RBI Data on Job Creation A Shot in the Arm for Modi Sarkar Ahead of Budget

A recent RBI data saying India has added 2.5 times more jobs in the financial year 2023-24 — the highest since 1981-82 — has given the perfect ammunition to the government and the finance ministry to counter the perception being spread by the Opposition that governance is crippled and slowed down. Interestingly, the growth has been registered both in the agricultural as well as the manufacturing sector.

The timing also gives a cue to the finance ministry, which is now feverishly working on the first general budget of the new government.

Top ministry sources have confirmed to News18 that the focus of the budget, apart from on middle class, women and tax payers, will primarily be on job generation. In fact, the government — as well as the economists — are convinced that if the focus is kept on rural job generation, it will spur manufacturing and add to economic growth.

Sources say focus is likely to be on labour-intensive sectors, MSMEs, and agricultural infrastructural development. All this will offer job opportunities and could have long-term policy impact, which could also address the 5.1 per cent fiscal deficit.

Apart from economic factors, it is the political consideration which is putting pressure on the government to ensure that the job scene becomes better. The Opposition’s relatively good performance in the Lok Sabha polls is also based on the fact that it has been able to capitalise on the sentiment and narrative that unemployment is a problem which the BJP has been unable to address. While the GDP growth has been at about 7 per cent, economists are concerned that even this may not be able to fulfill the job requirement soon.

This is one reason why the ministry is mulling extending and broadening the production linked incentive scheme (or PLI) which it feels could encourage domestic growth and generate jobs. In most of the jobs in the manufacturing sector, for example in the low-skilled category, the retrenchment is also high.

While the government is reticent on tax slashes as the manoeuvrability in this sector is limited, the budget’s big stress will be on jobs. With this, the government and BJP hope to send a feel-good message and also counter the Opposition.