Union Finance Minister Nirmala Sitharaman presenting the Union Budget 2024 in the Parliament.
Credit: PTI Photo
This budget was a good pivot to address social challenges in addition to boosting investment in the economy. One of the recurring requests to the finance minister has been about job creation and skilling, especially at a time when technology is changing the job landscape. Finance Minister Nirmala Sitharaman has responded to this need, dedicating a significant portion of her speech to outlining efforts aimed at employment generation. The three job schemes will boost opportunities for fresh graduates and manufacturing, while incentives to employers will ensure that job creation is addressed from both the demand side and supply side of the labour market.
The focus on skilling is noteworthy, especially where the focus is on quality and outcome-oriented. For instance, 1,000 industrial training institutes will be upgraded in the hub and spoke arrangements with outcome orientation. Also, course content is to be aligned as per skill needs, which will ensure that skills keep up with the fast-changing job profiles.
However, it wasn’t just about skilled jobs; there were also announcements about job creation for semi-skilled and unskilled workers. Promoting tourism has a significant positive impact on employment, particularly in semi-urban areas and other sectors, and this budget included several initiatives to boost tourism. The support for hotels, restaurants, and tour operators will create jobs for housekeepers, maintenance personnel, waiters, bartenders, drivers, and other support staff.
And not just labour; one of the nine budget priorities was also boosting total factor productivity, which encompasses land, capital, and entrepreneurship, with technology as an enabler of improving total factor productivity. Unclear land titles, disputes over property rights, and the lack of transparent land records have led to delays and conflicts in land acquisition for industrial and infrastructure projects. Land-related reforms and actions, both in rural and urban areas, specifically digitization of land records in urban areas and establishing IT-based systems for property record administration, updating, and tax administration, will go a long way in improving and reducing the cost of doing business in India.
That brings us to the other highlight of the budget, which is a push towards ease of doing business. The proposed reforms to improve law, justice, and corporate governance will provide a clear and predictable framework for businesses, encouraging investment and entrepreneurship. To make the Insolvency and Bankruptcy Code more effective, announcements were made to integrate technology systems for the IBC for better outcomes and to establish additional tribunals. These will ensure a better investment climate and foster better collaboration and innovation. Boosting total factor productivity, which encompasses land, capital, and entrepreneurship, with technology as an enabler of improving total factor productivity will aid in improving overall competitiveness and attract more private investments into the overall
capex landscape.
India needs capital for investment, and foreign capital can play an important role in boosting private capital expenditure in green and brownfield investments. However, Foreign Direct Investment flows have been declining worldwide, and India bore the brunt of global liquidity tightening and uncertainties as capital flows fell by $0.5 billion from last year’s flows to $70.9 billion in FY24. While several measures have been announced to improve the ease of doing business and reduce the fiscal deficit to boost investors’ confidence, simplified rules and regulations for FDI and overseas investment, which have been an ask for a long time, will surely boost capital inflows into the country. The abolition of the angel tax in all forms is another good measure to encourage flows into startups. Promoting the Indian rupee for overseas investment will help boost demand for local currency and support the INR value as well.
Finally, we found the Budget to be well-balanced in terms of allocation for promoting regional development. The Purvodaya initiative—focused on the comprehensive development of the eastern region—addresses crucial needs in human resource development, infrastructure, and economic opportunities. Be it supporting the development of an industrial node in Gaya to boost the industrial sector, establishing over 100 branches of India Post Payment Bank to expand banking services, and provisioning INR 2.66 lakh crore for rural development, including infrastructure in the North East region, these measures ensure that India’s growth is more equitable and well-balanced.
(The writer is an economist)
Union Budget 2024 LIVE | Making a record for any Finance Minister, Nirmala Sitharaman presented her 7th consecutive Union Budget on July 23, 2024 under the Modi 3.0 government. This Budget brought tax relief for the middle class, while focusing on jobs through skilling, incentivising employers. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.