasing power fuels local businesses.

Furthermore, NITI Aayog's 2023 report emphasizes the importance of empowering local value chains and agro-processing in rural areas. By allocating budget funds to support infrastructure development, training programs, and market linkages for these initiatives, the government can create a wealth of income and employment opportunities in villages.

Production-Linked Incentives

The upcoming budget offers a strategic chance to supercharge job creation through targeted expansion of Production-Linked Incentive (PLI) schemes.

By tying PLI incentives to achieving defined job creation targets and mandating skill development programs within beneficiary companies, the budget can ensure a direct translation into employment opportunities and a future-ready workforce.

Furthermore, collaborating with Invest India and other agencies to streamline application and approval processes can encourage wider participation and revive the full potential of PLI schemes. This strategic approach withholds the potential to transform PLI into a powerful engine for inclusive and sustainable economic growth, empowering millions of Indians with new job opportunities across diverse sectors.

Entrepreneurship

The budget presents a great opportunity to open the immense potential of entrepreneurship for job creation.

Creating a financial bridge through partnerships with SIDBI and MUDRA to launch loan guarantee schemes and venture capital funds specifically targeted at startups could potentially address the chronic funding gap highlighted by NASSCOM reports. Thus, providing crucial financial oxygen to fuel innovation and growth

Moreover, considering tax breaks and investment incentives for angel investors and venture capitalists to further encourage investment in startups would effectively create a virtuous cycle of funding and growth within the startup ecosystem.

Exports

Unbridling India's export prowess and attracting foreign investments can be powerful engines for job creation. Offering tax breaks and subsidies for companies setting up export-oriented units in SEZs, focusing on sectors with high job-creation potential, as per SEZs Authority, can attract export-oriented investments.

Consequently, as per the Department of Industrial Policy and Promotion (DIPP), providing targeted incentives for high-job-creating sectors like electronics manufacturing and renewable energy could then be fuel required for large-scale job creation through foreign investments.

Manufacturing

Financial support for MSMEs, the lifeblood of manufacturing, alongside export promotion measures and targeted FDI attraction in high-job-creating sectors renewable energy, auto components, electronics, etc. should be considered a priority,

Furthermore, as per CII and FICCI reports on manufacturing competitiveness, the allocation of funds to modernize industrial corridors and special economic zones (SEZs), are no longer mere recommendations, but imperatives.

Conclusion

The 2024 budget offers a critical window to address the pressing need for job creation in India. This blog outlines necessary steps across key sectors, from manufacturing to infrastructure, alongside skilling initiatives. While further discussions and refinements must be considered, the time for action is now. By translating the thoughts of industry experts into efficient implementation, we can untether the scope for widespread employment opportunities and pave the way for a more prosperous future for all Indians.