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'They think quick fixes like internship in the private sector will help.'
'In fact, internships have been going on for the last one decade.'
'In 2014-2015 itself, we had a ministry of skill development. None of the programmes have yielded results, still they are continuing with such schemes under some other name.'
'We don't see any seriousness on the part of the government to attack the problem of unemployment.'
Announcements were aplenty in the 2024 Budget presented by the newly elected NDA government.
It also gave the impression that it was presented by a coalition government, and that the finance minister had to please some of its partners on whose mercy the government survives. No wonder the Opposition termed it as a Sarkar bachao Budget.
How do economists view the Budget? Will the announcements solve the problems the economy faces?
"This is not the Budget of a new government with a mandate for five years. It has no vision," Professor R Nagaraj, Distinguished Senior Fellow at IIT Bombay, tells Rediff.com's Shobha Warrier.
Many people describe this Budget as old wine in new bottle with lots of announcements but without any concrete direction to implement them. Do you agree?
I think there is merit in such a view.
Yes, there are a lot of announcements but the substance in them is very limited.
The announcements are for specific schemes and the Budget gives large sums of money to their coalition partners on whom the present government survives.
We all know that Budgets always tend to be a political statement. This time it is more so than the earlier Budgets.
It is true that Andhra requires a capital but the way which the Budget went about giving large amount of money to these two states is very discretionary.
Many states say that this is an Andhra-Bihar Budget...
It looks like that. The finance minister said Bihar suffered from floods. Yes, Bihar suffers from floods regularly. So are many other states.
Bihar has always been getting extra funds from the finance commissions for its backwardness.
But Bihar's record of utilising the money has been very poor.
It is a fact that Bihar has very poor state capacity in efficiently using large sums of money.
It is not that there is lack of resources for Bihar but the state's ability to use the resources efficiently is very poor.
So, we know what will happen when you just give large sums of money to the state. It is frittering away fiscal resources.
Recently, we saw at least eight bridges collapsing one by one in the span of a month in Bihar. It clearly shows there is no accountability.
The biggest problem India faces today is unemployment though the government claims it has created crores of jobs. Do you see anything in the Budget to create employment?
Unfortunately, no. The government says that they will create employable youth through a couple of programmes.
One is internship in private companies. The other is the government paying the first instalment of employee's provident fund.
These are short term measures proven to be ineffective.
This is not the first time they are announcing such short-term measures.
Since 2014, there have been such efforts, but nothing has worked.
The proportion of formal sector employment, as defined by EPFO, has not gone up which says the earlier schemes have not been successful. Therefore, we can say those were just short-term measures.
They manipulate these the numbers so that they show there are false short-term gains but it has not provided any long-term gains.
Since the amount set aside for employment generation is substantial, they should start something on the lines of MNREGA for the urban economy, an urban employment scheme.
The urban infrastructure is in a bad shape, particularly the sewage, drainage, footpaths, etc.
If you can create employment in these areas, it will have an impact on urban unemployment. Many of us have written about it.
If you start an urban employment scheme, it will be far more effective, but the government doesn't want to take responsibility on this.
Instead, they are trying to get work done through the private sector which will result in the misuse of funds.
More than that, they had similar schemes in 2014 also but they have not been able to create sustainable job opportunities. They were not successful.
Do you feel the Budget has not given anything substantial for the unorganised sector which employs the maximum number of people, but not yet recovered from the shocks of demonetisation and GST?
Absolutely. The 2022-2023 data of the annual survey of unorganised enterprises came out recently.
When you compare the data with that of 2015-2016, it clearly shows there is a fall in employment.
It shows we had three shocks during this period: Demonetisation, GST and then the pandemic, and they all have contributed to a huge fall in employment in the unorganised sector.
I was hoping the finance minister would take cognisance of this data and come with some concrete measures.
After all, it is their own data. But there is very little in the Budget to help the unorganised sector.
They think quick fixes like internship in the private sector will help. In fact, internships have been going on for the last one decade.
In 2014-2015 itself, we had a ministry of skill development under the ministry of finance, and they had huge programmes under PPP mode.
None of the programmes have yielded results, still they are continuing with such frugal schemes under some other name.
We don't see any seriousness on the part of the government to attack the problem of unemployment which the Opposition has been raising for some time.
I think they are still to grapple with the severity of a problem like unemployment.
They think that the welfare schemes they have implemented have led to genuine improvement in the condition of the poor and the unemployed. So, they refuse to see the reality.
The election results are a clear reflection of the gravity of the unemployment situation in India, especially in the northern states.
I think the government is yet to come to terms with this economic reality.
Look at the Economic Survey. It gives a gung-ho picture of the economy which is a complete dishonest account. The survey is completely out of touch with the ground reality.
Prime Minister Modi said the Budget would empower the newly emerged neo-middle class....
He has to say something to support the Budget.
The reality is the budget seems so hollow. This is not the budget of a new government with a mandate for five years. It has no vision.
How do you rate the Budget?
I will not rate it high as the Budget has no vision. No perspective also.
It has some quick fixes which will give you only short-term gains.
It is reduced to a short-term, narrow political Budget taking care of two partner states -- Andhra and Bihar.
It is clearly very disproportionate and blatantly partisan in its outlook.
Feature Presentation: Rajesh Alva/Rediff.com