Budget 2022: Job creation rests on capex boost, PLI, infra push

Amid the bleak employment scenario, finance minister Nirmala Sitharaman said that the Budget incorporates measures like fillip to capital expenditure, production-linked incentives (PLI) and focus on infrastructure development to help create jobs in the country.

On a question regarding steps taken in Union Budget 2022-23 to aid job creation, the finance minister listed initiated likely to assist the government on this front. “We have allocated ₹7.5 lakh crore on infrastructure which is around 34% higher than last year. This will have a positive impact on job creation immediately. The expenses on asset creation will definitely create jobs. Apart from that, we are giving PLI in 14 sectors, meaning incentives for every new production unit. This is being done to ensure that jobs are created with the increase in manufacturing.”

The central government expects the PLI scheme to create 60 lakh more jobs.

“We are providing ₹60,000 crore with sovereign guarantee to the hospitality sector. An independent study shows that the ECLGS for MSMEs given last year has helped them to retain their workers during pandemic. These benefits are being extended while keeping jobs in focus,” she further added.

In response to a separate question on the issue of employment, finance secretary T.V. Somanathan said the huge increase in capital expenditure will have a very high employment effect. “There is an additional ₹2 lakh crore of lending to MSMEs which is outside the ECLGS. ECLGS has been expanded for hospitality and related sectors.

“The outlay on Pradhan Mantri Gram Sadak Yojana is up by 27%. In addition to that a provision is being made in the capital expenditure support to state governments, if they have identified certain priority projects in PM Gram Sadak Yojana, we will even take the 40% state share on those components so that the states have no burden in carrying out these works,” he further added

Somanathan also mentioned that Prime Minister’s Development Initiatives for North East (PM DevINE), which will be a gap-filling scheme. Projects that do not fit in any existing scheme can be posted under this fund by north eastern states to get 100% funding. The resultant infrastructure boost, along with works in other sectors, is expected to help create jobs.

It has been one of the longstanding commitment of the Narendra Modi-led government to create 2 crore jobs, which helped it to come to power in 2014. The results have been dire at best, despite repeated efforts in the form of Make in India, Start-up India, and more, and now Atmanirbhar Bharat and PLI scheme. The pandemic only exacerbated the already dire situation on job front.

According to data from Centre for Monitoring Indian Economy (CMIE) data, 9.5 million salaried jobs were lost during December 2021, while another 1 million entrepreneurs lost their livelihoods. Industry-wise observation shows that the manufacturing sector lost 9.8 million jobs, whereas around 5 million jobs were lost in the hotels and tourism industry. The education sector saw another 4 million job losses. The overall services sector reported a net decline of 1.8 million on the jobs front. The losses were offset by 7.8 million employment opportunities created in the retail trade segment.