The year 2020 was marked with plenty of hurdles, right from seeing a negative growth rate in our nation’s GDP and a series of growth contractions which ended up in rising inflation and unemployment. Indian economy had to go through a turbulent phase after the Coronavirus pandemic weakened all sectors of the economy hinting towards a prolonged slowdown.
However, if we talk particularly about certain sectors, consensus says that the economic slowdown was majorly a result of weakening demand specifically in rural areas. The decrease in demand has not only affected the overall growth rate but it has also declined the availability of jobs in our economy which was already struggling with the spectre of jobless growth.
According to Mumbai based think-tank Centre for Monitoring Indian Economy, India’s unemployment rate climbed to a six-month high of 9.06 per cent in December 2020.
Back in 2019, when Mrs Nirmala Sitharaman, our present Finance Minister prepared her first budget; she was very enthusiastic and optimistic about the outlook of having a “New India” that was on its path of becoming a five trillion economy in a few years. But with time, I think the situation has just got worse and with the shock of COVID 19, the goal has taken a significant setback.
The Budget 2021 brings with itself some challenging and enviable responsibilities shouldered on her and among all these, the Finance Minister’s way of tackling the growing issue of unemployment in our country would be the most awaited.
During 2020, the Coronavirus outbreak triggered a unique and destructive job crisis in India when around 10 million daily wagers fled cities during the government-mandated lockdown. Towards the end of the year, the rural economy failed to absorb workers due to seasonal weakness and this led to a sharp rise in the unemployment rate. The partial rise of Labour participation rate(LPR) also became one of the contributing factors for the rise in the unemployment rate in December. LPR refers to the percentage of people above the age of fifteen who participate in the labour market by having a job or either looking for one. If we try to compare statistically, the LPR for December was 40.6 per cent compared to 40 per cent in November. The employment rate fell by 5 million to 389 million from 394 million in November out of the 427 million who already participated in the market and were a part of it, thereby making the number of people without a job at 38 million.
To combat the grievances caused by COVID 19 the government had also launched a package worthRupees 20 lakh Crore under Atma Nirbhar Bharat package. Apart from that, Atma Nirbhar Bharat Roger Yojana was also launched in November by the government which announced subsidy to companies for two years for recruiting new employees for their company after October 2021. Although these programs were launched to cause a rise or an incentive in the creation of new jobs, these quick fixes by the government could not contribute much to raise the employment opportunities in the country.
Last year, we also got a reminder about how unorganised Indian labour market is but the government had a very different take on the entire scenario. The government resorted to policies related to tax cuts and direct incentives to industries that could help in providing some boost to the unstable Indian Economy, but they somewhere failed to understand that they have a wider issue at hand to deal with which is, tackling the issue of job creation for the skilled but informally employed people in our country.
With the budget 2021 is yet to be announced, people are waiting to see if the government is thinking of adopting any specific transformative solutions to solve the grave problem of unemployment in India. While many suggest that the government should try to leverage the power of the young population and make concrete efforts towards youth-focused interventions by announcing measures to re-skill them in education, health care and hospitality sectors to solve the issue; we can also not forget that there are other sectors too which are interrelated to this issue and require a lot of attention.
Well, if we think that Budget 2021 is going to bring in measures that are going to solve the problem of Unemployment in India completely, that might be a very far fetched idea for now. However, given the limited scope to spend we hope that our Finance Minister Mrs Sitharaman, thinks of a more targeted approach to solve the job crisis in India.
Till then, we can only hope that the new budget will be a window of opportunity to bridge the gap that has been created because of the lost opportunities during the pandemic.
Written by- Muskaan.
Sources :
The Mint
The Economic Times
Quartz
The Indian Express
Forbes India