Categories: BusinessIndia

AD Singh RJD speaks on how budget 2022 passed across unemployment

According to figures from the Centre for Monitoring Indian Economy (CMIE), India’s unemployment rate reached a four-month high of approximately 8 per cent in December, up from 7 per cent and 7.75 per cent in November and October 2021. It has reached its highest level since August when it was 8.3 per cent. But, the Finance Minister made no mention of the ‘crisis’ of unemployment that is currently affecting the Indian economy. AD Singh RJD, an elected Rajya Sabha member from RJD, brings forward the issue of unemployment our nation is currently experiencing.

Every year, around five million young people, the majority of whom are educated, enter the labour field in search of work. There were already 30 million jobless in 2019, and at least 10 million more had been added since the COVID-19 pandemic began. And, between 2019 and 2020, 32 million semi- and unskilled migrant workers returned to agriculture with little succour. The most recent development is a reversal of the trend of absolute labour reductions in agriculture from 2004 to 2019.

Notably, in December 2021, the urban unemployment rate increased to 9.30 per cent, while rural employment remained at 7.28 per cent. Both urban and rural jobless rates increased significantly from the previous month’s figures of 8.21 per cent and 6.44 per cent, respectively.

AD Singh RJD notes, “Higher Mahatma Gandhi National Rural Employment Guarantee Act (MG-NREGA) allocations (already hampered by insufficient budgets in 2021), increased support to states for targeted job creation, enhancement of PLI schemes for job creation, and the introduction of an urban version of the MG-NREGA plan (at least on a smaller scale) were all seen as part of the expectations to address the ‘unemployment’ crisis head-on. We didn’t hear anything on either of these, which is unfortunate.” He informs, “In FY’21, the Union government set aside Rs 60,000 crore, which was afterwards increased to Rs 1.1 lakh crore, however, there were still arrears to be paid to states in FY’22. It set aside Rs 70,000 in FY’22, to which additional Rs 15,000 crore was added, but this was insufficient.”

The spike in unemployment has been attributed to sluggish economic activity and low consumer confidence, both of which have been harmed by the rise in COVID-19 cases and the Omicron variant’s introduction around the world, according to AD Singh RJD. The unorganised area in India’s broken labour markets and uneven employment landscape has mostly been split. During the pandemic, the unorganised area was the hardest hit. However, after the state-wide or national lockdowns were lifted, it proved to be the most robust. In India’s labour market, the majority of women work in the vulnerable unorganised and informal sectors.

According to a recent study, the top concerns among urban Indians are unemployment and the coronavirus. Indians are concerned about unemployment, with job security being at the top of their list of concerns. According to the 2017-18 PLFS data, India’s female labour force participation rate (LFPR) – the share of working-age women who report either being employed or available for work – is as low as 16.4 per cent (in the 15-29 age group) and 33 per cent (in the 35-39 age group), without taking the pandemic effect into consideration. More than two-thirds of women in the prime working-age range of 30-50 are not in the workforce, with the majority claiming to be ‘attending to household tasks alone’.

Notably, in any event, the Union government does not appear to recognise that aggregate demand was in a slump from FY’21 to FY’23. Similarly, the increased MSMEs allocation ignores the fact that, according to the first advance estimates of GDP for FY’23, per capita, private consumer expenditure fell by 5 per cent in real terms between FY’22 and FY’23. The pandemic-driven economic collapse of the unorganised sector and MSMEs is largely the outcome of a drop in aggregate demand.

According to the finance minister, who presented the Union Budget for 2022-23, the production-linked incentive (PLI) across 14 industries has the potential to generate 60 lakh employment. She went on to say that the PLI scheme had gotten a huge reaction. “The PLI scheme for achieving Aatmanirbhar Bharat has had an excellent response, with the potential to create 60 lakh new jobs,” FM Nirmala Sitharaman remarked in Parliament. “However, with unemployment rates rising by leaps and bounds, Nirmala Sitharaman’s tacit recognition that India is grappling with massive unemployment and that the government plans to create 6 million jobs over the next five years was maybe essential. Given the magnitude of the problem, though, her advice may be too little, too late,” notes RJD member, AD Singh RJD.

Worldwide, coronavirus has emerged as the top-most cause of alarm due to the proliferation of the omicron variety. According to the report, the pandemic is the third most concerning issue for Indians. The Union government’s fiscal stimulus packages over the last two years have not been large enough to reverse the employment losses caused by the COVID-19 lockdowns, which were added to an already-existing labour shortage. This is what has contributed to India’s rising poverty and inequality.

Srinivasan Vedam

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