A Low Growth, No Employment and No Hope Budget for ‘Aspirational India’

The Union Budget of 2020 is conspicuous by its non-recognition of the ongoing and widely discussed slowdown of the economy, let alone its impact on the different sections of the people. Given the negative growth in employment and consumption in the rural economy, the budget seems like a cruel joke on the plight of the poor, in general, and women, in particular. Instead of measures for boosting the aggregate demand, especially in the rural economy, the government has exhibited a track record of aiding the process of wealth creation for corporate capital and throwing a few crumbs to the middle class. What comes out crudely and sharply is the ideological predilections of the regime in power.

The timing for the presentation of the union budget for India’s Finance Minister Nirmala Sitharaman was not an enviable one by any stretch of imagination. Not being a party to the high level pre-budget discussions chaired by the Prime Minister must have added to her understandable but hardly revealed anxiety. There has been an ongoing discussion and debate on the slowdown of India’s economy that got compounded by serious doubts raised on the methodology of computation of the national income and, consequently, its growth rate.

Then, there was the news about a decline in absolute levels of employment in the economy by 6.2 million between 2011–12 and 2017–18 (Kannan and Raveendran 2019). This report of the National Sample Survey Office (NSSO) was first withheld and then released after the general elections of May 2019. We do not know the current situation from official statistics, although the report of the second PLFS 2018–19, since it is an annual survey, should have been ready and released by now. This decline in employment is perhaps the first since independence and certainly since 1972–73 that marked the beginning of the quinquennial (or thereabout) surveys on employment and unemployment undertaken by the NSSO, whose professional integrity has so far stood in great stead both nationally and internationally. The net decline in employment was wholly borne by less educated women in rural areas. If one takes a look at the dualistic nature of the economy, the loss in the informal sector was 16.9 million along with a gain in the formal sector to the extent of 10.7 million.¹ When one takes a locational view, the rural economy lost 21 million jobs while the urban economy gained 14.8 million. This, in my view, is an indirect confirmation of the devastating impact of demonetisation on the informal sector, possibly reinforced by the flawed implementation of the goods and services tax.