Editorial     

Published: July 31, 2024
Updated: July 31, 2024

Budget robs ‘Peter’ to pay ‘Paul’

The Union budget for fiscal 2025, presented by Finance Minister Nirmala Sitharaman last week, is a blatant exercise in extracting funds from shareholders who sell their short-term or long-term holdings, and from the masses who pay GST on almost each and every item they use, and handing over the amount to two ‘worthies’ — Chandrababu Naidu of Andhra Pradesh and Nitish Kumar of Bihar — who come forward to support Narendra Modi to become the Prime Minister even though his party could not get a majority of seats in the Lok Sabha. This quid pro quo deal has literally killed the spirit of federalism as the budget has favoured only two states while totally ignoring the other 26 states. It is not an exaggeration if some describe it as a ‘Kursi Bachao’ budget. In fact, this is an unhealthy, immoral and antinational deal which will remain in the history of Indian democracy as a black spot forever

A government budget is essentially a fiscal exercise to project expenditure and income for a fiscal year, to meet the pressing needs of the plans of the country, and for other widespread national issues. The ruling party Bharatiya Janata Party had been badly mauled in the recent general elections on account of massive unemployment, rising inflation, stagnant wages and farmers’ growing grievances. But instead of learning a lesson from these developments, the budget has not done anything concrete to solve these issues. Today, millions of young people are in desperate search of jobs. Whether the government admits it or not, the curse of unemployment is rampant in the country.

According to CMIE, the allIndia unemployment rate has shot up to 9.2 per cent in June 2024 and among graduates it is around 40 per cent. No doubt, the budget contains some gimmicks to solve the unemployment problem of the youth by introducing apprenticeship programmes for youth aged 20-30 with the top 500 companies in India. This plan requires each company to take on 20,000 interns with a stipend of Rs. 5,000 per month funded through their CSR contributions. However, this initiative fails to address the core issue of creating substantial job opportunities or fostering entrepreneurial ventures for highly skilled youth — particularly in light of the record 9.2 per cent unemployment rate.

This so-called ‘corporate Agni Veer’ programme does little to tackle the real issue of unemployment. Instead, it seems to trivialise the challenges faced by the youth by focusing on providing internships rather than creating substantial job opportunities. It is more a gesture than a solution, leaving the pressing issue of high unemployment largely unaddressed.

In reality, the government had denied the existence of unemployment for the last 10 years. Finally, it has been now forced to admit its existence. But the difficulty is that having ignored it so far, the government is unprepared and has no clue abput how to deal with it — the budget speech had to resort to summarising its goals using ten different phrases to generate the acronym ‘EMPLOYMENT’, but it had relatively little in terms of real content.

Micro, small and medium-sized enterprises (MSMEs) provide the bulk of employment but they have been shattered during the last decade through a disastrious demonetisation (2016) and a botched GST rollout (2017), followed by the Covid-19 pandemic (2019-20). The government did not take any imaginative and effective steps to save this sector and thousands of them were forced to roll down shutters.

In this budget, the government has cut down spending on social sectors. Such a step amounts to a huge missed opportunity, because these are precisely the sectors that could actually contribute to increasing employment.

It is clear enough that while preparing the budget, the government was primarily engaged in saving the Prime Minister’s chair. And the ‘final solution’ it found was in ‘robbing Peter (read, the aam aadmi) to pay Paul (read, its allies)’!