Business

How Many Jobs Does Budget 2018 Create?

NEWS WORLD INDIA | 0
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| February 2 , 2018 , 13:30 IST

India is home to over 18 million unemployed people. A recent World Bank report further claimed that over 30% of India's population aged between 15 and 29 years are not in education, employment or training (NEETs). All this makes jobs a major issue for the country’s development.

Even four years ago, recognising this problem, Narendra Modi had promised in his election campaign to create 10 million jobs annually. This electoral promise played a big role in getting him into the Prime Minister's Office in May 2014, but until October 2017 only about 823,000 jobs had been created in the country. How many jobs will India’s Budget 2018 now aspire to create?

Here are the key developments related to job creation in India’s Budget 2018:

1. The budget has a thrust on improving the rural economy. A large number of proposals for farmers have been offered to provide maximum livelihood opportunities in the rural areas in the coming fiscal year. "In the year 2018-19, for creation of livelihood and infrastructure in rural areas, total amount to be spent by the Ministries will be Rs14.34 lakh crore, including extra-budgetary and non-budgetary resources of Rs11.98 lakh crore. Apart from employment due to farming activities and self-employment, this expenditure will create employment of 321 crore person days," said India’s Finance Minister Arun Jaitley.

2. Fixed-term contract hiring has been extended beyond apparels to all sectors. This enables employers to hire workers for specific projects on contract basis, and terminate their services when projects are completed.

3. There is boost to the infrastructure industry, which is a major job creator. ”In order to create employment and aid growth, government's estimated budgetary and extra budgetary expenditure on infrastructure for 2018-19 is being increased to Rs 5.97 lakh crore against estimated expenditure of Rs 4.94 lakh crore in 2017-18,” Jaitley said.

4. Corporate tax rate has been lowered to 25% for companies with a reported turnover of up to Rs 250 crore in the financial year 2016-17. In last year's budget, this tax rate was for companies with a turnover of under Rs 50 crore. According to the finance minister, the development this year will benefit 99% of companies filing returns, leaving them with a higher investible surplus, which in turn will create more jobs.

5. The government will contribute 12% of the wages of the new employees in Employees’ Provident Fund for all sectors for next three years. Until now this was applicable to only a few sectors.

6. The Budget has proposed to amend the Employees’ Provident Fund Act to reduce women employees' contribution to 8% for first three years of their employment while the employer's contribution will continue at 12%. This will encourage more women to join the corporate workforce. 

7. The Finance Minister also announced that the government will set up skill centres in every district of the country under Pradhan Mantri Kaushal Kendra Programme.