Budgeting for Young India

Richa Mishra | Updated on January 17, 2020 Published on January 17, 2020

Shared concern: Millennials who chose to hire or pool a ride will not forget that the Finance Minister laid the blame at their door for the falling car sales. Photo: G Krishnaswamy   -  g krishnaswamy

Rocked by a falling economy and socio-economic uncertainties, the country’s much-touted demographic dividend is in urgent need of a booster shot from the finance minister

As finance minister Nirmala Sitharaman opens her bahi khata (ledger) on February 1, the one question on everyone’s mind will be: Does it address the social challenges of the economy?

With widespread protests — the epicentres of many falling in university and college campuses — there is all-round worry about young India’s future.

Even as people were struggling to come to terms with the many negative reports about the state of the economy, the widespread fear and uncertainty sparked by the controversial Citizenship (Amendment) Act has led to disruptions in daily life across cities and towns. There is a real fear that the country’s much-touted demographic dividend — a significant chunk of its population is in the working-age group (15-64 years), in contrast to many other rapidly ageing countries — might turn into a liability.

According to the India Skill Report 2020, employability of India’s youth has stagnated over the past three years, and only about 46 per cent of participants are job-ready. “The state of employability has not improved over the last few years, implying the need for more robust actions,” it states. The SBI’s research report ‘Ecowrap’, released recently, is equally worrying. It says that there can be 16 lakh less payrolls (or jobs) in 2020.

Not surprisingly, young India wants Sitharaman’s second Budget to address its concerns by focusing on three areas — education, healthcare and employment generation.

“The consistent air of unrest and aura of hyper-nationalism are pushing us towards a slow rate of growth,” says Sneha Panna, a second year Master’s student at the Centre for the Study of Social Systems in Jawaharlal Nehru University (JNU). “The assertion in a recent Forbes article that India has the worst economy in 42 years is no exaggeration,” she says.

The problem, as many point out, is the lack of credible data. This, economists explain, makes it difficult for policymakers and others to assess the actual size of the challenge, as there is a huge informal sector which is not accounted for in the data on employment and jobs.

“The economy is in the doldrums with a peculiar ‘data crisis’, which has made a concrete diagnosis of the issues facing our economy an almost impossible task,” the 23-year-old student from Jharkhand points out.

The young also hope that the government will make education accessible to all by investing robustly in the sector and improving infrastructure from the primary school level to universities. Panna also wants the government to accord the same kind of importance to social sciences as is normally reserved for technical education, stressing that the two together can help pull the country out of poverty.

The view is echoed by 22-year-old Akhil KM, a student of the Faculty of Law, Delhi University. “In its election manifesto, the Bharatiya Janata Party promised that 6 per cent of GDP would be spent on education, but only 3.3 per cent was spent during the last financial year. Not only has the budget allocation for the Higher Education Financing Agency (HEFA) declined, HEFA’s actual spending too was below the mark,” says Akhil, who is from Kerala.

He adds that funds for Central universities have been reduced, which may have led to the ongoing protests against fee hikes in JNU, and the Delhi University teachers’ agitation against the shortage of teaching staff.

Decrying any move to sell public sector companies, Akhil says this will further rob employees of job security. “Even within the media, we can see how several firms have shut down bureaus and halted new appointments,” he says. “For students completing their education, there is very little chance of finding a permanent job or even one suited to their qualification. So, improving public institutions is a necessity,” he argues.

Any Budget exercise has two sides — expenditure and revenue. If Sitharaman focuses on the expenditure side, then she must also ensure there are enough ways to create revenue. While the government has had no shortage of policy announcements, its weakest link has been implementation, which Sitharaman will need to address.

Gopal Krishna Agarwal, national spokesperson of BJP (Economic Affairs), says that the current focus of the economy is on consumer demand and the Budget will therefore look at ways of increasing consumption. This, in turn, is expected to create jobs.

“The Budget has to focus on economic growth with sector-specific provisions. For example, textile, real estate, construction, Micro, Small and Medium Enterprise, and heavy industries can all propel the economy and be key job-creators,” he says. India, he adds, has “global leadership” in the pharmaceutical and information technology sectors, which can help boost the gross domestic production. “Food processing and agriculture can foster rural economy growth, help in increasing revenue to the farmers, and create liquidity for the rural market,” he says.

The government has to ensure a level playing field for Industry, and correct the inverted duty structure arising from free trade agreements. “All these put together will also help create an improved business environment and lead to jobs.”

Whether Sitharaman manages to successfully juggle these varying demands, her ledger will be closely scrutinised, come B-Day. India’s millennials — who had reacted strongly and adversely to the minister’s comment last year that they, by opting for ride-hailing services, had contributed to the slump in the auto industry — are watching. Very closely.

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Published on January 17, 2020
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