As the interim Budget is round the corner, it is essential to consider one of the most important elements — the employment scenario.

The latest Periodic Labour Force Survey (PLFS) for 2022-23, released by the National Sample Survey Office a few months ago, offers some good news. It notes that unemployment in India has decreased from 5.3 per cent in rural regions in 2017-18 to 2.4 per cent in 2022-23. In urban zones, this has dipped from 7.7 per cent to 5.4 per cent during the same period.

Rising youth employment is another silver lining, propelled primarily by States in northern and central India. Significantly, youth employment has kept rising alongside the youth populace. The PLFS reveals that youth (those between 15 and 29 years) unemployment rate has dropped to 10 per cent in 2022-23 from 17.8 per cent in 2017-18. Simultaneously, the labour force participation rate of the youth has jumped from 38.2 per cent to 44.5 per cent during the same period. For a nation of more than 1.4 billion people, it is indeed a laudable feat.

Meanwhile, the Central Government’s ongoing pattern of progressive policies must be maintained in this Budget to promote employment generation. In this context, the role of MSMEs cannot be overlooked . Information from the Ministry of Micro, Small and Medium Enterprises shows the nation has around 63 million MSMEs that collectively employ more than 113 million, comprising around 40 per cent of India’s workforce. Additionally, the segment contributes to about 30 per cent of the GDP and 45 per cent of the country’s manufacturing output.

Policy interventions

Therefore, targeted policy interventions are required to support the segment and boost employment numbers. Keeping this objective in mind, the Centre could focus on measures to support micro-entrepreneurship and self-employment. Micro-entrepreneurship (small-scale business ownership) creates a cohort of entrepreneurs who then generate employment opportunities for others, leading to a ripple effect. This is crucial in promoting grassroots economic growth and development via local employment opportunities. Moreover, micro-entrepreneurship creates a roadmap for financial independence and self-sufficiency for individuals and their families.

Coming back to the PLFS, the unemployment numbers have fallen for both men and women, indicating that women are also getting more jobs as the economy expands. The unemployment rate for men decreased to 3.3 per cent in 2022-23 from 6.1 per cent in 2017-18. The corresponding unemployment figures for women were 2.9 per cent (2022-23) and 5.6 per cent (2017-18), indicative of the rise in female employment.

With India already overtaking China as the most populous nation in the world, the Budget has its task cut out when it comes to employment generation. Accordingly, it is imperative to support start-ups too. Although India has a dynamic start-up ecosystem, the upcoming Budget can lay the groundwork for a conducive policy environment that specifically benefits micro-entrepreneurs.

The country’s demographic dividend is well-known worldwide. To take full advantage of this vis-à-vis the expanding workforce, measures for skilling and upskilling should be accelerated. Initiatives that meet the needs of Industry 4.0 must be emphasised since this is the best way to ensure the workforce is future-ready. The interim Budget presents a chance to set the ball rolling.

The writer is Founder and CEO, apna.co

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