Budget Reactions

Dear Sir,

 

Economic inclusion essentially implies that the income growth would be shared by the lower rung, therefore, thrust on 'direct' employment generation scheme lies in the cornerstone of inclusive growth policy. Given the job loss to the extent of 500,000 during October to December 2008 in some sectors surveyed by Labour Bureau and a 3.88 per cent dip in employment of contractual workers in the same period while remaining flat in the final quarter of 2008-09, the budget allocation for direct employment generation is palpably small. Though the enhanced allocation for NREGE is commendable, urban employment creation has not been given due attention. As per the latest employment-unemployment survey of NSS (62^nd round, 2005-06) educated unemployment rate in urban areas was as high as 16 per cent, the rate being much higher than that for those with educational level middle or below. Modernization of Employment Exchange in public private partnership is a welcome move in this direction, however, specific employment schemes linking education and employment (by putting higher emphasis on service sector having high human capital factor content) as an 'inclusive employment policy' has remained unfulfilled.

 

Innovative schemes such as implementation of social security schemes for leather and handicraft workers, construction labour, bidi workers and rickshaw pullers is a good gesture towards Occupational Inclusion in semi-urban and urban areas.

 

However, Education, a 'merit good', has been well taken care of in the budget. Full interest subsidy for economically weaker sections to access higher education from recoganised institutions in India and the extension of the income-tax deduction under Section 80E in respect of interest on loans taken for pursuing higher education to cover all fields of study including vocational studies, pursued after completion of schooling, are in the desired direction. Financial access for higher education should move in sync with access to the institutions of proven efficiency. Enhanced provision for new IITs and NITs and increase in overall plan budget for higher education are good steps.  

 

Economic and social inclusion is highly relative and area specific, generalization for the entire country doesn't make much sense. A recent World Bank study reveals large deviations between what people perceive as being poor (captured in 'community poverty lines') and what Government estimates by official poverty line, provisions under National Food Security Act seems not to be fully exhaustive in an 'inclusive' budget.  

Sahana Roy Chowdhury,
Economist,
Monetary Research Project, ICRA Ltd., Kolkata
and

former Research Fellow at Indian Statistical Institute, Kolkata