Budget 2025 overlooks joblessness

Analysis: Budget 2025 & Employment Concerns

1. Shift in Budget Priorities
   • The 2024 Budget had focused on employment and skill development, announcing the Prime Minister’s Package for 4.1 crore youth.
   • Budget 2025 largely ignores direct employment generation; the package is not mentioned, and its future appears uncertain.
   • Employment-linked schemes are under discussion but no concrete actions are outlined.
2. Youth and Graduate Unemployment
   • PLFS 2023–24 data shows youth unemployment at 10.2% and graduate unemployment at 13%.
   • The share of workforce in regular/salaried jobs has declined post-pandemic; informal and agricultural employment has risen.
   • Real wages for self-employed and salaried workers have declined, squeezing the majority of working people.
3. Fiscal and Expenditure Trends
   • Real GDP growth projected to fall from 8.2% to 6.4% in 2024–25.
   • Government capital and welfare expenditure cut sharply, with declines in MGNREGA, Jal Jeevan Mission, PMAY, rural development, agriculture, education, health, and food subsidy.
   • Cuts risk reducing rural consumption and employment generation, worsening inequality.
4. Income Tax Rebate Strategy
   • Income tax rebate raised for earners up to ₹12 lakh, benefiting only ~2.8 crore taxpayers (~22% of salaried workforce).
   • Limited impact on broader consumption demand; indirect tax cuts could have been more equitable.
   • Concentrates relief in urban, higher-income groups, while majority of workers remain unaffected.
5. Labour Market Implications
   • Cuts in employment-linked schemes and rural expenditure may worsen joblessness and informal employment.
   • Surplus labour, high inflation, and declining real wages exacerbate rural distress.
   • Corporate tax cuts and higher profits of Nifty 500 companies do not translate into higher investment or employment, limiting trickle-down benefits.
6. Economic Critique
   • Budget relies on urban-focused tax rebates rather than direct demand stimulation in rural areas.
   • Reflects a deflationary approach, prioritizing fiscal consolidation over employment and inclusive growth.
   • Signals a lack of innovative solutions to tackle persistent unemployment and wage stagnation.
     
     Updated- February 03, 2025 01:55 am | The Hindu