Budgeting for jobs, skilling and economic revival | The Hindu

2020-01-25 | 4 minutes

Context: The government will present the Budget for the year 2020- 2021 on 1st February 2020.

Unemployment in India:

  • Unemployment Rate (UR): Unemployment Rate (UR) is one of the key unemployment indicators included in the Periodic Labour Force Survey (PLFS). It is equal to the percentage of persons unemployed among the total employed and unemployed persons. PLFS report shows that UR during July 2017- June 2018 was 6.1%. This was the highest in the last 45 years. PLFS report considers people of 15-29 years age as youth. As per the PLFS report, UR for urban youth category is 22.55%.
  • Labour Force Participation Rate (LFPR): Labour Force Participation Rate (LFPR) is also a key unemployment indicator in PLFS. LFPR is the percentage of employed and unemployed persons in the total population. As per PLFS, LFPR for the persons aged 15 years and above has lowered to 46.5% and to 37.7% for urban youth.

Economic slowdown and structural factors responsible for increasing unemployment in India:

  • Economic slowdown: Economic slowdown is responsible for increasing unemployment. In 2nd quarter of financial year 2019-20, GDP growth remained at 4.5%. This is lowest in last six years.
  • Aggregate investment and capacity utilization: Currently, aggregate investment is less than 30%. During last 15 years, aggregate investment stood at 35%. Current aggregate investment rate at 30% is lower than 15 years average. Capacity utilization in private sector is also low. It has declined to 70-75%.
  • Construction and real estate sectors: Construction sector comes at second place after agriculture in the list of employment generating segments of Indian economy. It provides employment to nearly five crore people and supports growth of sectors like cement and steel. But, construction, real-estate and infrastructure sectors are facing crisis. Real estate projects are struck in legal disputes involving home-buyers, developers, lenders and law enforcement agencies like enforcement directorate. Legal disputes are not getting resolved due to overlapping jurisdictions of multiple authorities such as Real Estate Regulatory Authority (RERA) and National Company Law Tribunal (NCLT). Non-Banking Financial Companies are facing the problem of increasing Non-Performing Assets due to slow and difficult restructuring and liquidation of bad real estate projects.

Suggestions for increasing rural employment: In the current financial year, budgetary allocations for PM-KISAN have not been utilized. Budget should allocate more resources to schemes like PM-KISAN and MGNREGA are important for increasing demand in rural areas as people in rural areas consume more goods and services. So, the revival of demand in rural areas will increase growth and employment.  More budgetary allocation for irrigation projects and infrastructural facilities in rural areas such as roads, cold storage and logistical chains will lower unemployment in rural India. More budgetary allocation for irrigation projects and infrastructural facilities will increase the productivity of Indian agriculture and the income of farmers. Integration of farms with mandis will lower wastage of fruits and vegetables and prevent farmers from the negative impact of inflation.

Suggestions for increasing urban unemployment:

  • Increasing demand for housing: There is a need for increasing demand for housing. This can be done by increasing the limit of tax exemption on home loans. Government has approved setting up of Rs 25000 crore Alternative Investment Fund for housing projects. The government should immediately use the fund to complete pending housing projects. A single adjudication authority for unresolved projects can be announced.
  • Infrastructure investment and projects: Successful implementation of 102-lakh-crore National Infrastructure Pipeline (NIP) will increase investment in infrastructure by 2%-2.5% of the GDP annually. Investment from the private sector and states will account for 60% of NIP. As there is non-availability of private investment in infrastructure due to regulatory difficulties, the government should take measures to provide regulatory certainties to the private sector. Due to GST, states finances are also not in good condition. Ministries for civil aviation and roads could not use their funds in the current fiscal. The government should focus on the completion of pending projects. Timely completion of infrastructure projects is essential for economic growth also.
  • Cost of doing business for SMEs: SMEs provided employment to more than 11 crore people. GST rates on inputs required for products of the SME industry are more than GST rates on final goods. The government compensates higher GST rates on inputs through input tax credits. As per the Federation of Indian Export Organisations (FIEO), input tax credits worth Rs 20,000 crore are pending with the government. Money pending with government in the form of input tax credit increases the cost of doing business for SMEs.
  • Filling existing jobs: Over 2 lakh vacancies are pending in various government departments. Filling these vacancies will lower unemployment among youth. Cheap and high-quality vocational training programmes will help youth in securing jobs in private sectors where there is emphasis on practical skills and work experience.


The future of India’s economy depends on government steps aimed at ensuring the availability of employment to the youth of India, which forms a significant part of India’s demography. The government should focus on providing employment to youth in order to revive economic growth through Budget for 2020- 2021.


Real Estate Regulatory Authority (RERA):

  • The Real Estate (Regulation and Development) Act, 2016 provided for setting up RERA in each state.
  • RERA is a regulation authority of real estate sector.
  • RERA regulates transactions in residential and commercial projects.
  • It is an adjudicatory body to provide speedy resolution of disputes in real estate sector.
  • All commercial and residential real estate projects with more than 500 square metre area or eight apartments can be launched after registering with RERA.
  • Real estate agents should also register with RERA.