While the budget lays focus on job creation, skilling and infra development, it outlines a comprehensive strategy to achieve ‘Viksit Bharat’ by 2047
The first budget of the Modi3.0 government, presented on July 23, is important in many ways as it lays significant emphasis on self-sufficiency, it also outlines the vision of economic development to make India a developed nation by 2047. 

Even as focus is laid on improving productivity, enhancing the efficiency of markets, and leveraging technology, the budget 2024-25 outlines a comprehensive plan for economic growth and development, emphasizing next-generation reforms.

Focus of budget 
                   
Broadly the budget is focused on four themes of employment, skilling, MSMEs and middle class and chart out nine priority areas that can drive India’s economic growth and vision of developed country (Viksit Bharat).

Employment

A major highlight of the budget is to create opportunities for 4.1 crore youth over the next five years. With a central outlay of Rs 2 lakh crores, this initiative aims to address employment, education, and skilling needs.
It should be remembered that employment is the crucial link between growth and prosperity (quality life). It is not just about the way to bring income but also about dignity, self-worth, self-esteem, self-respect, and standing in the family and community, as mentioned in this year's economic survey 2023-24 launched a day before the budget presentation in the parliament.

The UN projection of population shows that India will have a population of close to 1.7 billion by 2065 before it starts declining showing a demographic window to utilize. The Asia 2050 report, launched by Asian Development Bank, highlights that 21st century belongs to Asia with India becoming a major actor.
This is very much possible if emphasis is laid on sectoral and spatial redistribution of the workforce, skill development, and increase in the workforce participation of women. Creating enough jobs is, therefore, important given the demographic dividend and the challenges of AI.

The annual employment data (known as PLFS survey) shows that employment situation in India between 2017-18 and 2022-23 significantly improved. The labour force participation rate (LFPR) increased from 49.8 % in 2017-18 to 57.9 % in 2022-23, whereas the unemployment rate declined from 6.0 % in 2017-18 to 3.2% in 2022-23.

This is a healthy indicator for the country considering the large young workforce in India. According to an estimate of an economic survey, the Indian economy needs to generate an average of 78.5 lakh (7.85 million) jobs annually in the non-farm sector until 2030.

To this regard, the government in the budget has announced the launching of three schemes for employment linked incentive as part of the Prime Minister’s package to expand formal sector employment.  These three schemes are: A) First time employees; B) Job creation in manufacturing sector; C) Support to employers.

Under the first-time employees’ scheme, a one-month wage (up to Rs. 15,000) will be provided to all new entrants in the formal sector and it is expected that in a two-year period 21 million persons with a central outlay of Rs. 23,000 crores will be employed in the formal sector.

Schemes B and C—encourage substantial hiring of first-time employees in the manufacturing sector and are applicable to corporate entities and those non-corporate entities with a 3-year track record of EPF contributions.

Both these schemes aim to generate two to five million new jobs in two years’ period. The internship scheme in top 500 companies is designed to benefit 100 million youth between the age group of 21 and 24 years with monthly allowance of Rs.5,000 to those who are not employed and engaged in full time education.

To increase the participation of women in the workforce in the urban labour market, working women hostels and crèches will be established in collaboration with industry.
But it cannot be ruled out that in this budget major thrust has been given on job creation which will be continued in the forthcoming years. Corporate sector has been asked to take active responsibility for job creation.

Skill development

Skill development emerges as another cornerstone of the budget. This has been a core objective of the government since 2014. The government also set up a separate ministry to foster the skilling, upskilling and reskilling of youth as per the need of the industry.

The Budget 2024-25 prioritizes skilling as it equips the workforce with the necessary competencies to meet industry demands, fostering innovation and productivity.

With one of the youngest populations, a median age of 28, India can harness its demographic dividend by nurturing a workforce that is equipped with employable skills and prepared for the needs of the industry.

65% of India’s fast-growing population is under 35, and many lack the skills needed by a modern economy. Estimates show that about 51.25 % of the youth is deemed employable.
 However, it must be noted that the percentage has improved from around 34% to 51.3% in the last decade.

The government in the budget has proposed to upgrade 1000 industrial training institutes (ITIs) over a five-year period which help in skilling 2 million youth in trades needed in industry.

Upgradation of infrastructure and course structures are important steps considering the issues of quality in these institutes across states and ownership.

The government has also proposed to launch a model skill loan up to Rs. 7.5 lakh with a guarantee from a government promoted fund. Similarly, a loan scheme of Rs. 10 lakhs will be made available at a lower rate of interest to youth to pursue higher education in India.

Infrastructure development

Boosting infrastructure is another important priority of the government considering the need for sustainable and world-class infrastructure and its strong multiplier effect on the other sectors of the economy.

The government has proposed to spend 3.4 % of GDP this year. The private sector has also been encouraged to actively participate in this process. For that a market-based financing framework will be developed.

Phase IV of Pradhan Mantri Sadak Yojana (PMGSY) will be launched to provide all-weather connectivity to 25,000 rural habitations. PM Awas Yojana in rural and urban areas will help in providing housing needs for the people.

Both these schemes will create a large number of casual wage employment in the rural and urban areas. The government’s capital expenditure of Rs. 11.1 trillion (3.4 % of GDP) is the highest in the past 26 years.

Overall, this is a forward looking budget which aims to place India on a strong footing by strengthening its core pillars. Young and active workforce is a bounty which must be trained and absorbed in the productive sectors to achieve the vision of a Viksit Bharat. 

 ***The writer is  Assistant Professor at ISID, New Delhi; views expressed here are his own