Job Creation After Covid Pandemic Will Remain A Challenge, What Can Nirmala Sitharaman Do In Budget

With less than two weeks to go for the Union budget, expectations about Big Bang announcements have risen. Not least because Finance Minister Nirmala Sitharaman has herself talked about wanting to see a “post-pandemic budget never seen before in a hundred years.” It is not clear what she actually meant by that, but it has given rise to hopes for another 1991 kind of breakthrough budget-cum-liberalisation package from the government.

With growth delinking from jobs in an era of massive infusions of capital and digital technology, significant sums must be invested to subsidise new job creation and elimination of a large chunk of social security costs – especially the employee’s contribution to provident fund and medical insurance.

Job creation needs a focus on incentivising sectors that are labour-intensive, lowering the cost to firms for taking on additional employees, and increasing the take-home salaries of new workers. This is the sustainable way to boost demand and jobs, which then feed into each other in a virtual cycle of growth and jobs.

Given the disproportionate impact Covid has had on various sectors, special pick-me-ups should be targeted at sectors that bore the brunt of the pandemic’s economic costs – like tourism, some kinds of services, etc. A broad-based demand stimulus is not required, but focused spends on sectors that generate a large number of jobs and where the economic devastation has been large is the need of the hour.

#Employment #Jobs #Budget2021 #NirmalaSitharaman

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