Budget 2023-24: Growth is fine but where will the jobs come from… Former RBI governor Subbarao raging on the budget – former rbi governor subbarao says not sufficient emphasis on jobs in budget
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Subbarao said, ‘I was disappointed that there was not enough emphasis on jobs in the budget. Only growth will not work, we need employment based growth. The former RBI governor was asked what was his biggest disappointment with the budget. According to Subbarao, about one million people join the labor force every month and India is unable to create even half of its jobs. Due to this the problem of unemployment is not only increasing but is becoming a crisis. He said that there is no single or simple solution to a big and complex problem like unemployment.
How to get the benefit of demographic dividend
But I am disappointed that the budget failed to deal with the problem, the former RBI governor said. It was only believed that employment would be generated through growth. Subbarao said that India will be able to reap the benefits of demographic dividend only when we are able to find productive employment for the growing labor force. The biggest takeaway from the budget is the government’s emphasis on growth and commitment to fiscal responsibility, while the general perception before the budget was that the finance minister would present a populist budget in an election year.
Asked whether there are risks to the projections given in the budget document, he said, there are risks on both the revenue and expenditure sides. The estimates on the revenue side are based on the assumption that GDP at current prices will grow at 10.5 per cent and that the growth in tax collections this year will continue into next year. Both the assumptions seem optimistic, he said, as growth and inflation are likely to soften next year. On the expenditure side, Subbarao said if the global situation turns adverse and global prices rise, the expected savings in food and fertilizer subsidies may not materialise. He said that apart from this, if the rural growth does not happen rapidly, then the demand for MNREGA will not decrease as per the budget estimates.
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Government hopes to increase jobs
Meanwhile, the Finance Ministry said on Thursday that growth in capital expenditure in the budget, announcement of measures to promote green economy and strengthening the financial market is expected to accelerate economic growth with increasing jobs. In its monthly economic review, the ministry said key data (exports, GST collections, PMI etc) for the October-December quarter of the current financial year generally indicate a slowdown. One reason for this is the tightening of monetary policy, which has started showing an adverse effect on global demand. The IMF and the World Bank have predicted India to remain the fastest growing economy in 2023, despite fears of a slowdown in global output.
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