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Driving India's economic growth with strong measures in interim budget 2019

Riding on the back of programs such as 'Make in India' and 'Digital India', 2018 paved way for initiatives to strengthen the economic base of the country by focusing on development at a grass-root level

Abhijeet Mukherjee        Last Updated: January 31, 2019  | 16:56 IST
Driving India's economic growth with strong measures in interim budget 2019

The interim Budget to be presented by the government on the 1st of February will lay a foundation for the economic agenda to be drawn upon by the forthcoming general elections. Although, it will likely not include radical measures, since it will only serve for a part of the upcoming financial year, it can still be expected to cover various important aspects. Making provisions for the further progress on skills, employment, as well as a deeper integration of technology into the workings on this nation, the Budget will hint at the potential of socioeconomic growth over the next few years.

Riding on the back of programs such as 'Make in India' and 'Digital India', 2018 paved way for initiatives to strengthen the economic base of the country by focusing on development at a grass-root level. On the one hand, the spirit of 'self-employment' and 'entrepreneurship' is being fostered by empowering micro, small and medium enterprises (SMEs). On the other hand, digitization and integration of next generation technologies is being given a boost. A direct result of this can be seen in the fact that Production and Manufacturing sectors have seen a surge in employment, registering a 54% YoY increase in e-recruitment in 2018 recorded by Monster Employment Index. With the interim Budget being proposed, it can be expected that provision to take this further will be made.

The Budget can also be expected to make provisions for the expansion of Digital India. Prime Minister Narendra Modi has spoken of the Industrial Revolution 4.0 gearing up to take its full form in 2019. The fast-growing market size, digital Infrastructure, and assimilation of technologies like artificial Intelligence (AI), machine learning, blockchain, internet of things, and big data will also contribute to the tremendous opportunity for employment. Last year the government doubled its allocation to $480 million for 'Digital India' with a special focus to research in AI and other new emerging technologies. Expected to continue in this Budget, this opens avenues for skill development and educational reforms in accordance with the 21st century job requirement, leading to better job opportunities for both the unemployed as well as those looking for lateral growth.

Moreover, the focus of 2019 interim Budget is also expected to be on further strengthening MSMEs. Bourgeoning across the country, MSMEs enable employment in a manner much different from larger, established enterprises. The decision by the GST Council to exempt MSMEs with annual turnover under Rs. 40 lakhs from registration and payment of GST has reduced the burden that these relatively vulnerable entities bear. Slashing the Corporate Tax by 25%, the government can boost the growth of these organizations and contribute towards the creation of more jobs.

The Budget must also make provisions for the rapid growth of gig economy, a market of people offering to work on short term contracts or freelance work. Number of highly skilled as well as experienced people shifting towards gig economy cannot be ignored as it is expected to touch 30-40 percent of the global job market by 2025. The concept is also aligned with the government's push towards self-employment. However, by bringing them under formal economy, the government can create a structure of working hours and benefits for these people and cover them under the social security programs. With this Budget, the government can also allocate funds towards skilling gig economy workers to move up the growth curve.

A stronger economy is destined to fuel an increase of job and employment in the country. Playing a crucial role in shaping the economy, the Budget will influence the overall employment generation and skill development in the country, and work as a catalyst of sustainable socioeconomic progress. Thus, it is important that the measures of the Budget account for the development trends being witnessed today and are aligned with the potential of tomorrow.

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