Budget boost for jobs, skills and collateral-free loans

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By Deepak Razdan

The Union Budget for 2017-18 has shown the Government’s intent not only to create new work opportunities but to help the enterprising with limited means to set up their small ventures and stand up on their own.

Ninety lakh people are migrating every year in the country in search of work, the latest Economic Survey reveals. The districts which account for 40 per cent of India’s poorest receive only 29 per cent of total funding, says the Survey. The Indian growth story continues but not without flaws.

Accepting the challenges, the Budget has attempted to strengthen various existing schemes and announced fresh initiatives to help the poor, while indicating long-term policy directions. Focusing on rural India to eliminate poverty and to check distress migration, theMahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is being reoriented to achieve the goal of doubling farmers’ income. Promising 100 days yearly employment to every rural household, MGNREGS’ allocation has been raised from Rs 38,500 crores in 2016-17 to Rs 48,000 crores in 2017-18. There will be greater emphasis now on creating assets which improve farm productivity and incomes.

Another major scheme, the Pradhan Mantri Mudra Yojana, which seeks to fund the “unfunded and the underfunded,” last year far exceeded the target of Rs 1.22 lakh crores for loans. The President, Mr Pranab Mukherjee, in his Address to Parliament on 31st January this year, said over Rs 2 lakh crore were provided through 5.6 crores collateral-free loans under this Yojana and to promote small businesses. For 2017-18, the Budget has proposed to double this Scheme’s lending target of 2015-16 and set it at Rs 2.44 lakh crores. Priority will be given to Dalits, Tribals, Backward Classes, Minorities and Women, the Finance Minister, Mr Arun Jaitley, said.

The Stand Up India scheme was launched by the Government in April 2016 to support Dalit, Tribal and Women entrepreneurs to set up Greenfield enterprises and become job creators. Over 16,000 new enterprises have come up through this scheme in activities, as diverse as food processing, garments, diagnostic centres, etc. For promoting entrepreneurship, the National Scheduled Castes/Scheduled Tribes Hub has been launched with an allocation of Rs 490 crores.

Skill development, perceived as a major tool to prepare the Indian workforce for paying jobs, is being given a big boost. The Budget has proposed to increase the allocations for Deendayal Antyodaya Yojana- National Rural Livelihood Mission for promotion of skill development and livelihood opportunities for people in rural areas to Rs 4,500 crores in 2017-18. The allocation for Prime Minister’s Employment Generation Programme (PMEGP) and credit support schemes has been increased more than three times.

Rural areas where jobs disappear because of poor monsoons are being given priority in skill development. As part of imparting new skills to the people in these areas, mason training will be provided to five lakh persons by 2022, with an immediate target of training at least 20,000 persons by 2017- 18.

Sixty-five per cent of India’s population is below 35 years. With the motto of Har Haath ko Hunar the Government has taken several initiatives to skill the youth and improve their employability. The Pradhan Mantri Kaushal Kendras (PMKK), launched with an outlay of Rs 12,000 crore to train one crore youth over the next four years, have already been promoted in more than 60 districts. These will be now extended to more than 600 districts across the country.

One hundred India International Skills Centres will be established across the country. These Centres would offer advanced training and also courses in foreign languages. This will help youth seeking job opportunities outside the country.

During 2017-18, the Government will launch the Skill Acquisition and Knowledge Awareness for Livelihood Promotion programme (SANKALP) at a cost of Rs 4,000 crores. SANKALP will provide market relevant training to 3.5 crore youth, which has been felt necessary in the fast-changing economic scenario.

The next phase of Skill Strengthening for Industrial Value Enhancement (STRIVE) will also be launched in 2017-18 at a cost of Rs 2,200 crores. STRIVE will focus on improving the quality and market relevance of vocational training provided in ITIs and strengthen the apprenticeship programmes through industry cluster approach.

A special scheme for creating employment in the textile sector has already been launched. A package of Rs 6000 crores was announced to boost employment generation and exports. The package is expected to generate over 1.1 crore jobs, mostly for women. A similar scheme will
be implemented for the leather and footwear industries.

Tourism is a big employment generator and has a multiplier impact on the economy. Five Special Tourism Zones, anchored on SPVs, will be set up in partnership with the States. Incredible India 2.0 Campaign will be launched across the world.

Medium and Small Enterprises occupy bulk of economic activities and are also instrumental in providing maximum employment to people. However, since they do not get many tax exemptions, they end up paying more taxes as compared to large companies. As per data of financial year 2015-16, as many as 2.85 lakh companies making profit of less than Rs 1 crore pay effective tax rate of 30.26 per cent while 298 companies making profit above Rs 500 crores pay effective tax rate of 25.90 per cent.

To make MSME companies more viable and also to encourage firms to migrate to company format, the Budget proposed to reduce the income tax for smaller companies with annual turnover upto Rs 50 crore to 25 per cent. As per data of Assessment Year 2015-16, there are 6.94 lakh companies filing returns of which 6.67 lakh companies fall in this category and, therefore, percentage-wise 96 per cent of companies will get this benefit of lower taxation. This will make the MSME sector more competitive as compared to large companies.

The Budget allocation for the Ministry of Micro, Small and Medium Enterprises was Rs 3465 crore in 2016-17 and it rose to Rs 5463 crore in the revised estimates (RE) of the year. It is further raised to Rs 6482 crore during 2017-18, indicating the trend in giving encouragement to the sector. Similarly, the BE allocation for Employment Generation, Skill and Livelihood for 2016-17 was Rs 12,141 crores and it rose to Rs 14,870 crores in the RE for the year. It is being further raised to Rs 17,273 crores in the 2017-18 Budget.

The process of recruitment to Government jobs has been made simpler and transparent by dispensing with interviews for recruitments to over 34 lakh non-gazetted posts. The Government will further reduce the cumbersome procedures of recruitment for the citizens, especially those belonging to the poor and unprivileged sections, because of the multiplicity of agencies and examinations.

A system of single registration and two tier system of examination is proposed to be introduced. In the North-East, the Government has approved a BPO promotion scheme in the Digital India programme for creation of employment opportunities.

Sabka Saath Sabka Vikas begins with the girl child and women. Mahila Shakti Kendras will be set up at village level with an allocation of Rs 500 crores in 14 lakh ICDS Anganwadi Centres. This will provide one stop convergent support services for empowering rural women with opportunities for skill development, employment, digital literacy, health and nutrition.

Schemes for the welfare of Scheduled Castes, Scheduled Tribes and Minorities are given special attention in implementation. The allocation for the welfare of Scheduled Castes has been stepped up from Rs 38,833 crores in BE 2016-17 to Rs 52,393 crores in 2017-18, representing an increase of about 35 per cent. The allocation for Scheduled Tribes has been increased to Rs 31,920 crores and for Minority Affairs to Rs 4,195 crores.

The Government will introduce outcome based monitoring of expenditure in these sectors by the NITIAayog. The Government is implementing Nai Roshni for leadership development of minority women; Padho Pardesh provides interest subsidy on educational loans for overseas studies for students belonging to the minorities. For skill development and economic empowerment of minorities, Seekho Aur Kamao, Upgrading Skill and Training in Traditional Arts/Crafts for Development (USTTAD) and Nai Manzil, a scheme to provide education and skill training to the youth from the minority communities are in operation.

The Government target is ensure that the fruits of growth reach the farmers, the workers, the poor, the scheduled castes and scheduled tribes, women youth and other vulnerable sections of the society.

(Deepak Razdan is a senior journalist and presently Editorial Consultant with The Statesman, New Delhi. Views are his personal.)

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