Job creation measures are good, but a lot more needs to be done

That the Narendra Modi government is concerned over the lack of jobs is a truism. Despite a generally good record of managing the economy in the second term, it could not generate employment proportionate to the influx of youngsters entering the job market. This inadequacy hit the BJP prospects in the recently held general elections. So, it’s not surprising that in Budget 2024-25 Finance Minister Nirmala Sitharaman laid a great deal of emphasis on job creation. The measures she has proposed are well-intentioned but they ought to be carefully executed. She announced five schemes to facilitate employment, skilling and other opportunities for 4.1 crore youth over a five-year period with a Central outlay of Rs. two lakh crore. Emphasis is on ‘nudging’ rather than coercing the corporate sector and MSMEs into hiring youngsters. Also, the government is keen on formalization. So, there is a new scheme that will provide one-month wage to all persons newly entering the workforce across formal sectors. The direct benefit transfer of one-month salary in three instalments to first-time employees, as registered in the Employees Provident Fund Organisation (EPFO), will be up to Rs. 15,000.

In the subsequent interactions with the media, the Finance Minister expressed optimism that the new measures will boost the internship programmes of the top 500 corporations. “We are paying for them. The government is giving Rs. 5,000 per month for the 12 months and Rs. 6,000 at the beginning as a one-time payment. Therefore, the payment is coming from us... Companies will be nudged to do this because it is these companies that often tell us that they are not able to get employable, skilled, industry-ready, qualified people,” she said in an interview. Her expectations from India Inc are reasonable but she must also ensure that the Ministry of Skill Development & Entrepreneurship is properly galvanized in this endeavour. The ministry “is responsible for coordination of all skill development efforts across the country, removal of disconnect between demand and supply of skilled manpower, building the vocational and technical training framework, skill up-gradation, building of new skills and innovative thinking not only for existing jobs but also jobs that are to be created.”

Its website says that the aim is to skill on a large scale with speed and high standards in order to achieve its vision of a ‘Skilled India.’ Its performance in the last 10 years, however, leaves a lot to be desired. The lack of skilled manpower was as high in the list of woes of business chambers in 2014 as it is now. The ministry’s grand vision and announcements have rarely, if ever, matched the results it has delivered.

Had it been otherwise, the unemployment scene would not have been as dismal as it is today. The government must also realize the fact that more important than specific employment generating programmes is improving the economic ecosystem, which is possible only by expediting liberalization. On that count, sadly, there were not many announcements in the Budget. Therefore, it is imperative that the government, apart from executing the new measures, speeds up structural reforms so that growth could create more jobs.